News Brief No. 01/69

ATTACHMENT
REVIEW OF THE PRGF: TERMS OF REFERENCE

In December 1999, the Fund Board called for a review of the Poverty Reduction and Growth Facility (PRGF) with external participation, including contributions from member countries, international institutions, other aid providers, and civil society.¹ At that time, it was expected that most or all PRGF users would have prepared at least one full PRSP by end-2001. In the event, only five full PRSPs have been presented for Board consideration to date and an additional 10-15 full PRSPs are expected to be presented by the end of the calendar year. With a view to ensuring that the review can reflect the experience of a sufficiently large number of PRGFs based on first full PRSPs, the staff proposes that the review be completed prior to the 2002 Spring Meetings in parallel with the Review of the PRSP Approach. This revised timetable would also allow both reviews to benefit from various studies and evaluations of the PRSP approach and of the PRGF which will be completed by external partners and stakeholders by the end of the year.

Output

Focus

The review of PRGF implementation will focus on the degree to which the "key features" or main principles underlying the facility have been manifested in new three-year arrangements and new annual programs under ongoing arrangements (see "Key Features of PRGF-Supported Programs"). Specifically, attention will focus on the degree to which PRGF-supported programs are embedded within countries' overall strategy for growth and poverty reduction; reflect greater ownership and broader participation in their design; support budgets that are more pro-poor and pro-growth; set fiscal targets that are appropriately flexible; place increased emphasis on improving public resource management and accountability; take into account the social impact of major macroeconomic adjustments and structural reforms in program design and contain structural conditionality that is more selective. In this regard, the review will discuss how conditionality and program design was modified in the transition from the ESAF to the PRGF and assess the lessons learned. The review will also assess performance under PRGF-supported programs with respect to program targets.

Inputs

There will be five main inputs into the PRGF Review. First, the review will incorporate the inputs to, and output from, the PRSP review as they pertain to the PRGF (see the accompanying joint Staff Note on the Proposed Review of the PRSP Approach). Second, contributions from participating countries, development partners and stakeholders regarding their views of, and experience with, PRGF implementation will be solicited through the Fund's external web site and possibly through more targeted questionnaires. Third, PRGF country views will be solicited in the context of regional and country-specific PRSP learning events, to which the majority of PRGF countries would have participated. Fourth, a half-day workshop focusing on the PRGF will be held in conjunction with the PRSP conference. Finally, as regards analyses carried out by the Fund, the staff will examine the extent to which the "key features" have been reflected in new three-year arrangements and new annual programs under existing arrangements.

¹ Also the Bank and Fund Boards requested in December 1999 a review of the Poverty Reduction Strategy Paper (PRSP) approach to be carried out by the end of 2001 with external participation. As described in a separate note to the IMF Board, this would be done in parallel with the review of the PRGF.