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Andrew Sumner is in the Faculty of Arts and Human Sciences, London South Bank University, 103 Borough
Road, London SE1 0AA, UK. Email: sumnerap@lsbu.ac.uk.
and ‘no fundamental departure from the kind of policy advice provided
under earlier structural adjustment programmes’.3 Others see this as a period
of self-reflection and reconsolidation: ‘after half a century of development
effort, there is now widespread interest in assessing the development record—
what has gone right and what has gone wrong’ and ‘the last few years have
been marked by a critical re-evaluation and consolidation of previous
concepts and techniques as opposed to the formulation of brand new ideas
per se’.4
So, who is right? Do PRSPs represent a major shift to any number of ‘post-
Washington Consensus(es)’? Much research on PRSPs has focused on the
process itself and extent of participation or local ‘ownership’.5 In contrast,
the outcome of that process—the content of PRSPs—has received relatively
limited attention.6 This is especially so at cross-country level. This article is
an exploratory piece. Taking the content of 50 PRSPs the following questions
are posed: Has the PRSP process opened space for something new, Stiglitz’s
post-Washington Consensus, or for the reproduction of the former
Washington Consensus?
The post-Washington Low income societies Quality institutions; Economic growth and
Consensus characterised by poor regulatory structures; multidimensional
(cf Stiglitz) institutions and weak macroeconomic poverty reduction,
governance stability; strong sustainability, equity
financial system; and democracy
privatisation with
competition; human
capital formation;
property rights;
cautious integration;
social safety nets;
technology policy
The New York Low equilibrium Growth; trade openness; Attaining the MDGs
Consensus or poverty trap for low aid; prioritising public
Millennium income countries; expenditure; good
‘Meta-Narrative’ inequality and ‘governance’.
(cf Maxwell; UNMP) poverty ‘pockets’ in
middle income
developing countries.
Both the result of
‘governance’ failures
The Latent Southern Agrarian, low income Strategic integration; fiscal Structural change and
Consensus (cf Gore) societies discipline; full capital social transformation
and human
employment; human
capital formation; state
facilitation of private
sector-led development;
agrarian reform;
regional co-operation.
the WC has been replaced by a new and improved orthodoxy, called here the
‘meta-narrative’. It emphasises the Millennium Development Goals (MDGs) as
an over-arching framework, and lays out the link between the MDGs, nationally
owned poverty reduction strategies, macro-economic policy (including trade),
effective public expenditure management, and harmonised aid in support of
good governance and good policies.21
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Policy not mentioned in PRSP or All PRSPs (%) HIPCs(%) Non-HIPCs (%) African HIPCs (%)
non-orthodox policy in PRSP N ¼ 50 N ¼ 28 N ¼ 22 N ¼ 22
Benin Y 62
Burkina Faso Y (PRSP I and II) 68
Cameroon Y 72
Chad Y –
Ethiopia Y 94
Gambia Y 15
Ghana Y 31
Guinea Y 73
Madagascar Y 67
Malawi Y 56
Mali Y 8
Mauritania Y 80
Mozambique Y 61
Niger Y 82
Rwanda Y 97
Senegal Y 77
Sierra Leone Y 69
Tanzania N 47
Uganda Y (PRSP I and II) 21
Zambia Y 10
(SOEs) not privatised as of 2001 when data was collated by Nellis.31 The
preponderance of large state assets might explain the role of privatisation in
PRSPs in the sample, although recent research has suggested that even the
privatisation – growth link in developing countries is weak.32
In the case of the ‘missing components’—trade liberalisation, capital
account liberalisation and FDI liberalisation—proxies can be identified for
the two former (see Table 5) but there is no satisfactory policy proxy, to the
author’s knowledge, for FDI policy. Although UNCTAD does calculate policies
‘more or less favourable’ to FDI in the annual World Investment Report, this is
not a measure of the overall openness of a country to FDI and UNCTAD does
not make the data publicly available at country level. FDI flows/annual
investment or FDI stock/GDP could also be used but neither of these says
anything about the extent of liberalisation of policy. In the case of trade
liberalisation average trade tariff data are available for the countries in the
sample and show that most of the HIPCs do already have low trade tariffs,
though not as low as the World Bank’s ‘Country Policy and Institutional
Assessment’ benchmark of less than 10% average trade tariff, which
constitutes ‘good’ policy.33 That said, India’s average trade tariff of 33% is
more than double many HIPCs’ average tariff rates.
In terms of capital account liberalisation, again, consistent and available
data are problematic, demonstrating the nature of financial transactions in
the host economies. One proxy is an index of restrictions on capital
transactions with foreigners presented in the annual Economic Freedom of the
World report.34 These are on a scale of zero to 10. Zero equals totally
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An Augustinian conclusion?
From this rather crude, preliminary exploration, one might hypothesise for
further investigation the following, which is consistent with the data
available: the lack of trade liberalisation in the African HIPC PRSPs is at
least partly a function of the extent of existing liberalisation, while the
absence of capital account liberalisation is not. One might speculate that the
shift on capital account liberalisation is more to do with the prevailing
notions, even accepted by the IMF, that capital account liberalisation carries
significant risks. In short, the current policy paradigm seems to be something
closer to Stiglitz and Maxwell than to Gore. However, in the HIPCs FDI
deregulation, trade and capital account liberalisation seem to be out of
favour. Whether we are already in a messy, fragmented paradigm shift is an
open question. It does not look like Kuhn’s ‘pre-scientific’ phase, because
there is some kind of consensus, albeit fragmented. On the other hand, it does
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not look like ‘normal science’, because there is not full consensus. Perhaps
this is Kuhn’s third stage or an ‘in-limbo’, transition period, as Thorbecke
and Meier argue. Perraton perhaps sums it up best when calling it an
‘Augustinian approach’—a change in the speed, not the direction. At least for
the moment.
Notes
1 Group of 8, Final Communiqué, Gleneagles, June 2005, p 2; and International Monetary Fund,
‘Poverty Reduction Strategy Papers (PRSP): A Fact Sheet’, Washington, DC: IMF, 2005, p 1.
2 Wolfensohn, cited in S Maxwell, The Washington Consensus is Dead! Long Live the Meta-Narrative!,
Overseas Development Institute (ODI) Working Paper 243, London, 2005, p 1.
3 D Craig & D Porter, ‘Poverty Reduction Strategy Papers: a new convergence’, World Development, 31,
2003, p 54; F Stewart & M Wang, Do PRSPs Empower Poor People and Disempower the World Bank, Or
is it the Other Way Round?, Queen Elizabeth House Working Paper, Oxford University, 2003, pp 19 –
21.
4 G Meier, Biography of a Subject: An Evolution of Development Economics, Oxford: Oxford University
Press, 2005, p vii; E Thorbecke, ‘The evolution of the development doctrine 1950 – 2005’, paper
presented at the conference on ‘The Future of Development Economics’, United Nations University,
Helsinki, 17 – 18 June 2005, p 34.
5 See, for example, case studies in D Booth (ed), Fighting Poverty in Africa: Are PRSPs Making a
Difference? London: Overseas Development Institute, 2003.
6 R Gottschalk, ‘The macro content of PRSPs: assessing the need for a more flexible macroeconomic
policy framework’, Development Policy Review, 23 (4), 2005, p 420. One notable exception is Stewart
and Wang’s content analysis of 30 PRSPs. Stewart & Wang, Do PRSPs Empower Poor People?
7 There is the judicative—rules, norms, what is included/excluded—which determines the rules of the
discourse, and the veridicative—what is regarded as true and what is dismissed as false—which
legitimises the rules of the discourse.
8 T Kuhn, The Structure of Scientific Revolutions, Chicago, IL: University of Chicago, 1962, p 175.
9 M Masterman, ‘The nature of paradigms,’ in I Lakatos & A Musgrave (eds), Criticism and the Growth
of Knowledge, New York: Cambridge University Press, 1970.
10 T Kuhn, ‘Reflections on my critics’, in Lakatos & Musgrave, Criticism and the Growth of Knowledge;
and Kuhn, ‘Second thoughts on paradigms’, in F Suppe (ed), The Structure of Scientific Theories,
Urbana, IL: University of Illinois Press, 1972.
11 B Sutcliffe, ‘The place of development theories in theories of imperialism and globalisation’, in
R Munck & D O’Hearn (eds), Critical Development Theory: Contributions to a New Paradigm,
London: Zed Books, 1999.
12 Kuhn, The Structure of Scientific Revolutions, pp 23, 103.
13 J Williamson, ‘Democracy and the Washington Consensus’, World Development, 21 (8), 1993, p 1329.
14 M Naim, ‘Washington Consensus or Washington confusion?’, Foreign Policy, Spring, 2000, p 88.
15 M Beeson & I Islam, ‘Neo-liberalism and East Asia: resisting the Washington Consensus’, Journal of
Development Studies, 41 (2), 2005, p 202; J Williamson, ‘What Washington means by policy reform’,
in Williamson (ed), Latin American Adjustment: How Much Has Happened?, Washington, DC:
Institute for International Economics, 1990; and Williamson, The Political Economy of Reform,
Washington, DC: Institute for International Economics, 1994.
16 R Kanbur, ‘The strange case of the Washington Consensus: a brief note on John Williamson’s ‘‘What
should the Bank think about the Washington Consensus?’’’, mimeo, Cornell University, 1999; and
J Stiglitz, ‘The post Washington Consensus, initiative for policy dialogue’, mimeo, Columbia
University, 2004.
17 J Stiglitz, ‘More instruments and broader goals: moving towards the post-Washington Consensus’,
United Nations University, Annual Lecture, Helsinki, 7 January 1998; and Stiglitz, ‘Towards a new
paradigm for development: strategies, policies and processes’, Prebisch Lecture at UNCTAD, Geneva, 19
October 1998.
18 P Perraton, ‘Review article: Joseph Stiglitz’s globalisation and its discontents’, Journal of International
Development, 16 (6), 2005, pp 897 – 906.
19 These were corporate governance; anti-corruption; flexible labour markets; WTO agreements; financial
codes and standards; ‘prudent’ capital account liberalisation; non-intermediate exchange rate regimes;
an independent central bank and inflation targeting; social safety nets; and targeted poverty reduction.
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See D Rodrik, ‘After neoliberalism, what?’, paper presented at the conferences on ‘Alternatives to
Neoliberalism’, Washington, DC, 23 May 2002, p 1.
20 Beeson & Islam, ‘Neo-liberalism and East Asia’, p 1999.
21 Maxwell, The Washington Consensus is Dead!, pp 1 – 2.
22 C Gore, ‘The rise and fall of the Washington Consensus as paradigm for developing countries’, World
Development, 28 (5), 2000, p 791.
23 J Williamson, ‘What should the World Bank think about the Washington Consensus?, World Bank
Research Observer, 15 (2), 2000, pp 251, 262; and Stiglitz, ‘The post Washington Consensus, initiative
for policy dialogue’, Mimeo, Columbia University, 2004, p 1.
24 This was based on the World Development Report 2000/1 consultations, which Kanbur led until his
resignation following US Treasury attempts to censor the final text after what had been a highly
participatory process. See R Kanbur, ‘Economic policy, distribution and poverty: the nature of
disagreements’, World Development, 29 (6), 2001, pp 1083 – 1094.
25 Ibid, p. 1085.
26 See, for example, Oxfam, From ‘Donorship’ to Ownership? Moving Towards PRSP Round Two, Oxford:
Oxfam, 2004; and United Nations Conference on Trade and Development (UNCTAD), The World
Bank’s PRSP Approach: Good Marketing or Good Policy?, Geneva: UNCTAD, 2002.
27 The Economist, 2005, p 12, available at http://www.economist.com. Additionally, in October 2005 the
IMF board approved the establishment of a ‘Policy Support Instrument’. This is a non-lending
programme to provide advice and to signal to donors and markets about a country’s economic policies.
As such it could form a de facto ‘judgement’ under the IMF’s article 4 consultations. As mentioned in
the text, the World Bank’s IDA provides ‘score-cards’ for countries under its ‘Country Policy and
Institutional Assessment’.
28 Given that one of the PRSP declared guiding principles is ‘comprehensiveness’, this would seem to be a
valid form of assessment. Of course, as with all policy analysis, an issue is the nature and extent of
implementation of policy. Since writing a further two countries have full PRSPs rather than interim
PRSPs (Bangladesh and Nigeria) and Nicaragua has a second PRSP. Data presented here have been
processed from T Jones & P Hardstaff, One Size for All: A Study of IMF and WB PRSPs, London: World
Development Movement, 2005. For a list of policies in each PRSP, see T Jones & P Hardstaff, Economic
Policies in Poverty Reduction Strategy Papers, London: World Development Movement, 2005. Jones
and Hardstaff emphasise what is in the PRSPs rather than what is missing, arguing strongly that the
policies of the Washington Consensus are intact.
29 For sceptics’ research on trade liberalisation, see P Agénor, Does Globalization Hurt the Poor?
Washington, DC: World Bank, 2002; T Hertel, M Ivanic, P Preckel & J Cranfield, ‘Trade liberalisation
and the structure of poverty in developing countries’, paper prepared for the conference on
‘Globalisation, Agricultural Development and Rural Livelihoods’, Cornell University, 11 – 12 April
2003; and M Lundberg & L Squire, ‘The simultaneous evolution of growth and inequality’, Economic
Journal, 113 (487), 2003, pp 326 – 344. For sceptics’ research on capital account liberalisation, see C
Arteta, B Eichengreen & C Wyplosz, ‘On the growth effects of capital account liberalisation’, mimeo,
University of California, 2001; M Klein, Capital Account Openness and the Varieties Of Growth
Experience, National Bureau of Economic Research (NBER) Working Paper 9500, 2003; and D Rodrik,
‘Who needs capital-account convertibility?’ in S Fischer (ed), Should the IMF Pursue Capital Account
Convertibility?, Princeton, NJ: University of Princeton, 1998.
30 T Jones & P Hardstaff, One Size for All: A Study of IMF and World Bank PRSPs, London: World
Development Movement, 2005, p. 16.
31 J Nellis, Privatization in Africa: What has Happened? What is to be Done?, Washington, DC: Center for
Global Development, 2003.
32 On privatisation, see P Cook & Y Uchida, Privatisation and Economic Growth in Developing Countries,
Centre on Regulation and Competition (CRC) Working Paper 7, Manchester, 2001.
33 World Bank, Country Policy and Institutional Assessment, Washington, DC: World Bank, 2003. Of
course one issue is the meaningfulness of average tariffs, because of non-tariff barriers as well as tariff
implementation and variance. World Bank trade tariff data for 2004 downloaded at www.worldbank.
org.
34 Economic Freedom of the World, Annual Report, Vancouver: Frasier Institute, Vancouver, 2005.
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