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IMF Staff Country Reports

by Roger Nord Thomas Dorsey

A report from the International Monetary Fund.

Is the PRGF Living Up to Expectations? An Assessment of Program Design

by Sanjeev Gupta Shamsuddin Tareq Gabriela Inchauste Mark Plant Benedict Clements Thomas Dorsey Emanuele Baldacci Nita Thacker

The creation of the Poverty Reduction and Growth Facility (PRGF) in late 1999 represented the culmination of more than two years of internal and external reviews and IMF policy discussions on the assessment and transformation of the Enhanced Structural Adjustment Facility (ESAF). The PRGF now functions as the IMF's principal instrument to support low-income countries in implementing their poverty reduction strategies. Targets and policies embodied in PRGF-supported programs should emerge from the country's own poverty reduction strategy, as laid out in its PRSP or Interim PRSP (I-PRSP). Key features which PRGF programs have in common were identified as follows: Broad participation and greater ownership; Embedding of the PRGF in the overall strategy for growth and poverty reduction; Budgets that are more pro-poor and pro-growth; Appropriate flexibility in fiscal targets ensured; More selective structural conditionality; Emphasis on measures to improve public resource management/accountability; Social impact analysis of major macroeconomic adjustments and structural reforms. The remainder of this paper provides an assessment of the extent to which PRGF-supported programs have implemented the individual key features.

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