The Political Economy of Pro-Poor Growth

Abstract

Can the PRSP process enhance pro-poor growth in developing countries? This question is addressed in a politico-economic framework considering political distortions both on the recipient and on the donor side. It turns out that PRSP processes can be a very useful tool to enhance pro-poor growth and to raise the welfare of the poor. This is the case if the international aid organizations have all necessary information to assess the political situation in recipient countries and to select the true representatives of the poor into the process. If they do not hold this information or if bureaucratic interests and public pressure reduce their incentive to obtain or use this information, PRSPs lose their effectiveness in achieving the desired objective.

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