Nicaragua : Evaluation of the Poverty Reduction Strategy Paper Process and Arrangements under the Poverty Reduction and Growth Facility

The International Monetary Fund (IMF)
and the World Bank introduced the Poverty Reduction Strategy
Paper (PRSP) process in 1999 to strengthen the poverty
alleviation focus of their assistance to low-income
countries. This report reviews Nicaragua s experience with
the PRSP process, focusing on the effectiveness of IMF and
World Bank support to the process and the extent to which
the two institutions lending and non-lending activities in
the country are aligned to the objectives of the PRSP
approach. The report is structured as follows: section B
provides background on poverty, the political and economic
context, and history of national strategies in Nicaragua.
Section C analyzes the PRSP process focusing on application
of underlying principles, including through formulation and
implementation processes. Section D evaluates the support of
the IMF through the PRGF. Section E assesses the support of
the World Bank to the PRSP process. Section V summarizes the
main findings and attempts to draw lessons for the PRSP
process and for Bank and Fund operations.