Participatory poverty assessments (PPAs) are broadening our understanding of both poverty and the policy process. The limitations of quantitative measurements of well-being have long been recognized, and there is a rich tradition of anthropological and sociological work that uses a range of techniques to achieve an in-depth understanding of poverty for project work. In this tradition, PPAs use a systematic participatory research process that directly involves the poor in defining the nature of poverty, with the objective of influencing policy. This process usually addresses both traditional concerns, such as lack of income and public services, and other dimensions, such as vulnerability, isolation, lack of security and self-respect, and powerlessness.
After the breakup of the Soviet Union, the CIS-7 faced exceptional challenges in building new states, democratic institutions, and market economies. All of the CIS-7 started from a situation of complex dependency on the Soviet Union, including massive transfers and subsidies and the trade arrangements of the Council for Mutual Economic Assistance (CMEA). The shocks associated with the breakup—notably the disruption of economic relations with established regional partners, termination of large fiscal transfers, and severe energy price adjustments—compounded the problems of severe structural rigidities and weak institutions.
More effective integration into the world trading system is part of the transition from central planning to markets. Based on market forces, international trade promotes more efficient resource allocation and increased productivity and growth—necessary conditions for sustainable poverty alleviation. The low-income CIS-7 countries started the transition with different resource endowments but with similar protectionist policies that isolated their economies from the rest of the world and created large distortions in prices and resource allocation.
David Kennedy, Samuel Fankhauser, and Martin Raiser
Energy and water have emerged as critical issues for the CIS-7 countries—Armenia, Azerbaijan, Georgia, the Kyrgyz Republic, Moldova, Tajikistan, and Uzbekistan—and their neighbors for at least two reasons. The first is that energy and water constitute the region’s main natural resources, and the exploitation of both was and still is a key to these countries’ mode of production. The second is that the distribution of these resources is very unequal across countries. Azerbaijan, Kazakhstan, Turkmenistan, and Uzbekistan benefit from rich energy reserves, while Armenia, Georgia, the Kyrgyz Republic, and Tajikistan have substantial water resources. This unequal distribution gives rise to potential gains from trade but it is also the source of recurrent conflict between neighboring states in the region. Energy and water issues are closely linked given that the latter can be used, inter alia, for hydropower generation and/or irrigation. Use of water in the municipal sector is not discussed in this chapter. Replenishment of the Aral Sea as an alternative to irrigation is consistent with increased winter hydro generation, discussed below under “Unlocking the Benefits from Trade.”
Mr. Thomas Helbling, Mr. Ashoka Mody, and Ms. Ratna Sahay
With the exception of Azerbaijan, which is a net energy exporter, the other low-income CIS countries—Armenia, Georgia, the Kyrgyz Republic, Moldova, Tajikistan, and Uzbekistan—face serious external debt problems.1 From a situation of virtually no debt in 1992, a meteoric increase in debt levels occurred thereafter. In particular, multilateral (IMF and World Bank) lending contributed to the high and increasingly unsustainable levels of debt, despite close monitoring by these institutions undertaken through their conditionality. The CIS-7 experience contrasts with that of other transition economies, which have managed the transition without similar debt accumulation, and is more akin to that of the poorer, highly indebted countries that are heavily reliant on official credit.2
Including the poor in policy dialogue has great potential for creating better poverty reduction policies. The original rationale of the participatory poverty assessments (PPAs) was to influence the policy dialogue by collecting information on the poor’s perceptions of poverty. Most PPAs have achieved this objective to some degree, but with substantial variation in the level of impact. The PPAs with the greatest impact tended to be those that implicitly or explicitly had more ambitious objectives. It is useful to assess impact in relation to three objectives:
This chapter identifies good practices that should be considered when undertaking participatory policy research for policy change. Emerging good practice builds on the diverse impacts of key variables discussed in the previous chapter. It is divided into three main areas in which issues are similar and linked: first, issues to be considered from an institutional perspective within the World Bank;1 second, good practice when managing a PPA in country, at the national level, including how to open up the dialogue in participatory policymaking; and third, emerging good practice in conducting participatory research with the poor at the community level, and the principles behind this method of data collection. There is no unconditional good practice in this type of work because the best approach will be determined by the context. However, box 8 gives some suggestions for good practice and minimum standards that have emerged from experience with the Bank’s PPAs. These issues are then discussed in more detail throughout the chapter.
Without doubt, the collapse of the communist bloc and the dissolution of the Soviet Union during 1989–1991 represented the largest regime change experienced in the world since the 1940s. In terms of economic policy, the countries that emerged from the Soviet bloc faced major challenges in terms of re-molding institutions and markets to deliver growth and prosperity for their citizens. The scale of the adjustment problem was most acute for the countries in the former Soviet Union. These countries had economic structures that were directed toward fulfilling specialized roles within the Soviet central planning system: for this group, the challenge of building self-functioning market-based economies was especially severe.
The recent introduction of the poverty reduction strategy (PRS) represents a significant shift in development thinking. This chapter explains the background to the development of the PRS.1 It then shows how the PPA is relevant to the development of the poverty reduction strategy by focusing on four key features of the PRS that benefit from direct consultations with the poor: poverty analysis, consultation during formulation of the strategy, monitoring of implementation, and evaluation of outcomes.