The Great Experiment: Testing the PRSP Approach in Nicaragua, 2000–2007

Introduced in 1999, Poverty Reduction Strategy Papers (PRSPs) created hopes of a significant change in development cooperation and in the fight against poverty. Often, however, these hopes led to disappointment. In Nicaragua, despite the adoption of a PRSP in 2001 and conditions that seemed favourable to poverty reduction, poverty actually increased between 2001 and 2005. The article views implementation of the PRSP in Nicaragua as a policy experiment, reviews the main aspects of the PRSP process over the period 2000–2007, analyses the factors underlying the increase in poverty and draws lessons from the experiment, particularly concerning the real priorities of both the government and the donors. It concludes that it seems neither cynical nor particularly far-fetched to see the introduction of PRSPs largely as an elaborate public relations exercise designed to keep in place the essentials of structural adjustment at a time when they were coming under increasingly strong criticism.