Political space, pro-poor growth and poverty reduction strategy in Honduras: A story of missed opportunities

Journal of Latin American Studies

Volumn 39, Issue 2, 2007, Pages 329-354

  Cuesta, Jose ^a  

^a INTER AMERICAN DEVELOPMENT BANK   (United States)

Author keywords

Honduras; Poverty reduction strategy; Pro poor growth

Indexed keywords

PARTICIPATORY APPROACH; POVERTY ALLEVIATION; STAKEHOLDER;

CENTRAL AMERICA; HONDURAS;

EID: 34248382144     PISSN: 0022216X     EISSN: 1469767X     Source Type: Journal    
DOI: 10.1017/S0022216X07002404     Document Type: Article

References (68)

1. World Bank Operations Evaluation Department, 'The Poverty Reduction Strategy Initiative'; IMF and World Bank, '2005 PRS Review: Balancing Accountabilities'.
2. The International Development Association (IDA) is an agency of the World Bank created to grant highly facilitated, interest-free loans and grants to very poor developing countries which do not have the financial capability to negotiate loans on market terms and that implement a policy of poverty reduction and development promotion.
3. D. Booth 'Introduction and Overview', Development Policy Review, vol. 21, no. 2 (2003), pp. 131-59
4. G. Dijkstra 'The PRSP Approach and the Illusion of Improved Aid Effectiveness: Lessons from Bolivia, Honduras and Nicaragua', Development Policy Review, vol. 23, no. 4 (2005), pp. 443-64
5. S. Hickey 'The Politics of Staying Poor in Uganda', CPRC Working Paper 37, University of Manchester (2003) available at www.chronicpoverty.org/ pdfs/2003conferencepapers/Hickey.pdf (last visited 25 January 2007)
6. Institute of Social Studies/Sida 'El Más Dificil Todavía: Crecimiento Pro-Pobre en Honduras', Stockholm 2005, available at www.aci-erp.hn/doct/PRSP2004Honduras_resumen3.pdf (last visited 25 January 2007)
7. Oxfam 'From "Donorship" to "Ownership"? Moving Towards PRSP Round Two', Briefing Paper 51 (Oxford, 2004) available at http://www.oxfam.org.uk/what_we_do/issues/democracy_rights/bp51_prsp.htm (last visited 25 January 2007)
8. World Bank 'The Poverty Reduction Strategy Initiative'.
9. Ibid.
10. A Poverty Reduction Strategy Paper constitutes the official document in which the poverty reduction strategies of a country are articulated. They typically contain the following sections: A diagnostic of the poverty contexts and trends in the incumbent country; a discussion on the causes and consequences of poverty; the objectives, strategies and actions to reduce poverty in the country - including outcome indicators; the institutional set-up to operationalise the Poverty Reduction Strategy; a financial schedule on the involved costs and sources of financing; and a concluding section on the associated risks. It is also very common, as in the case of Honduras, to report on the participatory approach followed during the preparation of the PRSP.
11. Ricardo Gottschalk, 'The Macro Contents of PRSPs: Assessing the Needs for a More Flexible Macroeconomic Policy Framework', Development Policy Review, vol. 23, no. 4 (2005), pp. 419-25.
12. Institute of Social Studies/Sida, 'Aprendiendo Sobre la Marcha: La Experiencia de la Reducción de la Pobreza en América Latina' (Stockholm, 2004). http://www.iss.nl/content/download/3861/37302/version/ 1/file/PRSP?2004EvalRegional_fin.pdf
13. Booth, 'Introduction and Overview'.
14. Institute of Social Studies/Sida, 'Ilusiones y Desilusiones del Crecimiento Pro-Pobre. Dilemas y Perspectivas para la Reducción de la Pobreza en Honduras' (Stockholm, 2004). http://www.iss.nl/content/ download/3861/37302/version/1/file/PRSP2004EvalRegional_fin.pdf
15. S. Hickey, 'Capturing the Political? The Role of Political Analysis in the Multi-disciplining of Development Studies', Global Poverty Research Group, 2006. Available at http://www.gprg.org/pubs/workingpapers/ default.htm (last visited 25 January 2007).
16. J. Behrman, 'Increasing Incomes for the Poor and Economic Growth: Toward a Simple Taxonomy for Policies', Asian Development Bank Institute Research Paper No. 36, Manila, 2002. Available at www.undp.org/ povertycentre/publications/economics/ IncreasingIncomesforthePoor-Behrman-ADB-Apro2.pdf (last visited 25 January 2007).
17. Republic of Honduras, 'Estrategia de Reducción de la Pobreza'. Gobierno de Honduras, Secretaria Despacho de Presidencia (Tegucigalpa, 2001).
18. S. Tikare, D. Youssef, P. Donnelly-Roark and P. Shah, 'Participation', in World Bank, PRSP Sourcebook (Washington, 2001), pp. 237-58. However, supporting evidence is typically anecdotal rather than systematic and fails to distinguish sufficiently between alternative participatory mechanisms - which can range from information sharing or consultation to joint formulation and formal veto capacities.
19. Hickey, 'Capturing the Political?'.
20. Hickey argues that these four components focus on the various ways in which political processes, actors, institutions, events, ideologies and struggles affect the reduction of poverty. Political capital refers to the access to decision-making in the political process. Political capabilities are the institutional and organisational resources as well as collective ideas available for effective political action. Polity comprises the ways and resources through which directly or indirectly the poor achieve empowerment. Political space refers to the institutional channels, political discourses and social and political practises that shape poverty reduction interventions.
21. According to Hickey, there are serious concerns regarding the adequacy of the other concepts for capturing the relations between different players around the formulation and implementation of pro-poor policies. He argues that they are either biased to economistic notions of supply and demand (the polity approach), or are better geared to addressing issues of social capital and governance than poverty reduction strategies (political capital and political capabilities); see Hickey, 'The Politics of Staying Poor in Uganda'.
22. Ibid.
23. In theory, the President can resort to executive decrees to introduce reforms. In practice, failing to secure support from factions within his or her own party brings a dead-end to implementation. This creates incentives for the President to champion proposals that are likely to be sanctioned by different political factions at Congress.
24. M. Blanchman and K. Sharpe, 'The Transitions to "Electoral" and Democratic Politics in Central America', in W. Leogrande and J. Mendelson Forman (eds.), Political Parties and Democracy in Central America (Boulder, 1992), pp. 33-52
25. R. Sieder, 'Election and Democratisation in Honduras since 1980', Democratisation, vol. 3, no. 2 (1996), pp. 17-40
26. United Nations Development Programme 'Informe sobre Desarrollo Humano.Honduras 2002. Por una Democracia Incluyente', Tegucigalpa, 2002.
27. Julieta Castellanos, 'Seguridad Ciudadana, Sociedad Civil y Respuesta Institucional', in Leticia Salomón (ed.), Gobernabilidad Democrática y Seguridad Ciudadana en Centroamérica: El Caso de Honduras (Tegucigalpa, 2000), pp. 87-118.
28. Renán Rápalo, 'La Teoria del Contrato Social y las Experiencias de Concertación Social en América Latina', Colección Visión de País No. 2 (Tegucigalpa, 2001).
29. Latinobarómetro, 'Latinobarómetro 2005. Resultados Totales por País', 2005. Downloaded from www.latinobarometro.org
30. Mitchell Seligson, 'Gobernabilidad y Transparencia en Honduras Después del Huracán Mitch: Un Estudio de Opinión Ciudadana' (Pittsburgh, 2001).
31. Republic of Honduras, 'Alcanzando las Metas de la Estrategia de Reducción de la Pobreza. Informe de Avance del 2003 y Plan de Implementación de la Estrategia de Reducción de la Pobreza, 2004-6', Secretaria Despacho Presidencial, Tegucigalpa, 2004.
32. See A. Hirschman, Essays in Trespassing (Cambridge, 1981)
33. Larry Diamond, 'Rethinking Civil Society: Toward Democratic Consolidation', Journal of Democracy, vol. 5, no. 4 (1994), pp. 4-17. Paradoxically, by delivering further economic well-being, political aspirations rise in line with higher stability. If they suppress political aspirations, stability is compromised.
34. Alcides Hernández, 'Honduras: Contexto Económico y Social en la Época del Ajuste Estructural', in Leticia Salomón (ed.), Gobernabilidad Democrática y Seguridad Ciudadana en Centroamérica: el Caso de Honduras (Tegucigalpa, 2000), pp. 19-57.
35. Enrique Ganuza, Samuel Morley, Sherman Robinson and Rob Vos (eds.), Q¿uién se Beneficia del Libre Comercio? (New York, 2004).
36. Mario Posas, 'Gobernabilidad Democrática y Sociedad Civil en Honduras', in Leticia Salomón (ed.), Gobernabilidad Democrática y Seguridad Ciudadana en Centroamérica: El Caso de Honduras (Tegucigalpa, 2000), pp. 59-85.
37. See: http://www.iadb.org/regions/re2/consultative_group/plans/ honduras.htm (last consulted 25 January 2007).
38. Republic of Honduras, 'Evidencias al Proceso de Consulta de la Estrategia de Reducción de la Pobreza', Secretaria de Presidencia (Tegucigalpa, 2001).
39. Ibid.
40. Interestingly, though, the Institute of Social Studies/Sida paper, 'Aprendiendo sobre la Marcha', compares the official 2001 PRSP with alternative proposals presented by INTERFOROS ('Estrategia de Combate a la Pobreza', Tegucigalpa, 2000) and ASONOG ('Estrategia de Combate a la Pobreza', Tegucigalpa, 2001). On a nine criteria comparison, the three proposals look surprisingly similar in content. However, the two alternative proposals fail to spell out the financial costs of their strategies.
41. Dijkstra, 'The PRSP Approach and the Illusion of Improved Aid Effectiveness'.
42. These institutions were the World Bank and the International Monetary Fund. Notwithstanding their lack of involvement in its elaboration, before the November 2001 elections all five presidential candidates participated in a public act in support of the PRSP, despite the fact that the candidates from the small parties had voiced misgivings about the way in which the consultation process was conducted.
43. The Consultative Group is a high-ranking committee made up by members of Government and civil society (in equal proportions) presided over by the President of the Republic. Its task is to advice the Government on the elegibility of proposed PRS projects, monitor progress of the PRS, and coordinate and propose actions that ensure the participation of the civil society in the execution and monitoring of the PRS.
44. See Republic of Honduras, 'Alcanzando las Metas de la Estrategia de Reducción de la Pobreza'
45. and Republic of Honduras, 'Estrategia para la Reducción de la Pobreza. Informe de Avance 2004', Secretaria Despacho Presidencial, Tegucigalpa, 2005.
46. These three laws constitute the foundations of the tax reform implemented in Honduras between May 2002 and December 2003. They all sought to improve the distributive incidence of taxes, expand the tax base, reduce fiscal fraud, and support the efficiency of the tax administration. The laws increased the base for the sales tax and the income tax (new income sources were taxed although the rate structure remained unchanged). Other changes included the reduction in exemptions to selected imported food and beverages, the unification of vehicular registration fees and the increase in the production and consumption tax to tobacco. See L. Gasparini and M. Montenegro 'PSIA de la Ley de Equidad Tributaria de Honduras. Evaluación del Impacto Distributivo de la Reforma Tributaria de Honduras', Tegucigalpa, 2004.
47. Republic of Honduras, 'Estrategia para la Reducción de la Pobreza'.
48. These projects included post-Hurricane Mitch rehabilitation, food security, access to public education, mitigation of natural disasters, attention to the disable, among others. Republic of Honduras, 'Estrategia para la Reducción de la Pobreza'.
49. Republic of Honduras, 'Informe de Avances y Actualización. Estrategia de Reducción de la Pobreza' November 2003. Table IV.2, p. 21.
50. Republic of Honduras 'Informe de Avances y Actualización. Estrategia de Reducción de la Pobreza', March 2003, p. 9.
51. Funds effectively spent in 2001 and 2002 on projects related to economic growth, sustainability and urban poverty averaged 12 per cent, 17 per cent and 17 per cent, respectively. Execution rates improved to 48 per cent, 50 per cent and 91 per cent among projects in the areas of protection of specific groups, human capital and rural development, respectively.
52. See Republic of Honduras, 'Presupuestos de la Nación', Congreso de la Nación, Tegucigalpa, 2004
53. Republic of Honduras, 'Política Presupuestaria para el Ejercicio Fiscal 2005 y Presupuesto Pluri-anual 2005-2008', Secretaria de Finanzas, Tegucigalpa, 2004.
54. Republic of Honduras, 'Alcanzando las Metas de la Estrategia de Reducción de la Pobreza'.
55. Republic of Honduras, 'Estrategia para la Reducción de la Pobreza', argues that the main reason for these differences is the adoption later that year of a new definition of poverty spending that recognised only public education and health salaries up to three and a half and five times the average GDP per capita, respectively, as poverty-related.
56. Behrman, 'Increasing Incomes for the Poor and Economic Growth'; and Institute of Social Studies/Sida, 'Ilusiones y Desilusiones del Crecimiento Pro-Pobre'.
57. Republic of Honduras, 'Estrategia de Reducción de la Pobreza'.
58. Republic of Honduras, 'Alcanzando las Metas de la Estrategia de Reducción de la Pobreza'.
59. The Millennium Development Challenge report also explicitly acknowledges this position, stating that '[the] liberalisation and structural adjustment initiatives that started in 1990... have to date produced disappointing results as far as economic growth and poverty reduction is concerned' (Republic of Honduras, 'Honduras. Propuesta para la Corporación del Desafío del Milenio', Secretaria Despacho Presidencial, Tegucigalpa, 2004, p. 2; author's translation and emphasis).
60. Republic of Honduras, 'Alcanzando las Metas de la Estrategia de Reducción de la Pobreza', p. 8; author's translation.
61. Ibid., p. 9.
62. Ruta Lenca refers to the motherland of one the most important indigenous groups in Honduras, the Lenca. It comprises cities and villages in the Western departments of Intibuca and Lempira. Some efforts have been made towards developing the tourism potential of this area banking on its culture, history and natural resources.
63. Republic of Honduras, 'Alcanzando las Metas de la Estrategia de Reducción de la Pobreza'.
64. Republic of Honduras, Honduras: Propuesta para la Corporación del Desafío del Milenio'.
65. Republic of Honduras, 'Honduras: Tratado de Libre Comercio con Estados Unidos. Informe Final de Negociación', Secretaría de Industria y Comercio (Tegucigalpa, 2003).
66. Republic of Honduras. 'Alcanzando las Metas de la Estrategia de Reducción de la Pobreza'.
67. Republic of Honduras, 'Estrategia de Reducción de la Pobreza'.
68. Republic of Honduras, 'Alcanzando las Metas de la Estrategia de Reducción de la Pobreza'; and UNDP, 'Informe sobre Desarrollo Humano'.