Transnational Governance through Inclusive Neoliberalism:
The International Financial Institutions and the Poverty Reduction Strategy Paper  Development Paradigm

Arne Ruckert, Carleton University
 
Abstract
 
With the introduction of the Poverty Reduction Strategy Paper (PRSP) development approach in 1999, the international financial institutions (IFIs) have begun to respond to some of the criticisms raised against structural adjustment policies (SAPs) and the neoliberal development paradigm more broadly, particularly relating to the social impacts of neoliberal reforms and the lack of ownership of development policy. Initially greeted with great hope not only by the international donor community but also by large segments of civil society, recent evaluations of the PRSP process, even by the IFIs themselves, have been more somber (e.g. IMF and World Bank 2005). Various IFI critics have argued that PRSPs represent ‘old wine in new bottles', and that the introduction of the PRSP process has resulted in little significant changes in the ways in which the IFIs operate in the developing world (Soederberg 2005; Weber 2004; Fraser 2005). This paper interrogates the PRSP approach from a neo-Gramscian perspective and largely shares the concerns of critical voices regarding the continuity between SAPs and PRSPs. The paper argues that the introduction of the PRSP approach could be understood as an attempt to (re-)build neoliberal hegemony and forge a domestic consensus around a somewhat modified inclusive-neoliberal development policy regime, given that the IFIs' neoliberal policies have recently met with strong resistance from counter-hegemonic social forces in both the developed and the developing world. Hence, the ultimate goal of the PRSP process seems to be the transformation of a non-hegemonic neoliberal into a hegemonic inclusive-neoliberal world development order. Nevertheless, the paper significantly deviates from other critical accounts of the PRSP approach: where most IFI critics emphasize disconcerting continuity between SAPs and PRSPs, this paper traces the important ‘discontinuities within continuity' between SAPs and PRSPs. In an attempt to make sense of this discontinuity within continuity, the paper introduces and conceptually elaborates the notion of inclusive neoliberalism (see also Craig and Porter 2006).