Poverty and Social Impact Analysis
in the World Bank
March 2006
Aline Coudouel
Poverty Reduction & Economic Management
The World Bank
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What PSIA does
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Analysis of distributional impact of policy interventions
on the well-being of different groups, with a particular
focus on the poor and vulnerable.
PSIA helps to:
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Keep a pro-poor focus in policy reform
Underpin policy reforms with empirical evidence
Provide inputs towards a better policy dialogue
Contribute to country ownership of policies
 Ultimately: Enhance the effectiveness of interventions
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PSIA in the World Bank
Initial efforts:
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Develop users’ guide
Prepare technical guidance
Intensive training
Provide additional funding to teams
Results:
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Over 150 PSIAs since 2002, in 72 countries
After phase with incremental funds, now funded
from regular budgets
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Regional distribution of PSIAs with incremental funding
60
FY06
FY05
50
FY04
Number of PSIAs
40
FY03
30
20
10
0
Africa
Latin
America &
Carribean
Europe & East Asia &
Central Asia
Pacific
South Asia
Middle East
North Africa
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Sectoral distribution of PSIAs with incremental funding
20
Middle East North Africa
18
South Asia
16
East Asia & Pacific
Latin America & Carribean
14
Europe and Central Asia
12
Africa
10
8
6
4
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Five analytical lessons
1. Impact on different groups
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Operational (and reform-specific) groups
2. Negative and positive impacts, influence
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Political economy of reforms is critical
3. Multiple channels, short and long-term
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Net impacts (affect direction/size of impact)
4. Institutions matter
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Transaction costs, incentives, performance, capacity
5. Choice of methods and team
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Multiple data sources, complementarity
Multi-disciplinary best, but hard
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Five operational lessons
1.
Reform identification
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2.
Analytical work
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3.
Reform implementing agency close to analytical process
Policy dialogue and debate
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5.
Rigorous and unbiased, transparent and easy to understand
Interface analysis/policy making
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4.
From national policy process, selectivity essential, specific
works best
Align with broader policy cycle
Policy process no clear beginning/end (continuous scrutiny)
Participation
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Part of broader policy process (choice and debate)
No monopoly on analysis (but objectivity and rigor)
Stakeholders’ perception part of inputs into analysis
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Challenge: Consolidating success
Steady state scenario
 PSIA conducted by countries, part of PRS process
 WB relies on PRS (or similar)
In the meantime…
 Part of operational policy on Development Policy
Lending (OP 8.60)
 Mainstreaming in analytical and operational tools Country Assistance Strategy, analytical pieces (PA,
CEM, PER), lending (PRSC, DPL)
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Ensuring the future: country capacity
1. Capacity to analyze and monitor:
 Research organizations and government
 Data collection and analysis
 Methods should be understandable and replicable.
2. Capacity to use results:
 Ability of policymakers to utilize the findings
 Dissemination transparent
 Communication of results in right format
3. Interest for evidence-based policymaking
Multi-donor effort ongoing.
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www.worldbank.org/psia
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PSIA User’s Guide
PSIA e-learning course
PSIA Good practice Note
Economic tools for impact analysis:
• “The impact of Economic Policies on Poverty and Income Distribution:
Evaluation Techniques and Tools” (Bourguignon and Pereira da Silva, 2003)
• “Evaluating the Impact of Macroeconomic Policies on Poverty and Income
Distribution Using Micro-Macro Linkages Models” (forthcoming)
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Tools for Institutional, Political and Social analysis
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www.worldbank.org/tips
Country examples, case studies (book out June 2006)
Guidance on specific sectors
• Trade, monetary policy, utility provision, agricultural markets, land policy,
education (Volume 1)
• Health, labor market, pension, decentralization, public sector downsizing,
taxation, and macroeconomic modeling (Volume 2)
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