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The World Bank introduced the Poverty and Social Impact Analysis (PSIA) approach in fiscal 2002 to help governments and the Bank anticipate and address the possible consequences of proposed policy reforms, especially on the poor and vulnerable, and to contribute to country capacity for policy analysis. By fiscal 2007, the World Bank had supported 156 pieces of analytical work using one or more elements of the PSIA approach in 75 countries and 14 sectors. Total Bank and other donor support to PSIAs over fiscal 2004-06 amounted to US $15 million.
IEG's evaluation finds that although there have been some highly effective individual PSIAs, overall implementation of the approach has had considerable limitations.
See Recommendations
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Management Response |
Chairperson's Summary: Committee on Development Effectiveness
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Click and drag the timeline below to the right  to browse events regarding PSIAs. Click on an item for more information. |
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Ensure that staff understand what the PSIA approach is and when to use it. A lesson from the evaluation is that lack of clarity among Bank staff about what a PSIA is can create problems for quality assurance and monitoring of the quantity, quality, and effectiveness of PSIAs. Ambiguity can also hinder the appropriate allocation of funds for relevant analysis. Staff need clear guidance on whether and how the PSIA approach differs from other distributional analyses, including whether the inclusion of the word “social” in Poverty and Social Impact Analysis suggests the need to include a different type of analysis, whether or not PSIAs should be linked to specific reform and identify beneficiaries and those adversely affected by the reform, and what criteria should be used to determine when the PSIA approach is appropriate for a particular operation in a country program.
 Click here for the World Bank online training module The PSIA Approach: How and When It Is Applied
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Clarify the operational objectives of each PSIA with regard to its intended effect and tailor the approach to those objectives. The evaluation found that pursuit of the multiple operational objectives of PSIAs (i.e., informing country policies, informing Bank operations, and contributing to country capacity) can create tension and raise unrealistic expectations of what a PSIA can achieve. For example, PSIAs seeking to inform government policy decisions must adjust to the timing of the decision process, but often that is inconsistent with the approach required to build country analytic capacity. The concept note for each PSIA needs to contain a clear statement of the operational objectives of the PSIA with respect to the intended effect (not just the topics/issues to be analyzed); indicate how its approach—in particular stakeholder engagement, team composition, partner institutions, budget, and time frame—has been tailored to meet the operational objectives, and provide the rationale for the choices made; show how any tensions and trade-offs among the operational objectives will be reconciled; and discuss if the intended dissemination audience and strategy are consistent with the stated operational objectives. |
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Improve integration of the PSIA into the Bank’s country assistance program. A lesson from this evaluation is that early buy-in for PSIA work from the relevant constituencies within the Bank is as essential as buy-in from country stakeholders. Otherwise there is little chance of the analysis having an effect on the Bank’s country strategy, lending, or analytical work, almost regardless of the technical quality of the analysis. By using earmarked trust funds, PSIAs are kept outside of mainstream Bank work and could, therefore, be excluded from the work program agreements at the beginning of each year, with possible adverse effects on PSIA relevance to the country program. The evaluation recommends shifting significant decision-making and funding authority to the Regional Vice Presidencies to ensure that the PSIA topics, scope, and approach are consistent with the country assistance program and that PSIAs ask policy-relevant questions; and requiring that all earmarked funding for PSIAs be matched by a substantial contribution from the country unit budget. |
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Strengthen PSIA effectiveness through enhanced quality assurance. The evaluation found that for the PSIAs to attain their operational objectives, regional management needs to send clear signals—through questions asked—from the concept stage onwards, especially related to process and intended effect. The evaluation recommends that regional management subject PSIAs to systematic review at concept and completion stages to ensure relevance and fit of the PSIA to the country assistance program, and consistency of the proposed approach with operational objectives, in addition to ensuring technical quality; and ensure that the Bank establishes a monitoring and self-evaluation system designed to assess if PSIAs are being undertaken where appropriate and are achieving their stated operational objectives. |
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