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BRIEF

Design & Implementation: Economic and Social Analysis

June 6, 2013

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Indonesia: National Program for Community Empowerment Mandiri (PNPM)



Social and economic analyses are complementary to each other and provide critical inputs to project design and appraisal process.

Economic analysis helps determine, ex-ante, whether a project contributes to a society’s or a country’s welfare. Given that Community-Driven Development (CDD)-type interventions are poverty alleviation mechanisms, it is important to determine whether CDD projects have the institutional capacity and the processes and methodologies required to assess each project that is submitted to the institution and whether CDD projects have an impact on poverty alleviation, as measured by increases in income (poverty line) and/or consumption and improved access to basic needs.

When performing economic analysis, it is important to distinguish between two levels of economic analysis: analysis of a Bank-financed program, and analysis of program-financed subprojects.

Social analysis involves examining the socio-cultural, institutional, historical and political context of Bank-financed operations. Social analysis is a process that aims to identify the social dimensions of projects, as well as analyze the different stakeholder perspectives and priorities. Social analysis not only allows the Bank to understand the opportunities and constraints, and the likely social impacts associated with a project, but also provides spaces to incorporate stakeholders' views, establish participatory processes and inform the design of strategies for inclusion, cohesion and accountability. Understanding the social implications of projects and policies is critical in ensuring that the proposed project or policy contributes to equitable and sustainable development.

The analysis can provide insight into social diversity and gender, institutions, rules and behavior, stakeholder dynamics, participation concerns and social risks.