1. Poverty and Social Impact Analysis An Introduction Ambar Narayan PREM Poverty Reduction and Equity Group April 25, 2011

2. Poverty and Social Impact Analysis Approach to analyze impact of policies on well-being of different social groups, especially poor and vulnerable Supports ex ante evidence based decision making, may include monitoring and ex post analysis as well What distinguishes a PSIA from other analytical work – Focus on impact of policy reforms, as opposed to a more general analysis of country/sector – Informing policy dialogue in a tangible way, such as influencing policy design to minimize adverse impacts on vulnerable groups, suggesting mitigating mechanisms – Can help build support for politically sensitive reforms by building evidence, generating consensus, and bringing together diverse stakeholders – A focus on institutions and how they affect policy implementation –as appropriate All of these features need not be present in every PSIA, rather the scope of the exercise should be guided by the country and policy context, and sometimes by the time and resources available 2

3. The institutional requirement: DPOs and PSIA According to OP 8.60, DPO program documents should specify which policies may have significant poverty and social consequences, particularly on poor and vulnerable groups For policies with significant consequences, the program document (PD) should have: – Analysis and summary of the effects, borrowers’ systems for managing them – Or, summary of action plan to conduct analysis before operation goes to the Board for approval Analysis of social and distributional impact of reforms should be available to public in line with the World Bank disclosure policy But DPOs represent only one of the many contexts where PSIA has a role 3

4. Selection of instruments or tools for analysis Three broad analytical choices for PSIA: 1.A “quick and dirty” approach for just-in-time policy advice 2.A more in-depth, comprehensive analysis 3.An incremental approach, with a rapid analysis leading to a more comprehensive assessment Combining tools and multidisciplinary approaches may be optimum – Choice of tool should be made after considering country and policy environment, type of reform, available time and resources Helps to disaggregate analysis by different income groups, ethnicity, gender, religion, and geographic location 4

5. Institutional priorities to improve PSIAs (Emerging from SDV, PRMPR, and IEG reviews) Context specific PSIA approach – Wider awareness and use of rapid analytical methods, triangulation of methods (qualitative/quantitative/political economy) when possible Awareness, skills, and resources for PSIA – Raise awareness among staff, access to central/regional funds and flexibility in regional budgets Mainstreaming into the work of operational regions – Better integrate PSIA into country work programs (e.g. CASs, WPAs), flag poverty/distributional issues upstream Effectiveness of PSIA in informing country policy – Develop links with country processes and connect findings to policy actions – Link with country or program M&E systems 5

6. Additional resources to support the work Multi-Donor PSIA Trust Fund: USD 19-20 Million fund over 3 years, supported by Norway, UK, Germany, Netherlands and Switzerland Objectives: – Support effective use of PSIA in guiding WB’s policy dialogue and lending – Strengthen country capacity to use PSIA to inform national policies Anchor stream (10% PRMPR and 10% SDV): to support PSIA agenda by knowledgement management, dissemination and creating “public goods” Innovative decentralized structure with each region managing its own regional window (80% of funds) – Regional window manager and focal points manage and implement the regional window in every region – Region decides on the timing of call for proposals, selection criteria – Cross-sectoral committees set up at each regional VPU to select proposals for funding 6

7. Resources for PSIA practitioners www.worldbank.org/psia www.worldbank.org/psia User’s Guide, Good Practice Note, Review papers; PSIA in Practice notes summarizing good practice examples Learning courses – PREM Learning Week, DPL Academy (OPCS), BBLs – e-Learning course (under revision) Searchable database of completed PSIA (2001 – present) – Database on PSIA in progress (internal for WB only) under construction – Database of consultants (internal for WB only) under construction PSIA SCOOP Group or FURL: “psiascoop” PSIA teams: – Anchor : Maitreyi Das, Sonya Sultan, Juan Carlos Osorio, Dorothee Georg (SDV); Ambar Narayan, Chris Trimble, Noorulain Masood (PRMPR); – Regions: Window manager and at least two more focal points in each region