1. Systematic country diagnostic: Poverty and equity analyses Poverty and Equity GP Summer University, July 2017

2. What does an SCD look like?
Based on these questions, the SCD identifies priority or focus areas for a country, in order to maximize poverty reduction and welfare improvements among the less well off.
What are the country’s main issues, in terms of the current trends and patterns in poverty, shared prosperity and sustainability?
What are the critical factors driving or constraining economic growth?
What are the critical factors determining the inclusiveness of growth, namely increase in welfare of the poor and less well-off?
How sustainable (environmentally, socially and fiscally) is the current pattern of growth, distribution and poverty reduction?
Systematic Country Diagnostic

3. Framing the issues, in terms of achieving the goals
Some examples:
What are the levels and trends in poverty and incomes of the bottom 40% in the country over the past 5 to 10 years?
How does the country’s performance in poverty reduction and shared prosperity compare to regional and global benchmarks, and its own historical performance?
What are the levels and trends of aggregate growth and how are they related to performance on poverty and shared prosperity?
Is aggregate income growth low overall, or is growth is not inclusive or “shared” enough? What is the distribution of growth, by sector, spatial patterns, etc.?
What are profiles of the poor, vulnerable, and the less well off, and drivers of poverty and income growth of the bottom 40%?
What major trends in environmental, fiscal or social sustainability may impede achievement of the country’s development goals?
How do government capacity and governance impede poverty reduction, inclusion, and sustainability?
Does recurrent conflict and violence impede inclusive growth and development?

4. A typical diagnostics approach
What key constraints and opportunities does the country face in accelerating progress in poverty reduction and shared prosperity sustainably?
Inadequate growth
Inclusiveness of growth
Risks to the sustainability of growth, distribution and poverty reduction
Cross-cutting themes (e.g. gender, fragility and conflict)
Constraints to private investment, productivity and entrepreneurship economy- wide and across sectors and firms
Adequate & equal opportunities and basic elements of well-being (education, health, sanitation, physical safety)
Unsustainable depletion of per-capita total wealth, acute environmental issues, or high vulnerability to natural disasters
Risks to macro- economic stability, fiscal sustainability, threats of financial crisis or external shocks
Agency and social inclusion: voice, freedom and influence in social, economic and political domains
The three themes or “branches” are intertwined
Organizing around three big themes is imperfect, but useful as it breaks down analysis into familiar pieces
Many potential complementarities and (sometimes) tradeoffs
Given interlinkages, analysis going down one branch needs to consider implications for other branches
Interlinkages also arise due to constraints that are cross- cutting, e.g.
Governance (institutional arrangements and capacity, transparency, and accountability)
Conflict and violence, and their root causes, in certain countries
Identifying market and institutional failures – critical for finding solutions
Some constraints have to do with clear market failures (e.g. imperfect credit markets, insufficient insurance mechanisms, etc.), which merit specific types of intervention
Others may be related to institutional failures, which do not correct or exacerbate the market failures
Adequate distribution of gains from growth? how assets, prices, markets and institutions affect the income of the poor/less well-off
High threat to social or political stability
Detailed set of guiding questions to identify constraints
Priorities

5. Analysis of inclusion – a snapshot
What are critical factors influencing inclusion, i.e. increase in welfare of poor and less well- off?
Adequate, equal opportunities and basic elements of well-being. E.g.
What are coverage, quality, and equality of basic opportunities? Even if there is sufficient access, what about quality, cost-effectiveness, and other factors that affect equal opportunities
Voice/Agency and social inclusion. E.g.
Are all individuals and groups (e.g. the bottom 40%, women, minorities) able to make choices and transform them into actions and outcomes through participation in social, economic and political domains?
Are certain groups socially excluded and in which ways? Are there identifiable processes through which exclusion from markets, services and spaces takes place? Why are these groups excluded?
Adequate distribution of gains from growth. E.g.
Focus on specific groups identified as inadequately benefiting from overall growth, e.g.
The poor and bottom 40%; women; sectors (e.g. informal); occupation groups (e.g. casual wage workers); lagging regions
For such groups, detailed analysis of factors that constrain employment and earnings:
Assets and access to capital
Prices/returns they face
Access to markets and economic opportunities
Policies and institutions that influence distribution of gains from growth

6. Prioritization – suggested criteria
A suggested list of criteria, to help teams assess all constraints. “Weights” of the criteria could vary across countries
Impact on goals: size of impact on sustainable increase in welfare of the poor and less well-off (relative to that of other constraints) – the “dominant” criterion
Time horizon: balance of short-term and longer-term impacts
Pre-conditions: critical issues for other things to work
Complementarities: constraints/opportunities that generate benefits beyond one dimension
Evidence base: Degree of confidence in the evidence – for identifying the problem and solutions.
As a part of this exercise, identify critical data and knowledge gaps
Political feasibility – not influence the analysis but could be considered in identifying priorities

7. Full SCD Guidance Note (http://scd)
More on process:
Guidance on consultations and disclosure
Peer reviewers
IFC involvement
Recommendations of what the concept note should include:
Recommended length of document
More on nature of analysis in SCDs
More guidance on prioritization, benchmarking
More on cross-cutting themes (gender, climate, FCV, jobs, private sector)
Data diagnostic

8. Data diagnostic template