Analyzing the Effects of Policy
Reforms on the Poor : An Evaluation of the Effectiveness of
World Bank Support to Poverty and Social Impact Analyses

The current global financial and
economic crises are likely to put enormous pressure on
governments to respond with immediate measures and to
undertake far-reaching reforms in the medium term, requiring
a substantial increase in donor support. To protect the poor
and enhance benefits to them, key policy reforms will need
to be underpinned by systematic analysis of their expected
poverty and social impacts. The World Bank's experience
to date with the Poverty and Social Impact Analysis (PSIA)
approach provides useful lessons for addressing these
issues. Overall, implementation of the PSIA approach has had
considerable limitations. There have been tensions between
the various operational objectives assigned to PSIAs. The
tensions concern inconsistencies between informing country
and Bank policy decisions in a timely way and building
country analytic capacity. PSIAs have had limited ownership
by Bank staff and managers and have often not been
effectively integrated into country assistance programs.
Quality assurance, monitoring, and evaluation of the overall
effectiveness of PSIAs have been weak. To improve
PSIAs' effectiveness, this evaluation recommends that
the Bank take measures to ensure that staff fully
understands what the PSIA approach is and when to use it,
clarify the operational objectives of each PSIA, and ensure
that the approach and timeline adopted are aligned with
those objectives. Quality assurance mechanisms should be
strengthened to ensure that PSIAs are designed to achieve
the intended effects.