In 2005, approximately 18.5 percent of Albanians were living in poverty, including 3.5 percent on less than one dollar per day. The Government required detailed and accurate information to make its programs to reduce poverty more effective. As a result, there was an increasing need to build Government capacity to measure, monitor and evaluate poverty and poverty-reducing programs.

In order to make its poverty strategy more coherent, efficient and integrated, the Albania Government adopted a set of guiding principles in 2005, supported by a National Development and Integration Strategy (NSDI) and a medium term budget program. The Department of Strategy and Donor Coordination at the Council of Ministers was charged with coordinating the preparation of the NSDI and, together with the Ministry of Finance and the Albanian Institute of Statistics (INSTAT), reviewing sector strategies. Since the NSDI provided clear guidelines that sector strategies be evidenced based, the Government developed a five-year program of official statistics to support the implementation and monitoring of NSDI goals. INSTAT was made responsible for coordinating the collection of the data sets needed for monitoring.

The main goal of the World Bank’s Albania Programmatic Poverty Assessment Program was to help Albania: (a) establish a high-quality survey system, consisting of a core household survey implemented at predictable intervals and with sufficient information to enable policy analysis; (b) undertake regular and credible client-driven poverty diagnostics; and (c) fill identified knowledge gaps through new analytic work. The program received multi-year financial support from the UK Government’s Department for International Development.

The analytic reports that were produced included a poverty note (2006), a full poverty assessment (2007), an evaluation of the social assistance program (2008), updated poverty maps (2008), and a report on the role of migration on human capital accumulation (2007). INSTAT staff received extensive technical assistance during the implementation of the Household Budget Survey (2007), the Living Standard Measurement Survey (LSMS, 2008) and the Labor Force Survey (2008). The survey questionnaires (especially the LSMS) included multiple modules related to the income and non-income dimensions of welfare that provided relevant information for policy evaluation, and the governance of the education and health sectors. The 2002-2005 LSMS was used to assess the targeting effectiveness of the social assistance program and its impact on labor force participation.

	"The Poverty Assessment has definitely improved our knowledge of who the poor are, where they live, and how we can assist them better. It has allowed us to deliver better our social assistance and other government spending for addressing poverty." — Valbona Kuko, Acting Director, DSDC, Council of Ministers, Government of Albania.
	"We are proud to note that our data is now widely used by international and local researchers to analyze a wide range of development questions in Albania. This will ultimately be very good for policy making in Albania." — Ines Nurja, Director, INSTAT, Albania

• The social assistance program is now better targeted—it reached one-third of the poor in 2005 compared to one-quarter in 2002. A new social assistance reform strategy will target more poor people by updating the registry and revising the targeting method.
• The capacity of Albania’s Institute of Statistics (INSTAT) to conduct multiple and complex surveys with minimal external assistance has grown considerably.
• Policy-makers are using key findings and analyses to formulate poverty-reduction action plans.
• The program contributed to the social inclusion strategy, which identifies key vulnerable groups (children, women, disabled, Roma) who need special care services.

• Multi-year commitment is essential for capacity building and knowledge transfer to take root, to allow for better planning and sequencing, and to provide time to learn and improve.
• Governments must pre-commit to fund surveys and capacity building in institutions such as INSTAT to ensure effective policy-making and obtain insights that can lead to savings in budgets.
• To succeed, capacity building programs need external partnerships (as in this case with DFID and the World Bank), that bring in diverse expertise and resources.

• Albanian Institute of Statistics (INSTAT)
• NSDI, Council of Ministers
• Ministry of Labor and Social Affairs and Equal Opportunity

• Data and documents relating to the 2002-2005 LSMS (under LSMS survey finder)
• Information on the various activities of the INSTAT in Albania
• Information on the NSDI process in Albania