Constraints Practitioners have identified a number of challenges in carrying out PSIA. These include: - Data constraints: when necessary data and information are not available
- Analytical constraints: such as when reforms have poverty and social impacts that cannot be easily analyzed, when impacts differ over time, or when the counterfactual to the reform is difficult to establish
- Capacity constraints: when the skills or financial resources are insufficient for thorough analysis
- Time constraints: when the reform processes are driven by internal urgency or by external demand for changes
Principles The challenges outlined above have often deterred policy analysts and decisionmakers from undertaking exante assessments of the poverty and social impacts of reform.While some have argued that “no analysis is better than bad analysis,” it is important to consider what analysis is feasible, even where data and capacity are limited. The question, then, is how to approach poverty and social impact analysis in the face of the various constraints. Some basic principles for a good analysis of poverty and social impacts of reforms are as follows: - Promote country ownership
- Build on earlier experience
- Use monitoring and evaluation to validate ex-ante analysis
- Maintain flexibility on tools and methods
- Increase transparency in the links between policy and poverty
- Strive to enhance gains and minimize losses, especially among the poor
- Build national capacity
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