Experience from over the last seven years of using PSIA to inform policy reforms shows that it is often difficult to carry out good analysis and deliver high-quality results due to a number of widespread constraints. However, these obstacles can be overcome or at least mitigated by adhering to certain operational principles. Challenges in carrying out PSIA Practitioners have identified a number of constraints in carrying out PSIA. These include: - Data constraints: when necessary data and information are not available.
- Analytical constraints: such as when reforms have 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.
Operational principles to overcome these constraints 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: ideally, countries should be responsible for the choice of reforms and for the analysis. In undertaking the analysis, they can seek external assistance from partners.
- Build on earlier experience: the ex-ante analysis of future reforms can be informed by the analysis of earlier reforms to ensure that past events and changes are considered.
- Use monitoring and evaluation to validate ex-ante analysis: ex-ante impact analysis cannot fully capture policy impacts. It is therefore important to track actual results through monitoring and, where possible, ex-post evaluation.
- Maintain flexibility on tools and methods: approaches should be tailored to country capacity, reform issues, data availability, and time pressures.
- Increase transparency in the links between policy and poverty: Laying out the logic behind a policy choice for public scrutiny – including expectations on winners and losers form reform, key assumptions, and transmission mechanisms – can help promote national debate and acceptance of reform, and serve as a baseline against which to monitor progress.
- Strive to enhance gains and minimize losses, especially among the poor: PSIA should give explicit consideration to such measures as alternative policy choices and complementary or compensatory policies, intended to enhance the benefits of stakeholders, especially poor people, and minimize losses as a result of reform.
- Build national capacity: this is key to improving analytical rigor over time, in tandem with strengthened country ownership. Areas for capacity building include data collection systems, monitoring and evaluation systems, and the institutional structures and mechanisms for fostering debate around policy reform issues in the public domain.
- Include budget for dissemination of results: This is key to inform the public an create a ongoing in-country policy dialogue.
- Discuss among donors who the PSIA aims to inform: it is key to decide before conducting the analysis who the study is aiming to inform, donor operations or the wider public.
- Usability of results is essential: PSIAs with greatest operational relevance for country-level processes pay heed to accessibility, in some cases using tools such as implementation matrices or logical frameworks for translating findings into concrete policy or programme actions for country decision-makers to consider.
- Having champions and advocates for PSIA work at country level - within and outside of government - is probably the most influential factor in terms of creating the conditions for policy change. But the level and status of these champions matters too.
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