Analyzing the Effects of Policy Reforms on the Poor

This IEG evaluation, requested by the World Bank's Board of Executive Directors, represents the first independent evaluation of the PSIA experience.

The evaluation finds that:

• The PSIA approach has appropriately emphasized the importance of assessing the distributional impact of policy actions, understanding institutional and political constraints to development, and building domestic ownership for reforms
• PSIAs have not always explicitly stated their operational objectives (i.e., informing country policies, informing Bank operations, and/or contributing to country capacity)
• PSIAs have had limited ownership by Bank staff and managers and have often not been effectively integrated into country assistance programs
• Quality assurance and Monitoring and Evaluation of the overall effectiveness of PSIAs have been weak

The evaluation recommends that the World Bank:

• Ensure that Bank staff understand what the PSIA approach is and when to use it
• Clarify the operational objectives of each PSIA and tailor the approach and timeline to those objectives
• Improve integration of the PSIA into the Bank's country assistance program by requiring that all earmarked funding for PSIAs be matched by a substantial contribution from the country unit budgets
• Strengthen PSIA effectiveness through enhanced quality assurance