Poverty and Social Impact. No. 521.

Poverty and Social Impact Analysis (PSIA) and Poverty Impact
Assessment (PIA) are recently developed tool kits for analysing the distributional impacts of policies, programmes and projects on the well-being of the population, especially on the poor. PSIA involves rigorous in depth analysis of complex policy reform processes, while PIA is a ‘lighter’ approach focused on decisions concerning development projects and programmes.
Both approaches inform decision-makers on strategic choices during the design and implementation of development interventions and help to identify mitigating measures when negative poverty impacts are anticipated. This facilitates more evidence-based decisionmaking and implementation of policies and programmes. PIA and PSIA are thus valuable approaches to operationalise important aspects of the management for results agenda of the ’Paris Declaration on Aid Effectiveness’.

This [pdf] article discusses the basic characteristics of the PSIA and PIA approaches, their analytical building blocks, their potential influence on the political process, their contributions to the Paris Declaration and the challenges they face.