Many stakeholders have expressed a concern that getting the Poverty and Social Impact Analyses (PSIA) process right is as important as improving the quality of the analysis. This document, produced jointly by German Technical Cooperation (GTZ) and the UK Department for International Development (DFID), looks at how to encourage and enable the participation of the stakeholders in the PSIA process. It concludes that PSIAs are not neutral technical instruments, and they should be understood in terms of their political context.
PSIAs aim to analyse the potential distributional impact of policies on the poorest. A PSIA conducted with due concern to national policy processes and stakeholder interests can strengthen ownership for reforms and expand the evidence base of policy. Whether or not the evidence from a PSIA is used is determined by a complex process and strongly depends on political and historical circumstances. Therefore, understanding and addressing issues related to political economy improves the likelihood that the results of the PSIA will influence decisions.
The key principles of good PSIA process are:
- PSIA should be built on an understanding of policies and policy processes: these are not technical instruments that respond in a neutral fashion to emerging evidence.
- PSIA should be embedded in local policy cycles and be a transparent part of the policy process.
- The choice of topic for PSIA should be part of broader, transparent and consultative national decision-making processes: these include national planning and Poverty Reduction Strategy (PRS) processes.
- The key actors leading the PSIA process should understand their complementary roles: these are Commissioners, Practitioners and Facilitators.
- The appraisal of PSIA proposals should take good process into account: where it is evident that PSIAs are likely to be extractive, with weak local engagement and ownership, PSIAs are unlikely to be effective.
- Communication and dialogue should be promoted to encourage broadened participation from a wide range of stakeholders. Existing or new sets of relationships that are inclusive and empowering should be further institutionalised through the PSIA process.
- Wherever possible, PSIA should build the capacity of local partners, including research practitioners, policymakers and civil society organisations.
Donor agencies or civil society organisations can play a facilitative role in encouraging PSIA to be undertaken, and in promoting a transparent and participatory dialogue on the results among a wide range of stakeholders.
- They should actively facilitate meetings and discussion between the parties, and promote independent, credible and reliable research to prevent special-interest groups hijacking the results.
- They should understand the political economy outside and inside the reform; identify the need for support; clarify expectations; and take steps to ensure longer-term sustainability.
