Poverty and social impact analysis (PSIA) implies an analysis of the distributional impact of policy reforms on the well-being or welfare of different stakeholder groups, with particular focus on the poor and vulnerable. PSIA has an important role in the elaboration and implementation of poverty reduction strategies in developing countries. It promotes evidence-based policy choices and fosters debate on policy reform options. 

• Analyze the link between policy reforms and their poverty and social impacts
• Consider trade-offs among reforms on the basis of their distributional impacts
• Enhance the positive impacts of reforms and minimize their adverse impacts
• Design mitigating measures and risk management systems
• Assess policy reform risks
• Build country ownership and capacity for analysis

            The World Bank has developed a PSIA User's Guide that is intended for practitioners undertaking PSIA in developing countries. It introduces the main concepts underlying PSIA, presents key elements of good practice approaches to PSIA, and highlights some of the main constraints and operational principles for PSIA. This User's Guide highlights some of the key tools that practitioners may find useful to analyze poverty and social impacts of policy reforms, but does not aim to be comprehensive in coverage. It is available in several languages in the box to the right.

In addition, the Good Practice Note on PSIA has recently been published. This note provides a framework to help staff and governments acquire information on the possible distributional impact of planned reforms to improve policy design, outcomes, and sustainability of the reform program.

 You can access it by clicking here:

 http://www1.worldbank.org/operations/dpl/GPNonPSIA9204.pdf

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