Social Analysis in PSIA

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Social Analysis in PSIA

• Renate Kirsch
• Social Development Department
• March, 2006

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Outline

• Why do we emphasize on social analysis as an
  integral part of the PSIA approach?
• How do you conduct Social Analysis in PSIA?
• Missing How to integrate economic and social
  analysis
• PSIA process issues

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Poverty and Social Impact Analysis (PSIA)

• PSIA is the analysis of intended and unintended
  consequences of actual or potential policy
  interventions on the well-being of different
  social groups, with a particular focus on the
  poor and vulnerable
• PSIA focuses on
• The distributional impacts on different
  stakeholders,
• income and nonincome dimensions
• The positive and negative impacts of reform
• Goals
• Understand better the likely impacts of reforms
  on different groups (disaggregated along ethic,
  gender, age, spatial and livelihood lines)
• Improving quality Promoting pro-poor reforms
• Facilitating the process Building a broad
  constituency for change

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Poverty and Social Impact Analysis A 10 Step
approach?

• 1. Selecting the Reform
• 2. Identifying stakeholders
• 3. Understanding transmission channels
• 4. Assessing institutions
• 5. Gathering data and information
• 6. Analyzing impacts
• 7. Enhancing design and compensatory schemes
• 8. Assessing risks
• 9. Establishing monitoring and evaluation systems
• 10. Fostering policy debate and feedback into
  policy choice

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PSIA Main Elements

• 4 Main Analytical Elements of a PSIA
  Activities
• - Stakeholder Analysis -
  Policy dialogue process
• Institutional Analysis -
  Monitoring during
• Impact Analysis implementation
• Risk Analysis
• Social Analysis ? brings different research
  focus, ? generates different information, ?
  generated via different set of tools and methods

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PSIA A policy process
Selection of reform for PSIA
Analysis
Policy Dialog
Monitoring
Recommendation
Policy design
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Social Analysis in PSIA

• Institutional the rules of the game that
  people develop to govern group behavior and
  interaction in political, economic and social
  spheres of life
• Political the structure of power relations and
  often-entrenched interests of different
  stakeholders
• Social the social relationships that govern
  interaction at different organizational levels,
  including households, communities and social
  groups.
• ? Important to signal that reforms
• are manifested through institutional mechanisms
• have important political economy dimensions
• have differential impacts on different social
  groups

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What is the value added of social analysis in
PSIA?

• Explains how social identity and social relations
  may affect reform outcomes and impacts (ethnic
  minorities in Laos)
• Analysis of informal rules and behaviors helps to
  understand implementation issues and constraints
  (Tanzania Crop Board)
• Focus on Analysis of interests and influence of
  different stakeholders helps to understand
  effects of political economy (Indonesia Imported
  Rice Tariff Pricing)
• Helps to identify socio-political and
  institutional risks (Zambia land reform)
• Emphasis on PSIA process and dialogue helps to
  identify bottlenecks and preconditions for
  ownership of reforms

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PSIA Country CaseReforming ADMARC, Malawi
The proposed reform Privatization of 204 rural
agricultural markets run by parastatal ADMARC to
reduce strain on economy .The PSIA Assessed the
role and relative importance of ADMARC markets
for vulnerable groups in rural areas
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PSIA Country CaseReforming ADMARC, Malawi

• Methodology
• Combination of Econometric and Stakeholder
  analysis
• propensity score matching using panel data from
  1998 and new 2002 update survey
• ex-post assessment of the impact of closing
  selected ADMARC markets in recent years on
  various social groups

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Country CaseKey Findings

• Economic analysis results
• IHS-1 Distance from ADMARC markets showed
  positive impact on household consumption (up to
  20 higher)
• Analysis of both rounds indicate improvement in
  household welfare between 1997 and 2002 related
  to changes in size of household and cultivated
  land area
• Proximity to ADMARC has no impact on household
  income
• Key findings of social analysis
• Private traders are progressively replacing
  ADMARC but mainly in areas with good
  infrastructure and mainly for purchase of maize
  not for selling inputs in rural areas
• Beneficial impact of ADMARC markets more
  important in remote, rural areas that are
  under-served by private sector
• Role of ADMARC especially important in maize
  sales during hungry season food security
  social markets needed.

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Country Case Influence on Policy Dialogue in
Country

• PSIA approach has allowed the World Bank to
  review the evidence jointly with the Government
  and stakeholders, and adjust its policy advice to
  account for some the observations raised by
  stakeholders.
• The joint PSIA study has improved the quality of
  the World Bank recommendations with a more
  nuanced stance on ADMARC
• This process has created more understanding and
  ownership of the reforms, and is likely to
  achieve successful reform outcomes.

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How to conduct Social Analysis in PSIA?

• Toolkit for Institutional, Political and Social
  Analysis in PSIA (TIPS)
• The Sourcebook describes good practice techniques
  for institutional, political and social analysis
  in PSIA
• Based on lessons learned from five years of
  operational experience by World Bank, DFID, and
  other partners
• The Sourcebook does not represent operational
  policy and does not prescribe minimum
  requirements for PSIA.

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PSIA Transmission mechanisms

• Prices
• Employment
• Access to goods and services
• Assets
• Transfers and taxes
• Authority
• covers changes in power, structures and
  processes.
• Reforms often result in changes in decision
  making and in new formulations of rights,
  obligations, incentives and sanctions that in
  turn will influence the behavior of government
  actors and citizens.
• .

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A framework for Social Analysis
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1.1. Understanding country context

• Questions What is the significance of
• Historical context
• Political-ideological climate
• Political-institutional culture
• Economic and social make-up
• Tools
• Country Social Analysis
• Drivers of Change
• Power Analysis
• Governance Questionnaire

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Country Social Analysis (CSA)

• CSA is an upstream, political economy analysis
  that seeks to inform policy dialogue and to
  improve the effectiveness and sustainability of
  development interventions
• provide recommendations for the removal of
  barriers to equal opportunities for participating
  in development, accessing public institutions and
  holding them accountable,
• The CSA framework analyzes the interaction
  between two dimensions
• Social diversity, assets, and livelihoods
• What is the existing distribution of and access
  to assets and services across different social
  groups? What is the impact of that distribution
  in the livelihoods and coping strategies of the
  poor?
• Power, institutions, and governance
• What are the institutions that mediate access of
  the poor to assets and services? How do these
  institutions impact policy making and resource
  reallocation ?

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Country Social Analysis Guinea Bissau

• Institutional context of the post-conflict
  period analysis of political economy factors
  that contribute to understand its current state
  of institutional fragility and political and
  macroeconomic instability
• Macroeconomic and fiscal policies for promoting
  sociopolitical stability and growth the analysis
  reviews recent economic performance, and explores
  policy options for preserving sociopolitical
  stability
• Agriculture sector and poverty reduction impact
  of transactions costs on income generation and
  poverty reduction in the cashew sector. Attention
  to the need to diversify agricultural output
• Education and health Impact of cost recovery and
  functioning of the service delivery system.
• Poverty analysis an in-depth analysis of the
  socioeconomic profile, determinants of poverty
  and livelihoods of the poor using the 2002 ILAP
  and the 2005 QS and rapid appraisal data

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CSA Guinea Bissau Recommendations

• Poverty analysis Develop a coherent and reliable
  poverty database over time
• Institutional Enhance political stability in
  order to mitigate risks of conflict as
  experienced in the past. Address
• security issues (improving living conditions in
  military barracks downsizing the armed forces,
  reforming the pension system, and balancing the
  ethnic composition of the security sector).
• Land implement the new Land Law in order to
  provide a legal and regulatory framework. Update
  the cadastre (to facilitate thee implementation
  of a land reform)
• Macro-Fiscal policies pursue essential
  expenditure programs in order to preserve social
  and political stability
• Short-term paying salaries, delivering social
  services, improving living conditions in military
  barracks, rehabilitating basic utility services)
  
• Medium term reducing the wage bill in
  non-productive segments of the public
  administration in the context of a PSR program
• Agricultural development and poverty alleviation
  
• Increase employment generation and value added
  cashew processing
• Increasing food security and diversifying the
  growth base (fruit exports and rice production
  for internal consumption)

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1.2. Understanding policy reform context

• 1.2.1. Macro-level stakeholder analysis
• Questions Who are the stakeholders? What is
  their position with respect to policy change?
  What motivates them?
• Tools Policy interest matrix
• Political mapping
• 1.2.1. Macro-level institutional analysis
• Questions What are the institutional rules and
  relationships that influence policy reform?
• Tools Network analysis
• Transaction cost analysis

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Political mapping Import tariff removal on
agricultural staple
Opposition sectors Opposition sectors Support sectors Support sectors Support sectors Opposition sectors Opposition sectors
External actors International NGOs World Bank, IMF, WTO
Sector position Anti-system Legal opposition Ideological support Core support Ideological support Legal opposition Anti-system
Social sectors Small farmers in Region X Urban consumers
Political actors Opposition socialist party Opposition Neoliberal party Rural Municipal govts
Pressure groups Farmworker federation
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Network Analysis How GOG agencies are linked by
their expressed priorities with respect to the
Ghana Poverty Reduction Strategy
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2. Understanding the policy implementation process

• Analysis of the process of implementation allows
  us to explore how, why and under what conditions
  a policy intervention might work, or fail
• Objective a greater understanding of the
  contextual factors, mechanisms and processes
  underlying a policys success or failure.
• Stakeholders focuses on interests and the
  relative importance and influence of different
  interests groups and actors and the role each
  might play in the implementation process
• Institutions as a sets of rules that govern
  individual and collective behavior. Assesses
  whether institutions mediate and distort the
  anticipated poverty and social impact of policy
  reform
• Institutions may be formal ( legal systems,
  property rights, enforcement mechanisms) or
  informal, (cultural practices and social norms)
• Institutions operate and influence behavior in
  different domains of daily life
• the state domain (governing justice, political
  processes and service delivery),
• the market domain (governing credit, labor and
  goods) and
• the societal domain (governing community and
  family behavior).

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2. Understanding the policy implementation process
2.1. Meso-level Stakeholder Analysis Objective
To test assumptions about the interests of social
actors. Tools Stakeholder analysis
matrices Micro-political mapping Force field
analysis 2.2. Meso-level Institutional
analysis Objective To test assumptions about the
social rules governing the implementation of
policy Tools Organizational (static and
process) mapping
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Stakeholders Analysis
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Legend
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Analytical sequencing in Organizational mapping
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Cotton flow ? decrease in quality?
White as snow but always downgraded!
Accord dOuverture
Producers
He travels with the cotton and with bribes,
in case cotton has been downgraded
Interface
CT resp. for quality of cotton after signing of
Accord in theory
Marche Autogere
Convoyer
Transporters
CotonChad Ginnery
Commission de Classement
Biased balance of power
Technical Transformation and Production
Duala
97 first class cotton
-Japan -France -Europe
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3. Understanding the impacts of policy reform

• Objective examining the likely or actual impact
  of policy reform  at the meso and micro levels
• Social models are applied
• evaluating winners and losers
• understanding how different social groups act in
  the face of the events and how institutions
  impact on their lives,
• Tools Analytical frameworks that provide a
  theory of change and employ concepts of
  opportunity structure, shocks, assets,
  entitlements, capabilities
• Methods and data
• Objective Employing a common set of questions on
  impacts, linked to the transmission channels
• Tools A range of methods that generate both
  qualitative and quantitative data

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Impact analysis Methods and data
The Method-Data Framework
Participatory methods Ethnographic investigations Rapid assessments QUAL DATA CONTEXTUAL METHODS Longitudinal village surveys Consumer Assessment QUANT DATA
Qualitative module of questionnaire survey Source Adapted from Hentschel (1999) Household and health surveys Epidemiological surveys National census NON-CONTEXTUAL METHODS
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4. Policy Analysis Assessing uncertainties and
risks to policy reform

• Objective Assessing how confident we are that
  the predicted impacts will occur?
• Risk assessment utilizing PSIA data and analysis
  to identify and map the risks to policy reform.
• Institutional risks, political economy,
  exogenous, and country risks
• Scenario analysis help us choose the policy
  option that is most likely to result in our
  desired outcome
• (4 steps Identify the counterfactual, Identify
  scenarios for policy reform, Analyze the impact
  of each scenario against the counterfactual,
  Compare and choose the preferred scenario)

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Challenges

• Improving methodological rigor
• Use of standardized tools and field manuals to
  ensure consistency and replicability
• Make assumptions transparent
• Aligning economic and social analytic tools
• Integrate methods from the beginning and
  iteratively
• Use different techniques for triangulation
• Strengthen in-country capacity for PSIA
• Enhance policymakers ability to review results
  and consider policy alternatives
• Results have to be transparent, credible and easy
  to understand and communicate
• Analysis will have to be disclosed for it to be
  useful for policy dialogue
• Provide govt. and key stakeholders evidence to
  consider to inform policy debate and enhance
  ownership

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Importance of process

• The policy process is critical for analysis to
  have meaningful impact on policy
• Distinction between the process of undertaking
  PSIA from the policy process
• The latter is nested in country strategies and
  policy dialogue such as PRSPs
• e.g., the World Bank has a separate GPN on
  participation

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What determines the choice of analytical focus
and methods?

• the nature of impacts (direct and indirect)
• the channel through which impacts are transmitted
  
• Prices
• Employment
• Access to goods and services
• Assets
• Transfers and taxes
• Institutional rules or Authority
• data, resources, client capacity and time
  available

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Analytical focus vs type of data and analysis
Qualitative analysis
Quantitative analysis
Socio-cultural basis of social exclusion Access to assets and services differentiated by gender or ethnicity
Institutional economics Impact of removal of agricultural subsidies on production
Social
Economic
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Input flows (from projections to delivery) ?debt
trap
Inputs on credit, full cost deducted from final
payment

• Unclear idea about input needs
• Prices unknown

Unable to provide instructions
Fixed demand not accounting for changing needs
Distribution of inputs collection of cotton
Separate bids cause untimely- uncoordinated
distribution
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PSIA in the PRS-Cycle
Ex ante PSIA
PSIA monitoring
Diagnostic Strategy design
Monitoring
PSIA during implementation
Implementation of reforms