How PIA works

Poverty Impact Assessment (PIA) helps donors and partner countries identify the intended and unintended consequences of their interventions. PIA provides a framework for improving baseline data and monitoring the impact hypothesis during implementation and inputs for ex post evaluations. It formulates recommendations for decision makers on how the intervention might be improved. Ex ante PIA is designed to harmonise approaches. It seeks to avoid both incoherent assessments created by competing methods and often-conflicting demands placed on partner governments.

PIA’s novelty is that it integrates already established approaches, their terminologies and procedures into one modular approach. The PIA consists of 5 modules. In each step the risks, monitoring needs and information quality are assessed and recommendations are made – based on evidence – on how the intervention can be improved.

Module 1: Poverty situation and relevance to national strategies and plans
Module 2: Stakeholder and institutional analysis
Module 3: Identification of transmission channels and overall results by channel
Module 4: Assessment of stakeholders’ and target groups’ capabilities
Module 5: Assessment of results on MDGs and other strategic goals

The PIA modules lead to a picture about possible poverty impacts of specific development projects or programmes. These projects can take place in all kinds of areas of development and need not specifically be directed towards the poor. PIA is a tool to then assess in how far the project does actually impact the poor. Although the tool has useful elements and forces one to think about a multitude of issues that otherwise might have slipped the mind, it is also based on very strong assumptions about linear relations between different situations. The tool asks you to predict poverty impacts based on very little information with little analytical tools. In academic terms, this tool wouldn’t be considered to be a very sound or solid tool for measuring poverty impact. Nevertheless, if it is used to force its users to think more in-depth about the project and its possible outcomes for the poor, it is certainly useful in its own right.

PIA is based on balancing qualitative and quantitative information to achieve a sound and reliable assessment. The level of detail can be determined by the needs of the organisation commissioning the PIA. This might be a quick exercise, based on already available data, or a longer, more detailed assessment, requiring greater consultation and research.

Ex ante PIA holds a number advantages over other forms of impact assessment:

  • It provides a flexible methodology, which can draw on more intensive data collection and analysis where these are available. It also provides useful guidance in their absence.
  • It is based on a simple framework and associated assessment procedures that build on existing methodologies and definitions. It is less demanding than poverty and social impact analysis (PSIA) in terms of data, time, personnel and financial resources.
  • It complements rather than replaces other assessments during the appraisal process, such as log-frame analysis, cost-benefit/cost-effectiveness analysis or environmental assessments.It can be applied to projects, programmes, sector-wide interventions and policy reforms. However, it is not useful for assessing budget support or identifying the poverty impacts of very small projects.
  • It can serve as a framework for monitoring impact hypotheses during implementation and as an input for later evaluation exercises.
  • It provides a flexible level of analysis dependent on the resources available. Should more detailed analysis be required, it can be scaled up to a poverty and social impact analysis (PSIA).