Much has been done in a short time to mainstream the PSIA approach in the World Bank. In the last three years over 100 PSIAs have been conducted, 62 of them in countries with comprehensive poverty reduction strategies (PRS), mainly in Africa. The World Bank recommends that PSIAs should be applied to all macroeconomic and structural policy reforms, though no development organisation can undertake this on its own. That is why the World Bank is seeking partnerships with other donors and research institutes.

In order to make strategic use of these opportunities, the Federal Ministry for Economic Cooperation and Development, through GTZ, set up a trust fund at the World Bank in 2004. The aim of the fund is to promote the systematic and transparent application of PSIAs in World Bank development lending operations and to support the further development of the approach. It is hoped that the Trust Fund will also help bring about better interaction between bilateral and multilateral development cooperation.

Better cooperation on developing and applying poverty and impact analyses is considered an effective instrument for supporting the formulation and implementation of poverty reduction strategies in the partner countries and a contribution towards better donor harmonisation. 

The Trust Fund is located in the World Bank’s social development department and works closely with the poverty reduction and economic management  department. The experience so far indicates that the structure of the Trust Fund is an appropriate instrument for influencing the development and establishment of new approaches in the World Bank and in German organisations. Even in its first phase, the Trust Fund has made a decisive contribution to establishing the PSIA as an instrument for policy impact assessment at the World Bank. The PSIA is already part of the lending guidelines. Seventeen new PSIAs have been cofinanced. The various forms of cooperation between the World Bank and German Development Cooperation range from commenting on PSIA proposals, through supporting dissemination of the findings, to full integration of GTZ and KFW in the implementation of the analysis and policy dialogue. The Trust Fund has also promoted better donor coordination on poverty-oriented impact analyses, particularly through actively supporting forums for the exchange of experience and preparation of joint methodological products and promotion strategies for PSIA.

Download

• Annual Report of the World Bank Executive Director for Germany. Fiscal 2005
  The annual report discusses among other things the relevance of PSIA and the contribution made by the German Poverty and Social Fund to establishing the approach (pp. 27-30)
  siteresources.worldbank.org/.../jahresbericht2005.pdf, 0,61 MB

Link

• World Bank Operational Policies: Development Policy Lending
  World Bank guide to development policy lending, in which reference is made to PSIA
  wbln0018.worldbank.org/institutional/manuals/...