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2. Finnish Aid in a PRSP context Helsinki workshop 19 th – 21 st May 2003 Day 3: Consultants & Researchers

3. Case study: Poverty and Social Impact Analysis (PSIA) PSIA is defined as the positive and negative distributional and poverty impact of policy change on the well-being of different groups in society, with a focus on the poor and vulnerable The objective is to inform the public debate on the most appropriate policy combination for growth and poverty reduction Can be undertaken ex ante, during implementation and ex post

4. Range of techniques: Social tools (PPAs. social impact analysis, willingness to pay studies) Economic tools (benefit incidence analysis, poverty mapping, public expenditure tracking) Modelling tools (partial and general equilibrium modelling, social accounting matrix)

5. OPM managed 5 recent PSIAs: Water sector policy in Armenia Increasing rice tariffs in Indonesia Fuel tax in Mozambique Public expenditure in Rwanda The strategic export initiative in Uganda

6. Armenia: Some findings from the water sector MUNICPIAL WATER Full payment compliance would increase the percentage of the very poor by nearly 18 per cent (from 15.9 to 18.7 per cent) Collection of arrears would also have a major impact as average arrears are $9 a month The full cost of meter installation ($30) a major burden Public expenditure in Rwanda The strategic export initiative in Uganda

7. Armenia: Reduce negative impact of reforms on the poor by: Subsidising meter installation for the poor Assisting poor households with arrears forgiveness Considering block or lifeline tariff for the poor Running public awareness campaign to explain reforms and promote transparency Public expenditure in Rwanda The strategic export initiative in Uganda