Blind spot: the continued failure of the World Bank and IMF to fully assess the impact of their advice on poor people

Do the World Bank and the IMF fully consider how their advice might affect the lives of the poor? This paper contends that both institutions should ensure that before they recommend a course of action, they analyse its impacts on poor people through the use of Poverty and Social Impact Analysis (PSIA).

Authors outline key failings of international financial institutions in the PSIA processes, they include failure to:

• ensure PSIA influences programme design
• look at a range of policy options
• conduct PSIA that is comprehensive
• ensure PSIA is country-led
• engender public debate in-country.

Concrete recommendations to the World Bank and IMF include:

• present a comprehensive strategy to ensure that a country-led PSIA is included in the design of, and carried out prior to, all key structural and economic reforms or projects with a significant distributional impact
• pass key programmes or major projects only where a country-owned PSIA has been carried out
• define what is meant by ‘significant distributional impact’, so that the process is transparent