This IEG evaluation, requested by the World Bank's Board of Executive Directors, represents the first independent evaluation of the PSIA experience.

The evaluation finds that:

• The PSIA approach has appropriately emphasized the importance of assessing the distributional impact of policy actions, understanding institutional and political constraints to development, and building domestic ownership for reforms
• PSIAs have not always explicitly stated their operational objectives (i.e., informing country policies, informing Bank operations, and/or contributing to country capacity)
• PSIAs have had limited ownership by Bank staff and managers and have often not been effectively integrated into country assistance programs
• Quality assurance and Monitoring and Evaluation of the overall effectiveness of PSIAs have been weak

The evaluation recommends that the World Bank:

• Ensure that Bank staff understand what the PSIA approach is and when to use it
• Clarify the operational objectives of each PSIA and tailor the approach and timeline to those objectives
• Improve integration of the PSIA into the Bank's country assistance program by requiring that all earmarked funding for PSIAs be matched by a substantial contribution from the country unit budgets
• Strengthen PSIA effectiveness through enhanced quality assurance