The Poverty and Social Impact Analysis(PSIA) approach, introduced by the World Bank in FY02, aimedto help the Bank and its client countries anticipate andaddress the possible consequences of proposed policyreforms, especially on the poor and vulnerable, and tocontribute to country capacity for policy analysis.According to the Bank, by FY07 it had undertaken 156 PSIAsin 75 countries and 14 sectors. Total Bank and other donorsupport to PSIAs over FY04-06 was $15 million. Developmentliterature has emphasized the importance of understandingthe institutional and political constraints to development,building domestic ownership of policy reforms, and assessingthe distributional impacts of policy actions. The PSIAapproach has correctly emphasized these aspects. The Bankhas produced a substantial body of guidance on how toaddress these aspects, and that guidance has been refinedover time to incorporate lessons learned. Developmentliterature has emphasized the importance of understandingthe institutional and political constraints to development,building domestic ownership of policy reforms, and assessingthe distributional impacts of policy actions. The PSIAapproach has correctly emphasized these aspects. The Bankhas produced a substantial body of guidance on how toaddress these aspects, and that guidance has been refinedover time to incorporate lessons learned.