About Modeling and Policy Impact Analysis (MPIA)

The MPIA network aims to develop high-quality national and comparative research, capacity, and new concepts and methodologies in the modelling and assessment of the impacts of macroeconomic policies and shocks on poverty and equity at the household and intra-household levels. In particular, this network aims to:

1. Engage a critical mass of researchers on common issues to develop network interaction and collaboration, and research of high international standards;

2. Encourage comparative analyses across countries and teams;

3. Provide systematic and focused training and technical assistance; 

4. Increase visibility of the network and of their researchers, and ensuring better dissemination to national and international policy analysts.

5. Interact and share knowledge with the other PEP and MIMAP networks and projects, and with related national and international initiatives.

Thematic focus

            The basic objective of the MPIA network is to understand the impacts of macroeconomic policies on poverty and income distribution. The identification of the particular issues addressed in any given project should be based on the research team's knowledge of its specific country, considering the pertinence, urgency and technical feasibility of their analysis. Current priority themes are:

1. Economic growth

The impacts on efficiency and growth of trade liberalization and the implications for poverty and equity have not been explored in our analysis to date. More recently, there is much discussion on pro-poor growth. Without necessarily resorting to overly sophisticated dynamic approaches, we seek to explore the poverty impacts of growth in capital stock, education, technical efficiency, population, etc., resulting from a given policy shock, using the empirical literature on growth as a basis.

2. Public spending (especially health and education)

The level and composition of public spending is likely to have substantial direct and indirect impacts on poverty and income distribution. Indeed, incidence analysis has shown that public spending has strong direct poverty impacts, as consumption of publicly-provided goods varies significantly between rich and poor households. Furthermore, education and health expenses are likely to affect poverty through their impacts on human capital accumulation and, together with public investment, productivity externalities. The integration of macro models and household surveys makes it possible to analyse household-level consumption of public goods (particularly education and health) and examine the impacts of public spending. Of interest in itself, this extension allows us to examine fiscal policies that are not revenue neutral, but which entail changes in the composition and magnitude of public spending.

3. Sectoral (particularly agricultural) policies and issues

Agricultural policies are likely to have important poverty and equity effects given the importance of this sector as a source of income and food for the poor. National agricultural policy reform and international agricultural policy negotiations (e.g. in the WTO) are of particular interest. Other sectoral policies (e.g. textiles/garments or services) could also have important macro/meso-economic and poverty implications in specific countries.

4. Poverty reduction policies

African and Asian governments are increasingly adopting poverty alleviation policies through PRSPs (in Africa), fiscal reform (particularly direct and sales taxes), income transfers, land reform, etc. The MPIA network can provide valuable insights into the macroeconomic aspects of these policies. This might involve the analysis of aspects of national Poverty Reduction Strategy Papers (PRSPs) to see which are amenable to macroeconomic analysis.

5. Labor markets

The majority of the income of poor households comes from labor remuneration. Consequently, labor market issues and policies are central to the analysis of poverty. Some aspects of the labor market functioning that may be of particular interest include:

• Migration and the urban/rural or geographic disaggregation of labor.
• Education, training and the skilled/unskilled disaggregation of labor
• Gender and the male/female/child disaggregation of labor
• Regulation, taxation, unions, efficiency wages and the formal/informal/unemployed disaggregation of labor (and production)