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Modelling and Policy Impact Analysis (MPIA)

Macro-micro development policy modeling

Using economy-wide (macro) models and microsimulation techniques to simulate policies/shocks and their impacts on welfare at the household level.

The MPIA program uses computable general equilibrium (CGE) models, combined with sophisticated household survey-based microsimulation techniques, as "laboratories" to simulate and link the impact of macro shocks/policies to poverty and other dimensions of household welfare.

Steps:

  1. Construct macro model of the national economy (e.g. CGE model - see below)
  2. Use the model as a laboratory to simulate "business as usual", i.e. no shock/policy
  3. Introduce and simulate the effect of a specific policy intervention or shock
  4. Compare outcomes from both simulation scenarios
  5. Construct micro model (using household-survey data) to link the simulated macro effects to various dimensions of welfare at the household level
  6. Compare the micro impacts of various scenarios

PEP's unique expertise in the application of these combined techniques - especially in the specific context of developing countries - has been used in the conduct of several, often large-scale, research initiatives and specific donor-commissioned studies. Such as, for example:

  • to assess the impact of the global financial crisis and appropriate policy responses
  • to analyze the distributive impacts of various growth strategies - e.g. investing in public infrastructure
  • to analyze public spending and fiscal space on child welfare
  • to analyze various policy issues related to employment and inclusive growth in low-income countries
  • etc. (find out more about PEP special initiatives)

Tool and methods - new series of PEP CGE models

In ten years of building capacities in developing countries for policy analysis using modeling and simulation techniques, lead researchers from the PEP MPIA expert team have come to find that there was a need for reference CGE models that were more elaborate and closer to real-life conditions than the ones that had been used so far by the scientific community. 

They realized, in particular, that policymakers today - and especially in developing countries - face new challenges that call for impact assessments that look both forward in time, and beyond national boundaries to the global economy.

And so, a group of PEP modeling experts have devoted considerable time and energy to creating a series of new PEP standard CGE models.

 These models are now valued and aknowledged worldwide as some of PEP's most important contributions to the international research community.

CLICK HERE, for more information on PEP CGE models and direct access to the related files (including extensive training material).
 

Scientific support team

The MPIA program and related research/support activities are managed by the following team:

With support from a group of PEP resource persons, composed of leading international experts in the field of economic modeling.
 

More on MPIA research

MPIA research allows to forecast the impact of shocks and policies on the multiple agents of a national economy, as well as on the welfare of individual households. Such forecasts, based on some of the most advanced techniques of economics research, provide reliable evidence base for better-informed policy formulation and program design. 

In addition, through the global infrastructure of PEP, the MPIA program also encourages comparative analyses between researchers from around the world, and especially in developing countries of Africa, Asia and Latin America, to compare methods, tools, findings and experience. Since its creation in 2002, the basic objective of the MPIA program has been to understand the impacts of macroeconomic policies on poverty and income distribution. The identification of the specific policy issues addressed in any given project is essentially based on the research team's knowledge of the concerned country, considering the pertinence, urgency and technical feasibility of the analysis. Find out more about

  • PEP projects supported under the MPIA program here
  • PEP MPIA team of international experts, resource persons and mentors, here

For more information and links to MPIA resources, see the menu on the left side of this page.

 
 
 

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