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Modeling and Policy Impact Analysis (MPIA)

Research conducted under the MPIA program uses economy-wide models as « laboratories » to simulate macro policies/shocks and their impacts on welfare at the household level.

Applying a combination of macro models and sophisticated household survey-based microsimulation techniques.

Steps:

Construct macro model of the national economy (for example, but not exclusively, a CGE model)
Use the model as a laboratory to simulate "business as usual", i.e. no shock/policy (counterfactual)
Then, use the same model to simulate the occurence of shock/policy and compare outcomes from both simulation scenarios
Construct micro model (using household-survey data) to link the simulated macro effects to various dimensions welfare at the household level
Compare the micro impacts of various scenarios

Regarding MPIA tools and methodologies (PEP standard 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.

For more information on this series of PEP CGE models and direct access to the related files (including extensive training material), click here.

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. Up to 2012, PEP has supported a total of 54 projects under this particular program.

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.

Several of PEP special research collaboration initiatives and specific donor-commissioned studies take advantage of PEP's unique expertise in the application of MPIA-fostered cutting-edge methodologies in developing countries. For example:

to assess the impact of the global financial crisis and appropriate policy responses (example),
to analyse the distributive impacts of different growth strategies (example),
to analyse public spending and fiscal space on child welfare, (more)
etc..

Find out more about PEP projects supported under the MPIA program here

Find out more about the PEP MPIA team of international experts, resource persons and mentors, here

For more information, see the menu on the left side of this page.