Socio Economic Appraisal

Project Appraisal and Finance

Socio-Economic Appraisal Mona Iyer

Practical Approaches to SEA • Why - SEA • When-For what type of projects/what stage • Controlled/guided by….. • How to carryout • Limitations/biases/errors

Why • To identify impacts of development activity and facilitate planning and decision making – (eg coastal areas, marine ecology-land reclamation in kerala backwaters, Kalpsar project)

• As a requirement for fund/loan disbursal • As a legal requirement-some aspects • To identify benefits of technology/product in the market – Eg Vodafone- SIM project, AMC Bond

• Benefits of training/technology transfer to the users (eg milk co-operatives)

When • When the project/facility/development/policy change is proposed • After the project/facility/development/policy change is in place

• SEIA Not a Mandate by Law separately, part of EIA- Moral responsibility in larger interest – Defined by Governments • Sector specific • State/ Geographic location specific

– by lending agencies – by Communities/individual affected to have voice in decisions

How-Typical Components

• Generally assessment should be across population- social equity • Assessment could focus on – Gender – Particular class (income) – Particular aboriginal community

• What matters is not only the physical changes around the projects but the meaning, perceptions and social significance of these changes to the local/affected communities.

Typical Socio-Economic Assessment Variables

• Population Characteristics

– Population Change Ethnic and racial /caste distribution – Influx or outflows of temporary workers /Seasonal residents

• Community Structures – – – – – –

Voluntary associations /Interest group change Employment/income characteristics Employment equity Industrial/commercial diversity Presence of planning and zoning activity Change in community infrastructure/resources

• Political and Social Resources – Stakeholder Leadership capability, Distribution of power and authority

• Individual and Family Changes – – – – –

Perceptions of risk, health, and safety Displacement/relocation concerns Trust in political and social institutions Attitudes towards policy/project Residential stability -Family and friendship networks Concerns about social well-being

•

• •

Methods of projecting the future -the heart of social assessment. • most fall into the following categories:

• Comparative method; Straightline trend projects taking an existing trend and simply projecting the same rage of change into the future); • Population multiplier methods(each specified increase in population implies designated multiples of some other variable, e.g. jobs, housing units);

• Scenarios(1) logical-imaginations based on construction of hypothetical futures through a process of mentally modeling the assumptions about the variables in question; and (2) fitted empiricalsimilar past cases used to analyze the present case with experts adjusting the scenario by taking into account the unique characteristics of the present case; • Expert testimony

• Computer modeling involving the mathematical formulation of premises and a process of quantitative weighing of variables); • Calculation of "future foregone" " (a number of methods have been formulated to determine what options would be given up irrevocably as a result of a plan or project, e.g., river recreation and agricultural land use after the building of a dam).

What does it give • scientifically reasonable assessment of the probable impacts in advance of the development event. • It is a very different matter from providing solid proof of impacts after the impacts occur and all the evidence is in! Generally Environmental and Socio-Economic Appraisals/Impact Assessments are by their nature anticipatory1. • • •

1The Interorganizational Committee on Guidelines and Principles for

Some limitations/common errors/biases

At every step/stage. Some typical errors are:

• •

• Problem formulation : – objectives v/s data collection tools and techniquesiterative till survey groups and tools are finalised

• Project definition: – Baseline information, influence area/population

• Sample size selection: – Statistical relevance and resource/time availability

• Sample locations: – Within influence area , co-operative respondents/amenable to survey, presence of NGO,CBO

• Questionnaire : – Language-translation to retain essence, length, sequencing. (initiate with FGDs , pilot surveys, informal meetings)

• Data profiling/analysis: – Error in entry, spread sheet errors of formula,

Other useful references • Operational Policies, The World Bank • Guidelines, JBIC, ADB • Sector/Country Specific guidelines based on project type •