Baikuntha Aryal Economic Policy Analysis Division Ministry of Finance

1. Evidence Based Policy MakingA presentation prepared for High Level Inception Seminaron National Strategy for the Development of Statistics (NSDS) Baikuntha Aryal Economic Policy Analysis Division Ministry of Finance

2. Presentation Outline • Brief Introduction • Use of statistics in policy making • Demand and supply of statistics • Role of Institutions • National System for Statistics • Conclusion

3. What is? Evidence based policy making : • relatively a new approach • an approach for well informed decisions about policies, programs and projects • has capabilities to defend the policy decisions, with a set of evidence • has capabilities for in-depth analysis, with information about the problem and impacts • a process that helps planners make better informed decisions by putting the best available evidence at the centre of the policy process (MDG) • can be a basis for result based management

4. Different than normal policy making? Evidence Based Policy Making has better ability to • achieve recognition of a policy issue : bases on the information and provides room for lobbying and advocacy • inform the design and choice of policy : capacity for making proper recommendations • forecast the future : understanding the issue and analyzing the impact • monitor policy implementation : measurable indicators for monitoring • evaluate policy impact : data and information makes the policy impact smooth and simpler

5. What are needed? Evidence based policy making demands • reliable and accessible statistics • understanding of statistics • statistical analysis • theoretical (with the use of statistical tools) • practical (sometimes mere theoretical analysis may not be understandable to everyone) • proper use of statistics • availability of follow up statistics However, the evidence is not statistics alone

6. What contributes for evidence base? Evidence bases are • Descriptive : expert opinion, literatures • Experimental : random trials, quasi experiments • Existing and established theories : confirmed theories, reviews • Qualitative : qualitative researches, observations • Quantitative : statistics, modeling

7. Why statistics? Statistics give the strong base of evidence for policy (some examples) • Poverty reduction : 23.8 percent population lives below poverty line, but where? Segregated data on quintiles or deciles base? • Social security : how effective? Are the real beneficiaries getting it? • Education for all : demographic information up to village/ward level, infrastructure and human resources information • Health insurance : infrastructure, health personnel, demographic information • Food security : price effect, supply constraint, international trade

8. Why statistics? ………contd Statistics give the strong base of evidence for planning • Base line information : where we stand now? • Inter sectoral linkages :how other sector contributes in developing other sector? • Complementarity : what further needs, e.g. human resource planning? • Structure of economy : what to prioritize? • Past information - bases for moving forward : what went wrong? What can be corrective measures?

9. Why statistics? ………contd Statistics in economic policy • Real sector • Growth, Investment, Consumption, Inflation • Government sector • Fiscal policy, Government expenditure and sources • Monetary sector • Monetary flow, interest rates, exchange rates • External sector • International trade, balance of payments

10. Why statistics? ………contd Statistics in every phase of policy process • Policy identification : need, coverage, possible outputs • Policy analysis :pros and cons of policy, possible impact • Policy implementation : how is it performing? Any need of change • Policy monitoring : indicators to monitor • Policy evaluation : comparison of target and achievement, impact analysis, replicability

11. Statistics vs Data Statistics is study of the collection, organization, analysis, interpretation and presentation of data Data • Cross sectional : taken at a point of time for different sample units, used for policy intervention, e.g. poverty data • Time series :taken at different time period for the same unit, used for historical analysis, e.g. GDP data • Panel : cross sectional time series taken for the same sample units, used for analyzing impact of policy intervention, e.g. NLSS data

12. Official statistics Statistics can be obtained from different sources but the official statistics have • Better reliability • Wider coverage • Less bias • Authenticity • Methodological transparency and clarity

13. Demand and supply of statistics The policies hardly make use of statistics, therefore, low demand: reasons being • Lower analytical capacity and insufficient tools • Lower understanding of statistics on policy making • Unavailability of disaggregated data • Lack of appropriate database, giving limited room for desired data • Lack of sufficient knowledge on how the desired data set to obtain from the larger database

14. Demand and supply of statistics (……….contd) The supply of data depends on the data producing agencies, therefore, in many occasions supply is constrained, because of • Undeveloped infrastructure for database • Ownership confusion • Lack of appropriate data designing • Insufficient data processing and data storage capacity • Unavailability of data on regular interval Because of insufficient supply of data, the aggregated statistics cannot be prepared for overall analysis, which affects the policy making process in a whole

15. Role for official statistics Each government agency has to be made responsible for statistics, because of • better access to data • better understanding of nature and scope of data • being regulator of all the activities under it, in most cases Therefore, Each government agency should prepare and supply the data to CBS and other agencies, as needed

16. Role for official statistics All government agencies produce data and statistics. But, CBS is made more responsible for this • CBS depends on the data produced by other agencies, e.g. agriculture data by MOAD, trade data by MOCS • Census and surveys carried out by CBS • CBS processes the data from other agencies and surveys as well as census • In a way, CBS prepares statistics based on the data provided by other agencies

17. National Statistical Systems The aim of National Statistical System is to • serve the Government, the economy and the public with data about the economic, demographic, social and environmental situation and is • expected to provide an objective perspective • to enable public scrutiny of government actions and accountability to the public, and • to open a window on the work and performance of government itself

18. Take Home Message • Statistics play crucial role in evidence based policy making • Extensive use of statistics is necessary for policy analysis • The demand and supply of statistics should match • Inter agency coordination is a must • Capacity for statistical analysis needs to strengthen • The reliability and authenticity is a matter of concern

19. Thank You !