Following the disastrous impact of the structural adjustment years, the World Bank and IMF have acknowledged that policy should be based on evidence rather than ideology, and have stated that they are developing tools and methods to analyse which policies are needed to reduce poverty. Poverty and social impact analysis (PSIA), introduced in the last four years, is one such method. This paper assesses the effectiveness of this approach in terms of the extent to which policy is informed by analysis of the potential impact of reforms. It also examines the institutions' commitment to stakeholder participation and country ownership.