Economics and impact assessment
The International Water Management Institute (IWMI) aims to overcome inequalities, unsustainable water management and water risks by identifying barriers and inequities in development goals and generating rigorous quantitative evidence on the economic-social-environmental tradeoffs in development. It uses sciences and tools in economics to inform policy design and investment decisions of key donors, governments, private sector stakeholders and farmers.
Its work in economics and impact assessment encompasses six complementary thematic areas:
- IWMI conducts experimental or quasi-experimental causal studies and impact evaluations to assess the outcomes of water-related policies, interventions or innovations. This research builds a better understanding of the economic incentives — including pricing — for sustainable, equitable and efficient water management. The evidence generated informs decision-makers on adapting and scaling these approaches while better understanding the cost-effectiveness of different approaches.
- IWMI uses behavioral science to understand farmers’ preferences, risk and climate perceptions. This approach allows it to codesign bundled innovations combining technologies with financing tools and governance systems, an approach targeted at responding to the needs of the most vulnerable groups. Adoption studies also support a better understanding of the adoption pathways for gender and social integration.
- IWMI adopts a business model approach to understanding the potential and enabling environment for scaling water-related innovations. In doing so, it supports sustainable agribusinesses and leverages public-private partnerships from nurturing to scaling.
- IWMI also conducts water valuation studies and advanced methods on the economic valuation of water. These valuations of the economic-social-environmental benefits provided by water security can support long-term, sustainable and derisked investments in water management, water (re)allocation decisions and design of incentives mechanism such as payment for ecosystem services.
- IWMI considers the macroeconomic role of the water sector and its subcomponents at the national, regional or global level. It uses partial equilibrium economic modeling, combined with hydrology, to equip decision-makers with scenario analysis for water-related policies or investments. It also analyses the weight of water in economies and trade in relation to endowments to rethink global exchanges and production systems.
- IWMI contributes to closing the water data gap by supporting the monitoring and evaluation of key interventions, supporting national partners in collecting and using water-related information and supporting the development and collection of household and individual-level integrative information on water security.
