Impact assessment is divided into two parts: impact forecasting or prediction and impact evaluation. The entire process includes characterizing the most likely effects of planned policies or interventions meant to address a problem and analyses of total impact of such actions. Impact assessment is also used as a term under some circumstances for the process that analyzes whether a policy was effective or not, after the fact.
There are various objectives when preparing an impact assessment. The initial part of the process provides forecast information on the likely social, economic, institutional and environmental consequences of proposed policies. Because this is such a comprehensive type of assessment, it requires input from a variety of sources, among them from the populace that is likely to be affected by any changes.
The next part focuses on developing follow-up procedures that address any harmful or disruptive effects of the initial policies. This makes for a total policy strategy that is not only more comprehensively sound but also more sustainable. This process also provides more far-ranging benefits for a more inclusive group that contains not just the policy makers and stakeholders but other parts of the community that may be indirectly affected by the proposed policies. When well executed, impact assessment is inclusive and fully representational of groups that are often ignored when it comes to major policy decisions.