Hello! I am Irene Basile, policy analyst at the OECD Development Co-operation Directorate. We provide evidence-based policy guidance on innovative approaches to foster private sector participation in development outcomes. As a former independent evaluator, I was astonished to discover the wide gap in evaluation practices between the development finance and the development co-operation spheres.
Indeed, members of the OECD Development Assistance Committee are increasingly turning toward market-oriented solutions, such as blended finance and impact investing, to achieve the Sustainable Development Goals in developing countries. However, complex governance, organizational diversity, and lack of harmonization deeply affect the evaluability of such instruments. As the delivery chain grows longer, it becomes more difficult for governments to exercise their steering and oversight function, and for evaluators to reconstruct causal links.
- Development finance and co-operation actors need a common language, for example definitions of impact and additionality. Evaluators must also improve their financial literacy, since the combination of financial and evaluation skills is not easily sourced on the market.
- Existing evaluations show a wide diversity, both on the criteria and the methodological approaches. More collective thinking and experience sharing is needed to understand the relevance of individual methods for specific investment modalities.
- The assessment of investment operations should not be confused with, and cannot replace, ex-post evaluation of public policies supporting those investments. Too many conversations among impact investors focus on estimating or measuring outcomes for external accountability; policymakers need to ensure long-term learning based on actual and independently observed results.
In a field where information is scattered and hard to obtain, existing repositories of knowledge are valuable. The OECD and the UNDP Evaluation Resource Centres are good starting points to understand what works and in which context. A systematic review of existing evidence would significantly improve our understanding of the potential contribution of investment instruments in achieving SDGs.
Over the years, the OECD Development Assistance Committee has greatly contributed to harmonizing evaluation practices in development cooperation, but this is not yet true for the development finance arena, which does not abide to the same vocabulary and standards. Progress in development evaluation has historically focused on grant-based modalities, leaving aside the use of market-oriented instruments.
By adopting the Blended Finance Principles, the OECD’s Development Assistance Committee has renewed its commitment to transparency and results. The DAC Network on Development Evaluation has a potentially very important role to play in bridging the cultural gaps among development finance providers (development banks, agencies, private intermediaries, etc.). As champion governments—like Denmark, Norway, and Germany—combine forces to explore the most appropriate evaluation methodologies for investments in development co-operation, we should expect the issue to gain even more traction over the next years.
This is the first in a series of blogs hosted by the Social Impact Measurement TIG. The blogs this week are an exciting peek at the work of the TIG—you’ll hear from people who balance impact measurement and evaluation as investors, grantmakers, and social entrepreneurs.
The American Evaluation Association is celebrating Social Impact Measurement Week with our colleagues in the Social Impact Measurement Topical Interest Group. The contributions all this week to aea365 come from our SIM TIG members. Do you have questions, concerns, kudos, or content to extend this aea365 contribution? Please add them in the comments section for this post on the aea365 webpage so that we may enrich our community of practice. Would you like to submit an aea365 Tip? Please send a note of interest to email@example.com. aea365 is sponsored by the American Evaluation Association and provides a Tip-a-Day by and for evaluators.