|Project Rationale and Linkage to Country/Regional Strategy
Bilateral and multilateral development agencies spend billions of dollars each year supporting development programs, and developing countries spend many times more on programs from their own resources. There is a substantial amount of empirical work on, for example, the effects of economic growth and human capital development on poverty reduction. However, evidence on the development effectiveness of individual projects and programs is limited. In particular, questions often remain on whether a given intervention produced its intended benefits, by how much, and how efficiently such intervention contributed to the intended outcomes and impacts. Unless the evidence of project and program impact is available, it is not possible to adequately inform policy makers and development partners as to how further assistance can be more effectively designed and implemented. While a number of multilateral and bilateral development institutions have introduced programs to institutionalize IE analyses, ADB lags behind.
Since its establishment, ADB has supported its developing member countries (DMCs) in designing, financing, and implementing project and policy interventions aimed at fostering economic development and reducing poverty in the region. ADB's routine economic sector work, cost-benefit analysis, and project performance monitoring, as well as project completion and self-evaluation exercises currently provide the basis for identifying project outcomes and impacts ex-ante and ex-post. The ex-ante analysis used in ADB for identifying causal links between development interventions, outcome and impact is relatively comprehensive. Monitoring of implementation progress and processes, especially inputs and outputs, is also attended through project performance reporting system. However, once projects are completed, the ex-post assessment of the causal links between outputs, outcomes and impact is often limited by the absence of carefully constructed counterfactuals, which are needed to assess of what would have happened to beneficiaries in absence of the interventions. Often, evaluations at project completion are conducted on the basis of monitoring of partial indicators, which may lead to selection bias due to focus on available rather than needed data. The lack of good counterfactuals and baselines also leads to reliance on qualitative assessments and identification of ADB contribution rather than attribution, limiting the accountability for development outcomes.
IED evaluates projects following their completion, but the extent to which it can carry out impact evaluations is limited by the availability of reliable counterfactuals and baseline surveys. It is recognized that good counterfactual identification and baselines surveys are best started at the beginning of the project cycle as part of project monitoring and evaluation system, as then these can be used to carry out the IEs at, to the extent possible, project mid-term and at project completion. As such, IEs should be implemented by RDs responsible for operations.
ADB recognizes the need to more systematically measure outcomes and impact as a way of strengthening the management of effective development. This issue was also underscored by member countries in General Capital Increase (GCI V) and Asian Development Fund (ADF X) discussions. In response ADB has taken actions toward upscaling and mainstreaming IE. Better measurement of the outcome and impact of ADB interventions will help the institution and DMC policy makers to assess the consequences of the development initiatives and help allocate limited resources more efficiently, guide the design of more effective interventions, and enable evidence-based policy dialogue.
Upscaling and mainstreaming IE into ADB operations require additional resources. These resources are needed to initiate DMC awareness raising and capacity building, and to provide seed funds to initiate start-up of new and highly selective IEs with aim to promote and expand IE activities. All departments are expected to have a direct or indirect role in an IE initiative, but the key implementing role is recognized to lie with the RDs, with technical support from ERD. As such, a RETA was selected as the appropriate modality. Designing and implementing IE studies is a complex undertaking and is not necessary or feasible for every project. The proposed TA will design and implement (or initiate implementation of) IEs of strategically selected project interventions so as to develop the knowledge base required to sharpen ADB's development effectiveness. The TA will be an important step toward implementing the initial ADB Impact Evaluation Work Program (2009 2010).