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Impact evaluation as leverage

Shanta Devarajan's picture

While banks, homeowners and a few governments in the US and Europe are "de-leveraging," the buzzword in the aid business is "leveraging"--using scarce aid resources to crowd-in other resources, such as tax revenues and private capital flows.  The reason is simple:   aid resources are limited (partly due to the economic slowdown in donor countries from their de-leveraging) but development needs are great, so using aid money to stimulate tax revenues or guarantee private investors' risk could square the circle.

But we don’t just want to increase the amount of resources available:  we want to make sure those resources are spent on activities that reduce poverty.  This suggests a different way of thinking of leveraging. 

Suppose some of the aid were used to undertake a rigorous impact evaluation of a development intervention, such as vouchers for schoolchildren or report cards on the quality of health clinics.  If the results are positive in terms of development outcomes, then the impact evaluation would have shown governments how to make productive use of their own resources.  The rigorous impact evaluations of conditional cash transfers in Mexico and Brazil showed these countries how to scale up social assistance and avoid wasteful, untargeted public expenditures.  Likewise, if the impact evaluation is negative, it would show the government and the world what to avoid, saving resources that may have been wasted. Either way, the impact evaluation would have “leveraged" additional resources.

To be sure, we need to be careful in transferring findings of an impact evaluation in one country to another, because the underlying politics differ across countries, and this difference could be critical in the success of a program.  We need to avoid the temptation of policy advocacy.  [Not everyone should use conditional cash transfers even if they produced favorable results in Mexico and Brazil.] Rather, aid could be leveraged by designing knowledge partnerships to generate better evidence within countries of the impact of existing policies.  The evidence of development impact (or lack thereof) could empower citizens to demand better policies or, conversely, thwart riots for populist policies that are unlikely to help the poor.


Submitted by Raj Raina on
Thanks Shanta. To truely levarage IE results for instance to empower citizens to demand better policies, what should the Bank do differently in terms of communicating to empower citizens? IEs have a role but if we cannot effectively communicate the evidence that has been generated so that it leads to action or empowerment or better policies or "twart riots". Than why bother?!

Submitted by Farrukh Abbas on
These are two words which mean a lot to any community wether any part of the world especially these issues should have to be addressed in third world countries especialy where there r lack of resources to utilize towards the progress of country world bank have to grant these countries for development in literacy so that ppl got educated to give their families a better living standard many countries in Europe and Africa have organisation who r working for this purpose but there is a little bit lack in developing countries i.e Afghanistan & Pakistan here there are lot of sources whether in case of manpower agriculural and minerals but there is diversion regarding utilization of sources which are not capitalize effectively world bank should have to estabish a monitoring teams who give reports with different intervals to minimize the malnutrition and misengagements governing by bodies uptil now thesd sort of work should be implemented but always there r oppotunities and new methods to improve the world economy as the world bank issues certain grants to any country should based upon legislative culture and depending on the political work image of any organisation or Party these are the preventive and corrective measures if we adopt we can bring a revolutionary change towards prosperity of the world

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