Results’ Agenda and Economists

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ImageIn the book, The Idea of Justice, Amartya Sen motivates the discussion on the importance of processes and responsibilities by relying on an example. In the Gita (part of the Mahabharata), on the eve of the crucial battle episode in the epic, Arjuna expresses his doubts about leading the fight which will result in so much killing. Lord Krishna, tells him that he, Arjuna, must perform his duty, that is, to fight. And to fight, irrespective of the consequences.

Krishna’s blessing of the demands of duty is meant to win the argument from a religious perspective. But most of us would share Arjuna’s concerns about the fact that, if the war were to occur, with him leading the charge on the side of justice and propriety, many people would get killed. He himself would be doing a lot of the killing, often of people for whom he had affection.

Arjuna’s dilemma goes well beyond the process-independent view of consequences. Like him, most of us believe that an appropriate understanding of social realization has to take the comprehensive form of a process-inclusive broad account.

It is well known that aid can be successful in reducing poverty in countries with sound institutions (such as the absence of corruption, respect for the rule of law, social safety nets, and sound macro policies). In these countries, every dollar of foreign aid attracts more dollars of investment, because aid helps to provide public services that investors need, such as education and infrastructure.

But large aid flows to countries that lack sound policies and institutions have little or no impact. Furthermore there is little evidence to support the notion that an inadequate policy and institutional environment can be overcome by targeting assistance to specific activities - such as health or education. This is because like other money, aid dollars are fungible.

Yet, projects can be valuable if they open the way for systemic change throughout an entire sector. Unfortunately, the aid system is still not used to evaluate projects in terms of the impact they have on poverty and other objectives it is supposed to achieve.

Impact evaluation tries to measure the outcomes of a program intervention in isolation of other possible factors. It tries to answer questions such as: Is the intervention producing the intended benefits and what was the overall impact on the population? Could the program or project be better designed to achieve the intended outcomes? Are resources being spent efficiently?

Impact evaluation is expensive, time consuming and technically complex. Many evaluations have also been criticized because the results come too late, do not answer the right questions, or were not carried out with sufficient analytical rigor. Yet, with proper and early planning, a rigorous evaluation can be powerful in assessing how effective programs are.

If our work is to be judged by the results we achieve, we must monitor our programs and link results to actions. A result oriented program does not make our life less difficult than it is now. On the contrary, the need to judge what we achieve in our programs requires close monitoring and supervision, because, in judging results, we must look at comprehensive outcomes (which include the processes involved, as perceived by Arjuna on the eve of his battle).

A results agenda for knowledge products is even more difficult to design than for projects. Economists love to cite a statement by John Maynard Keynes from the last chapter of his General Theory: some ideas, right or wrong, have more power than common mortals may think. They command the world, because “practical men,” who believe they are immune from any intellectual influence, are, in general, “slaves of some defunct economist.”

No way, says Paul Samuelson in Inside the Economists’ Mind. The popularity of Keynes’s saying only reveals vanity among economists, or the desire to leave a mark in history. As a matter of fact, any madman sitting in a position of power could generate his own delusions without help from intellectuals, whether the ideas are from the frontiers of science or are out of fashion. In addition, the economists who surround public authorities cook what the government would like to digest.

Samuelson’s reflections recommend modesty. Our priority is to engage all in a debate over what are the results we should look for and which instruments can take us there. None of us have the final answer. We need to ask the right questions, listen and learn to create solutions as we move ahead.


Authors

Eliana Cardoso

Former Acting Chief Economist

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