ABSTRACT
Every year, governments and donors spend billions of dollars on development initiatives (Easterly, 2006). In 2012, the total OECD overseas development assistance budget to developing countries was US$151billion (OECD, 2014). Many more development initiatives go unfunded for lack of resources-so it is important to know what was achieved as a consequence of investing in a particular development project. What deserves to be scaled up and what should be abandoned? How can current designs be improved? The main di culty in answering these questions, and thus in learning how to do better development based on the results obtained, is not so much in measuring bene ts and costs as in assigning causality. How do we know that a particular result (bene t) is truly the outcome of a particular policy or project intervention (cost) and not of spurious correlation with other events such as good weather or overall economic growth, or of hidden characteristics of the project’s participants such as their di erential level of entrepreneurship? The emerging eld of impact evaluation in economic development aims to answer questions of causality. Credible impact evaluation is in high demand to determine accountability in development expenditures and to practice “results-based management” for better development interventions. In this chapter, we review the di erent methods that are used in impact evaluation and illustrate applications of these methods to various development interventions.
