ABSTRACT
Investment promotion agencies’ actions generate different impacts on foreign companies’ decisions, as well as on the host country’s economic performance. In addition, many programmes performed by IPAs are believed to have an impact, but evidence of their effect is all too often non-existent. In order to better understand the value of the effort and connections made, good measurement systems, highly trained professionals and a variety of tools are required. This chapter briefly explores how some IPAs are monitoring and evaluating the impact of their work, focusing on the less developed area of impact evaluation, using econometric tools, which are the most accepted practices for this purpose. It also discusses the challenges IPAs are facing in this area, such as a lack of data, undeveloped monitoring systems and insufficient human capital dedicated to this work. In addition, this chapter presents a general econometric model to understand the type of analysis needed to properly evaluate the impact of an IPA’s actions. The final section presents different examples of how evaluation and monitoring is being approached in the field.
