ABSTRACT
The relationship between evaluation and economics is complex. First, economic theories in various ways and through different channels often influence the design and formulation of policies and programs that at some point are evaluated. Second, many evaluations are carried out by economists, not only in the field of economic policy, but also in other policy fields, depending on the specific demand. Economists have long been ambivalent about whether the discipline should focus on the analysis of markets or should be concerned with social interactions on a more general level. This chapter discusses how economics can help evaluations; and recent promising developments in economics and their possible input for evaluations. Some potential limitations of evaluations based on economic theories might include the following: individuals do not solely act according to what is happening, but also according to their perceptions of what is happening. Homogeneity is a common assumption in markets, but aggregation problems arise if this is not the case.
