Evidence-based development cooperation: greater effectiveness through impact evaluations
Policy paper of the Effective Altruism Foundation (June 2017)
Global poverty is one of the most pressing ethical problems of our time. Every day, 16,000 children under the age of five years old die—a tragedy that we only allow to continue because it does not happen before our very eyes (UNICEF, WHO, World Bank & UN-DESA, 2013; United Nations, 2016). Geographical distance, however, does not absolve us from responsibility. Through foreign and development policy, wealthy countries like Germany and Switzerland can make a considerable contribution to alleviating this plight.
At the same time, child mortality along with other poverty indicators is at an all-time low. Since 1990, the global proportion of people living in extreme poverty has fallen by 27 percentage points (Our World in Data, 2016a, 2016b), and at the end of 2016, 9.1% of the world’s population still lived below the poverty line of U.S. $1.90 per day (adjusted for purchasing power) (World Bank Group, 2016).
However, these improvements are not really due to development cooperation; rather, they are mainly a result of the rapid economic growth of China and India in recent decades (Ghosh, 2010). Can development cooperation make a significant contribution to development at all? And if so, under what conditions?
In the last decade, development economics has been thoroughly researched and our knowledge base has become stronger. Independent research institutes have investigated the effectiveness of numerous aid programs using rigorous scientific methods. While some programs have in fact proved less effective, numerous others have been demonstrated to have a disproportionately high impact, especially in the domain of healthcare. For example, just €200 worth of mosquito nets can save a whole year of life in malaria-affected areas (GiveWell, 2015a). These results rest on numerous high-quality randomized control trials, and even sceptical experts like Angus Deaton or William Easterly recognize the effectiveness of such programs (GiveWell, 2015b).
Germany and Switzerland are already involved in many highly effective endeavors, but also maintain some projects that are practically useless according to current scientific research. Based on current research findings, we recommend the following steps to improve the effectiveness of development cooperation:
Recommendation 1: Greater prioritization of projects with outstanding cost-effectiveness. Low-cost programs with high effectiveness should be systematically promoted, especially in the field of health. Prioritizing programs on the basis of their cost-effectiveness should be enshrined as a strategic goal. Germany and Switzerland are already involved in many highly effective projects like malaria prevention, and these commitments should be extended even further. Underfunded areas with high potential impact, like programs to combat neglected tropical diseases, micronutrient initiatives, and direct cash transfers, should be promoted more vigorously.
Recommendation 2: Earlier termination of demonstrably ineffective programs. Both Germany and Switzerland maintain micro credit programmes, whose effectiveness lags far behind that of direct cash transfers, targeted health programs, or other microfinance products. These and other demonstrably ineffective programs should be ended as quickly as possible. Direct cash transfers could be used as a benchmark in impact evaluations. If an evaluation shows a poor result, this should be taken as an important learning success, allowing for the allocation of financial resources to other more impactful projects.
Recommendation 3: Greater reliance on evaluations and the setting of higher quality standards. Evaluation methods currently in use fail to meet scientific quality standards. Often, the results of a program are not compared with a control group, meaning that its actual impact cannot be measured. High-quality standards comparable to those used in academic research should be required. More high-quality impact evaluations should be carried out and the quality of these evaluations should be weighted higher than their quantity. The necessary expertise could be sourced externally from specialist organizations. A modernization of survey technology would bring more precise results as well as cost savings. All results should be published openly, so that they can be reviewed independently and used globally.
Recommendation 4: More comprehensive use of scientific research findings. Some examination of impact evaluations already takes place within both German and Swiss development cooperation, but it is not a central part of the project planning process. Scientific research findings should be considered in all processes, plans, and evaluations. Evidence-based methods should be employed in all project phases. Further training could improve methodological expertise and a scientific advisory board could be formed for larger projects. Projects should be evaluated on their impact before they receive additional resources or are continued in the long term.
Recommendation 5: Additional financial resources for research and evaluation. Since even small investments in high-quality evaluations enable massive increases in impact, a larger percentage of project and total budgets should go towards evaluation and scientific research. Relevant research and innovation programs could be developed. Germany and Switzerland should also affiliate with international research projects, especially the International Initiative for Impact Evaluation (3ie) and the Global Innovation Fund. In doing so, both countries could contribute to making the development cooperation of all actors more effective.