IImpact evaluations are an essential instrument to test the validity of specific approaches to development and poverty alleviation. Impact evaluations help those involved on a project to establish whether or not there is a causal link between an intervention and those outcomes that are of importance to the policymaker. Impact evaluations fit into the chain of monitoring and evaluation process in several ways (World Bank).

• They help to assess the casual link between an intervention and an outcome of interest.
• They provide baseline evidence for the effectiveness of an intervention, which can be compared with other similar interventions. Through this process, impact evaluations assist in establishing credible cost-effectiveness comparisons.
• They can serve to build the knowledge base of what works in development. With and increasing demand for evidence of aid effectiveness, rigorous evaluations offer a method through which development successes can be highlighted.

Defining Impact Evaluation

According to the World Bank, an impact evaluation assesses the changes in the well-being of individuals that can be attributed to a particular project, program or policy. The Independent Evaluation Group (IEG) of the Bank defines impact evaluation as a ‘counterfactual analysis of the impact of an intervention on final welfare outcomes’.

The definition adopted by Asian Development Bank (ADB) highlights the fact that impact evaluation establishes whether the intervention had a welfare effect on individuals, households, and communities, and whether this effect can be attributed to the concerned intervention.

According to OECD, impact evaluation is an assessment of how the intervention being evaluated affects outcomes, whether these effects are intended or unintended. The proper analysis of impact requires a counterfactual of what those outcomes would have been in the absence of the intervention.

According to GSDRC, impact evaluations attempt to attribute change to a specific program or policy and establish what would have happened without the intervention (the counterfactual) by using scientific, sometimes experimental, methodologies such as randomized control trials or comparison groups.

Thus, the definitions given above more or less conclude that the function of an impact evaluation is to:

• Study the welfare effect of a program, though the unintended effects may also be studied sometimes
• Establish the causality of an effect, i.e. whether an effect can directly be attributed to an input
• Compare the actual observed outcomes of project participants with counterfactual outcomes (i.e. comparing a ‘with-program’ situation against a ‘without-program’ situation)
• Study the impact on a range of scales, varying from micro (individuals or households) to macro (entire community or state)

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