Learn to measure and analyse efficiency

Development organisations, as well as evaluators, struggle with the concept of efficiency

A few years ago, one of the main conclusions of a very large set of evaluations (MFS II-evaluations), was that development organisations, as well as evaluators, struggle with the concept of efficiency, and with how to measure and analyse efficiency. The Efficiency Lab brought together a panel of experts to help NGOs understanding the problem and finding solutions.

By Heinz Greijn

No efficiency without effectiveness
Important insights shared by the panel of experts include that efficiency analysis is often of very poor quality in project setups and evaluations. This is because there is a lot of confusion about the concept of efficiency.

First, definitions used by influential bodies such as OECD suggest that efficiency is about the relation between costs of inputs and outputs. According to these definitions, even a project that has no, or even negative outcomes or impact, can still be efficient. A definition that can lead to such conclusions is not helpful for innovation and the improvement of interventions. A useful definition must be based on the premise that effectiveness is a prerequisite for efficiency. In other words, without effectiveness there can be no efficiency.

What is the purpose?
Second, the purpose of conducting an efficiency analysis is often not made explicit. Clarity of purpose is important because it has consequences for the choice of methods and tools used. Two important types of purposes need to be distinguished: 1. comparing the efficiency of an intervention with alternatives or benchmarks, and 2.  improving the efficiency of individual interventions. The experts also looked into ten typical cases of development interventions taken from the practice of member organisations of Partos. The lesson learned is that in this field it is not always possible to apply the most rigorous methods for analysing efficiency. So what, then, is the best possible way to approach efficiency analysis? This will be the core question in this blog.

Only a few practitioners and evaluators are familiar with the methods and tools to assess efficiency.

Conceptual Framework for efficiency
Markus Palenberg, member of the panel of experts explains why efficiency analysis of development projects is often of poor quality. He also offers a conceptual framework that can help to solve this. Palenberg is CEO of the Institute for Development Strategy in Munich, Germany and author of what is considered standard literature in this field: “Tools and Methods for Evaluating the Efficiency of Development Interventions. Evaluation Working Papers. Bonn: Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung (2011)”

Training efficiency analysis
Markus will also be one of the trainers of a two-day training on efficiency analysis that Partos / The Spindle will organise on 21-22 June. The Spindle is organising the training because only a few practitioners and evaluators are familiar with the methods and tools to assess efficiency. The training will be particularly interesting for evaluators, M&E managers and other professionals for whom the efficiency question is relevant in the design, planning, implementation and evaluation stage of projects.

 

Questions? Contact Heinz Greijn – facilitator of The Efficiency Lab powered by Partos /The Spindle.

 

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