Are the costs of an intervention proportionate to the outcomes and impact of that intervention? That is the key question the Efficiency Lab has been dealing with over the past one-and-a-half years.
The Efficiency Lab was established mid-2017, in response to the finding from the MFS II evaluation that the efficiency question is poorly addressed in development projects and programmes. In the aftermath of that evaluation, the issue of efficiency was often discussed in terms of arguments in favour or against efficiency analysis. Those in favour emphasised the importance of being accountable to donors and taxpayers. Those against argued that it is very hard, even impossible, to measure the efficiency of development interventions.
Fifteen members of Partos and the Spindle decided to establish the Efficiency Lab to create clarity. The Lab was supported by a panel of renowned experts in this field including “efficiency guru” Markus Palenberg, Pol de Greve (economist) and Antonie de Kemp, nicknamed “chief efficiency” at IOB/Ministry of Foreign Affairs.
What did we learn so far?
- Use a definition that adds value to the work
There is a lot of confusion about which definition of efficiency to use. Not all definitions are useful. For example, a definition used by the OECD suggests that efficiency is about the relationship between the costs of in- and outputs. According to this definition even a project that has no, or even negative, outcomes or impact, can still be efficient. Such conclusions are not helpful for innovation or the improvement of interventions. A useful definition must be based on the premise that effectiveness is a prior condition for efficiency. Without effectiveness, there can be no efficiency. The Efficiency Lab recommends a definition of efficiency as “the relationship between the effects of an intervention and the costs of the intervention”. An intervention is efficient if the desired effects are achieved against the lowest costs.
- It’s always possible to find a suitable method for analysing the efficiency of your project
The Efficiency Lab gathered and documented ten of the most common project types within Dutch development cooperation. Then we invited our panel of experts to formulate recommendations on what method to use for each type of project. Recently four organisations conducted four pilots (Aflatoun, Simavi, War Child and Woord en Daad). Together we learned that there is a spectrum varying from interventions with rather certain outcomes of which the results are relatively easy to quantify. Some outcomes can even be quantified in monetary terms or other types of units or indices. On the other side of the spectrum, we find interventions with outcomes that are very uncertain and hard to quantify. For all these interventions suitable methods were identified.
- A tool to select the right method for a specific intervention
We learned that for many practitioners it’s hard to identify the right method for analysing efficiency. That is one of the reasons why usually nothing is done to analyse efficiency in a systematic way. To help practitioners we developed a decision tree that helps practitioners to find the right method in a matter of minutes. Another advantage is that once you know which method is applicable to a specific intervention, you automatically know which data need to be gathered to measure efficiency. The decision tree can be very useful for M&E managers, project managers and evaluators of projects.
In April the Efficiency Lab will organise a conference to present its findings. The date and venue still need to be determined, but visit our website or subscribe to our newsletter, so you stay up to date!
If you would like to know more about the Efficiency Lab contact Heinz Greijn (firstname.lastname@example.org)