An Agency Theory Unpacking of How Monitoring and Evaluation Affect International Development Project Impact

Abstract

Impact is the overarching objective of international development (ID) projects, yet many projects struggle to attain it. Both academic literature and practical experience highlight the importance of adequate monitoring and evaluation in ensuring ID project impact. There is, however, not enough theoretical clarity on what constitutes adequate monitoring and evaluation and the specific mechanisms through which monitoring and evaluation affect ID project impact. This study addresses this important literature gap by applying agency theory to conceptualise ID project impact. We propose that monitoring and evaluation are adequate when they resolve agency issues of goal incongruence and information asymmetry. We test this novel conceptualisation statistically by drawing on a sample of 200 survey responses from ID professionals working in Pakistan. The empirical results indicate that project monitoring resolves both goal incongruence and information asymmetry to influence ID project impact. Project evaluation resolved goal incongruence to affect ID project impact, but it had no effect on information asymmetry. This novel theory informed conceptualisation and empirical testing of adequate monitoring and evaluation that resolve agency issues to ensure ID project impact carry substantial implications for both theory and practice.