Assessing Budget Support with Statistical Impact Evaluation: A Methodological Proposal

Abstract

Increasingly both donor agencies and recipient governments want to assess the effectiveness of aid. Unfortunately, existing methods for impact evaluation are designed for the evaluation of homogeneous interventions ('projects') where those with and without 'treatment' can be compared. However, when assessing the effectiveness of sector aid or general budget support one is concerned about the impact of numerous heterogeneous interventions; there is then no obvious control group. The lack of a credible methodology for such high level evaluations is a serious constraint in the debate on aid effectiveness. We propose a method of statistical impact evaluation in situations with heterogeneous interventions, an extension of the double differencing method often used in project evaluations. We illustrate its feasibility with an example for the education sector in Zambia.