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Background: In the 1950s and ‘60s cost effectiveness was the primary focus of evaluation of international development aid, but in recent decades this has been increasingly neglected. The most recent decade saw great interest in impact evaluation, but the step from impacts to cost effectiveness was often neglected. This article explains how a multi-year evaluation of a major international NGO that was designed to estimate country program impacts was expanded to include estimates of cost effectiveness.
Purpose: The article explains the importance and illustrates the practicability of evaluation for cost effectiveness. It describes the evaluation’s methodology and presents its major finding, that Heifer International is highly cost effective in improving the income, assets and nutrition of poor households in Albania, Nepal and Uganda.
Setting: The article focuses mainly on the 2011 evaluation of the Heifer International country program in Uganda.
Intervention: The evaluations focused on usually three to five year projects of usually a few dozen to a few hundred households, but the evaluation itself did not conduct interventions (beyond its interviews).
To add evaluation of cost effectiveness, the focus was changed from the project to the household level and evaluators estimated changes in income, assets and nutrition due to the project. Estimates of income impacts were then used as the primary basis for estimating the cost effectiveness of the respective country program (although assets and nutrition were also considered).
Data Collection and Analysis: Data were collected through two and a half to three week country program evaluations by two or three evaluators and their translators. Group and household interviews were based on questionnaires, but they also required evaluators to pursue lines of inquiry to logical conclusions. Quantitative and qualitative factors were considered as a basis for impact estimates on scales from zero to five in the original evaluation and in terms of economic values for income and assets. Analysis was carried out largely with Excel spreadsheets.
Findings: Due to Heifer International’s expenditure of about $7 million over six years, about 8,500 Ugandan families are likely to experience income gains exceeding $8.5 million a year on an ongoing basis and asset gains of about $17 million. About 5,500 of their children are likely to avoid stunting due to nutritional shortfalls. For each $1 expenditure by country programs in Albania, Nepal and Uganda, households can be expected to gain about $2.35, $1.19 and $1.25 in the respective country programs on an ongoing basis once the projects reach the maturity profile of those included in the evaluation.
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