The mandate of Agence Française de Développement (AFD) is to contribute to the financing of economic, social and/or environmental development projects.
AFD provides assistance to the public sector (state administrations, public enterprises, and local governments), the private sector, and local associative networks. It offers a large array of financial instruments to help implement sustainable development projects. AFD’s goals are to (1) reduce poverty and inequalities by 2015 (MDGs), (2) promote economic growth and (3) protect global public goods (climate, biodiversity, and global health).
Since the beginning of this decade, AFD has been engaged in the renewal of its strategic orientations, taking place in the larger context of the reform of French cooperation. Amongst strategic shifts experienced by AFD, two are noteworthy.
The first shift is the implementation of results-based management, in line with Paris Declaration commitments. As early as 2002, the first AFD strategic plan (POS I) expressed a strong concern about impact. It recommended developing a resultsoriented monitoring system, partly based on impact indicators, and being selective in funding on the basis of impact assessments. AFD management places a high priority on ensuring that AFD’s assistance is focused on development results and impacts. At all levels, the attention is now on increased and demonstrated effectiveness of development assistance. Management for Development Results is used systematically throughout the project cycle. Aggregated indicators are monitored for expected and real development results. Their definitions are standardised and harmonised with those of international agencies. Monitoring the contribution to the MDGs measures France’s and AFD’s commitments in terms of resources and results. The economic analysis of development projects goes beyond their financial sustainability. Economic costs and benefits are assessed for the society as a whole, including environmental goods and services. Analysing how each stakeholder group benefits from a project will inform the choice of transfer mechanisms.
The second shift is to a clear focus on knowledge production as a necessary complement of financial activity. According to the Second Strategic Plan (AFD 2007) the focus will be particularly on major ODArelated topics in order to contribute to French policy stances, to participate in partners’ capacity-building, and to fuel international debate.
These new orientations have contributed to developing a collective interrogation on the impact issue. One consequence has been growing awareness of the lack of knowledge of AFD’s impacts, mentioned as the ‘knowledge shortage’ in the ‘evaluation gap report’ published by the Centre for Global Development (CGD) (CGD 2006).
In fact, whereas certain types of projects or financing products, like microfinance or rural roads, have mobilised large amounts of financing, until recently AFD never conducted rigorous research on what actually works and what is attributable to its programmes. The evaluations implemented in the past produced very little information about mediumor long-term effects and none about the net change in outcomes attributable to the projects. Very understandably, project managers focus in the early phases on project design and implementation, and leave the necessary preparations for a sound evaluation for later. Until now, there has been very little incentive to design an appropriate information system linked with the projects in order to assess their impact ex post. Nor has there been incentive to compensate for the cost and development time of such a system.
The new AFD approach of strategy-driven operations and of management for development results means that, more and more, operational services must demonstrate impact to obtain funds. AFD are increasingly planning to capitalise on and measure the impact of their operations, but for the moment there is a lack of human resources and budget to implement this across the board. It seems important for AFD to first test whether rigour in impact evaluations, rather than focusing on accountability or process, improves the quality of feedback on operations.
At the same time, the international debate about impact evaluations reveals conceptual, methodological, and practical difficulties. The attribution/contribution question comes under consideration in the implementation of results-based management, particularly for an institution like AFD often involved in co-financing activities. The double meaning of the term impact in the development discourse – either long-term effects or rigorously attributable effects – remains a permanent source of ambiguity. The subtle difference between impact and additionality, a concept more frequently used (also with much ambiguity) for financial mechanisms and particularly as regards climate change, is a concern for an institution divided between the direct financing of public policy in poor countries and participation in financial incentives for global public goods in emerging countries. Methodological questions are directly linked with these conceptual debates: how to measure and attribute long-term effects, how to build a counterfactual, which kind of baseline is necessary, which impact indicators are relevant, etc.
This period of debate is very rich for AFD. It is persuading AFD’s staff that a ‘one size fits all’ conceptual and methodological approach cannot be the unique answer to the shortage of knowledge on impact and that AFD cannot draw much profit from a ‘black box’ tool for impact measurement. AFD has decided to pursue and diversify methodological and knowledge investment, especially through pilot operations and specialised partnerships, in this field of impact assessment for the forthcoming period and to actively participate in the international debate on this topic.
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This article comes from the IDS Bulletin 39.1 (2008) Fostering Impact Evaluations at Agence Française de Développement: A Process of In‐house Appropriation and Capacity‐Building
