3.5.1. Impact Assessment
Impact assessment is an evaluation whose purpose is to attribute outcomes and impacts to project operations. It does this by establishing a counterfactual, which is what would have happened in the absence of the project. The counterfactual is what differentiates impact assessment from other forms of project evaluation. It is necessary to rule out competing explanations for observed results and thereby 'attribute' observed results to project operations.
Establishing a counterfactual in turn requires the creation of a valid control group who do not receive project services but who are similar to project participants in terms of observable and unobservable characteristics. An impact assessment aims to create a valid control group, whereas a project evaluation does not. In contrast to other forms of project evaluation, which focus on outputs and outcomes (the left-hand side of the causal chain), impact assessment focuses on outcomes and impacts (the right-hand side of the causal chain), and utilizes more sophisticated data collection methods and instruments.
Impact assessments serve several complementary objectives.
- Assess the impacts (both intended and unintended) of value chain projects, measure the magnitude of the impacts, and determine the causal factors underlying the impacts.
- Improve the effectiveness of existing and future value chain projects.
- Inform decisions about future value chain programming.
Good impact assessments are expensive and generally stretch over one or more years and thus are not well-suited suited as a management tool, which requires regular and/or timely production of information to guide management decision-making. Impact assessments are more appropriate for external stakeholders who seek information on project impact as a guide to development programming.
For more detail on the need for assessing the impact of value chain projects and USAID's approach to impact assessment, please see the following publications of the Private Sector Development Impact Assessment Initiative (PSD-IAI):
- IA Primer Number 1: Assessing the Impact of New Generation Private Sector Development Programs
- IA Primer Number 2: Methodological Issues in Conducting Impact Assessments of Private Sector Development Programs
- IA Primer Number 3: Collecting and Using Data for Impact Assessment
- IA Primer Number 4: Developing a Causal Model for Private Sector Development Programs
- IA Primer Number 5: Causal Models as a Useful Program Management Tool: Case Study of PROFIT Zambia
- IA Primer Number 6: Planning for Cost Effective Evaluation with Evaluability Assessment
- IA Primer Number 7: Common Problems in Impact Assessment Research