3.5.2. The Role of the Causal Model in Performance Monitoring and Impact Assessment
All value chain development projects are based on a causal model showing the causal (or logical) links between project activities and expected outputs, outcomes and impacts. Underlying the links in the causal model is a set of theorized causal relationships that project designers believe to be true. The causal chain (see Figure 1 below) demonstrates how these cause-and-effect relationships operate through a series of intermediate steps beginning with project activities and ending with project impacts. Performance monitoring tracks both whether the theorized links have occurred and whether they have occurred at a level consist with the project's projections. Impact assessment, on the other hand, aims to attribute the existence of the theorized links to project operations.
The importance of the causal model for performance monitoring and impact assessment is that it forces project administrators and evaluators to articulate the critical causal relationships underlying project design and evaluate the degree to which they make sense and/or are justified. Consider, for example, a value chain project with the end objective to increase exports by small-scale vegetable farmers but which focuses its indicators and targets on the number training course offered to small-scale farmers. In this example, there is a clear disconnect between the intended result and the indicators used to measure that result. A causal model that articulated the logical links between project activities, outputs, outcomes, and impacts would clarify such an inconsistency. Performance monitoring and impact assessment are not open-ended fishing expeditions. Each is (are should be) carefully designed process guided by a set of plausible theoretical relationships linking project activities to intended impacts through a clear cause-and-effect logic as expressed in the project’s causal model. Each is concerned with demonstrating the validity of these theoretical relationships; in the first case to guide project operation and management decision-making, and in the second case to provide project stakeholders with credible evidence of project impact.
For more on the role of causal models in doing impact assessment and performance monitoring, see the Impact Assessment Primer Series article #4, "Developing A Causal Model for Private Sector Development Programs" and Primer Series article #5, "Causal Models as a Useful Program Management Tool: Case Study of PROFIT Zambia."