Economics & Development

The recognition that economies are embedded within and dependent on nature is growing, with nature itself being seen as an asset to the economy. As the impacts of climate and biodiversity crises become more evident, policymakers are seeking robust measurements that integrate environmental and economic data, going beyond GDP. The System of Environmental-Economic Accounting (SEEA) supports this by measuring the interdependence of the economy and the environment. In March 2021, the United Nations Statistical Commission adopted the SEEA Ecosystem Accounting (SEEA EA) as an international standard for ecosystem accounting. This framework presents principles and recommendations for valuing ecosystem services and assets, reflecting environmental degradation in balance sheets as a cost to economic growth. SEEA EA will inform national policies and international initiatives, including the Sustainable Development Goals, the Kunming-Montreal Global Biodiversity Framework, and the United Nations Framework Convention on Climate Change, among others.

Development programs and policies are typically designed to change outcomes such as raising incomes, improving learning, or reducing illness. Whether or not these changes are actually achieved is a crucial public policy question, but one that is not often examined. Impact evaluations are part of a broader agenda of evidence-based policy making. This growing global trend is marked by a shift in focus from inputs to outcomes and results, and is reshaping public policy.The first part of the book presents an overview of impact evaluation. Chapter 1 discusses why impact evaluation is important and how it fits within the context of ethical, evidence-based policy making. The authors contrast impact evaluation with monitoring, introduce the defining features of impact evaluation, and discuss complementary approaches, including cost-benefit analysis and cost-effectiveness analysis. The authors introduce a core focus of the book: namely, how a program’s available resources, eligibility criteria for selecting beneficiaries, and timing for mplementation serve to structure options in the selection of impact evaluation methods. Finally, the authors introduce different modalities of impact evaluation, such as prospective and retrospective evaluation, and efficacy versus effectiveness trials and conclude with a discussion on when to use impact evaluations. Chapter 2 discusses how to formulate evaluation questions and hypotheses that are useful for policy. These questions and hypotheses determine the focus of the evaluation. The authors also introduce the fundamental concept of a theory of change and the related use of results chains and performance indicators. Chapter 2 provides the first introduction to the fictional case study, the Health Insurance Subsidy Program (HISP), that is used throughout the book and in the accompanying material found on the Impact Evaluation in Practice website (www.worldbank .org/ieinpractice).