How do donors in international development make sure they are not wasting money? Doing so is harder than it may initially seem. Money is spent thousands of miles away from headquarters, in settings where information is poor, politics complex and staff turnover rapid. In practice, many use Value for Money (VfM) analysis to try and stay on top of this – generally based on a reasoned trade-off between economy, efficiency and effectiveness, sometimes taking into account equity and sustainability as well.
In a recent policy brief, Oxford Policy Management and the International Decision Support Initiative (iDSI) have asked “would the VfM analysis that the UK’s Department for International Development conduct on their programme expenditure be more useful if lessons were learnt from the iDSI Reference Case for Economic Evaluation?”. It is argued that significant methodological improvements are available to DFID – which could make the information they generate more useful for their decision makers. These recommendations are also applicable to other donors who follow similar guidelines for monitoring their VfM.