Achieving developmental impact (or additionality) is a central mandate of DFIs, setting them apart from commercial institutions. The developmental contribution of DFIs is seen as a critical component in achieving the sustainable development goals (SDGs). This work stream seeks to understand the ways in which DFIs predict, measure, and record impact.
This working paper presents our findings on the transparency of impact management. The paper analyses the use and disclosure of impact measurement practices of 20 leading bilateral and multilateral DFIs. Through a landscape analysis of these DFIs, the paper summarizes how they predict, monitor, evaluate, and disclose the development impacts of their activities, and assesses the availability and quality of project and aggregate level data on results and impact. In conjunction with a series of interviews with stakeholders and a meeting of a multi-stakeholder Expert Working Group, the paper identifies gaps in collection and reporting for both sovereign and non-sovereign operations, and highlights opportunities for improved transparency of impact measurement and reporting.
The working paper reveals that many DFIs rely heavily on ex-ante impact predictions, in many cases using ex-ante prediction tools to select and, in some cases, monitor investments. However, they rarely disclose ex-ante impact predictions. There is even less disclosure of ex-post development results, especially among non-sovereign lenders. A key barrier appears to be confidentiality agreements embedded in contracts between DFIs and their clients.
While some multilateral DFIs disclose project level results for sovereign operations, there was almost no disclosure of project level results for non-sovereign operations by either multilateral or bilateral DFIs. Aggregate impact reporting is more commonly used than project level reporting although this is also limited in its quality. In addition, they often lacked multi-year reporting, impact attribution, and disclosure of indicator definitions or methodologies.
We also conducted a webinar in September 2020 to present our findings from this work stream and to receive feedback from stakeholders. Click below to watch.