Executive Summary: This briefing explores the crucial role of project monitoring and evaluation in achieving impactful outcomes in international development (ID) projects. Drawing on agency theory, the research examines how these supervisory mechanisms mitigate information asymmetry and goal incongruence between project funders (principals) and implementing partners (agents). Key findings highlight the significant influence of monitoring on both information asymmetry and goal congruence, directly and indirectly impacting ID project success. While evaluation demonstrates a strong effect on aligning goals, its impact on information asymmetry requires further investigation.

Main Themes:

• The Primacy of ID Project Impact: ID projects uniquely aim to alleviate poverty and generate positive, lasting impacts for target communities. Achieving this impact is the paramount measure of success, surpassing mere project management success (time, scope, and budget).

• Agency Theory in ID Projects: Agency theory provides a lens to understand the complex relationships between funders and IPs. Information asymmetry, arising from unequal access to project information, and goal incongruence, stemming from misaligned objectives, are key challenges addressed by monitoring and evaluation.

"The Multifaceted Role of Project Monitoring: Monitoring, as a continuous process of data collection and feedback, plays a crucial role in:

• Reducing information asymmetry: It provides funders with timely insights into project progress and IP activities, enhancing transparency and accountability.
• Resolving goal incongruence: By tracking activities and outputs, monitoring encourages IPs to collaborate and work towards shared goals, aligning their actions with funder objectives.
• Project Evaluation as a Goal Alignment Tool: Project evaluation, encompassing various forms and timings, contributes significantly to goal congruence by:
• Assessing relevance: Evaluations determine the alignment of project activities with beneficiary needs and priorities.
• Promoting learning and corrective action: Evaluations provide valuable feedback for adjusting project strategies and ensuring alignment with overall objectives.

Key Findings:

• Project monitoring demonstrates a statistically significant direct and indirect impact on ID project impact, mediating both information asymmetry and goal incongruence.
• Project evaluation significantly impacts ID project impact through full mediation of goal incongruence. However, its effect on information asymmetry was not statistically supported.

Practical Implications:

• Investing in robust monitoring and evaluation systems is essential for achieving impactful ID projects.
• Funders and IPs should prioritize continuous monitoring to ensure transparency, accountability, and goal alignment.
• Project evaluations should be strategically timed (ex-ante, interim, ex-post) and actively used to address goal incongruence and promote learning.

Sources: Amin, H., Malik, M., & Scheepers, H. (2024). An agency theory unpacking of how monitoring and evaluation affect international development project impact. International Journal of Project Management, 42, 102654. Available at https://www.sciencedirect.com/science/article/pii/S0263786324000966