The Appraisal and Evaluation of Structural Adjustment Lending: Some Questions of Method

The difference between appraisal and evaluation is that appraisal is prospective: looking forward to anticipate what might happen as a result of undertaking a project or making an adjustment loan, while evaluation is retrospective: looking back at what has happened after a project has been completed or an adjustment loan made. Because, before 1980, most development aid was for projects, various methods of appraising and evaluating projects were the great priority of the 1970s. For projects, the methods of appraisal and evaluation are relatively well known, and closely connected with each other. World Bank methods are described by Ray (1984) and ODA methods by ODA (1988). They involve the calculation of a prospective economic rate of return in advance for appraisal purposes, and then calculating an actual economic rate of return for purposes of evaluation. Both of these calculations can be done with and without information on the distribution of the net benefits of the project across the affected population.