Practical application of cost-utility analysis in summative evaluation

Abstract

Donors prioritise evaluation of Value for Money (VfM) in development interventions; however, the theory and practice of doing so is still developing and applied inconsistently. Theory found in donor government guides and textbooks is often high-level and economic evaluation theory can be difficult to apply in practice. This is compounded when there are multiple stakeholder groups, patchy data quality and short time horizons for decision making. This article demonstrates how Cost-Utility Analysis (CUA) can be used as a programme evaluation tool to bring practice together with theory to meet donor needs, suit development environments and provide evaluation robustness in defensible VfM conclusions. The example described here is in the evaluation of a programme in Samoa, where almost AU$10 million was donated by the Governments of New Zealand and Australia for tourism industry assistance in recovery from the 2012 Tropical Cyclone Evan (TCE). The programme design had six delivery modalities and its subsequent evaluation included an analysis of the cost utility of each modality, feeding into a VfM conclusion. This practical application of CUA theory demonstrates an effective approach to evaluating VfM.