Efficiency and Value in Evaluation in 2025

Sharing my contribution to a panel presentation at Glocal Evaluation Week

Jun 10, 2025

What is efficiency? How should we evaluate it? How is efficiency related to value? Last week I had the pleasure of joining a panel moderated by Dugan Fraser, with esteemed panelists Megan Kennedy Chouane, Emannuel Jimenez, Sohini Mookherjee, and Sven Harten (see bios at the end) to explore these questions.

Key themes from the panel overall:

The discussion surfaced themes around the challenge of improving the way development organisations look at efficiency. Speakers highlighted a common misconception that equates efficiency with cost minimisation, assuming cheaper is better. In reality, efficiency is about maximising value. Organisations should focus not only on being efficient at producing outputs, but also get better at assessing how efficiently they achieve meaningful outcomes and impacts. This is more than a measurement exercise - it’s evaluation, requiring deliberation and judgement.

Efficiency, the panel agreed, is not a one-size-fits-all concept. Different efficiency questions require tailored methods of evaluation. In particular, there’s a need to develop mixed-method evaluation approaches for dealing with efficiency, recognising that no single type of evidence can capture the full picture. For example, some programs aren’t amenable to cost-benefit analysis (CBA) because they principally produce intangible outcomes. It’s not good enough to simply exclude outcome-efficiency on the basis that it’s too hard. We need multiple strategies to address the criterion.

Efficiency is a comparative concept - it’s evaluated relative to a standard or norm. Ideally, organisations would benchmark their efficiency more often, but this is often hampered by data gaps and fragmentation - e.g., indicators overlap, formats are inconsistent, systems lack interoperability. While investing in robust data systems may seem costly, it could achieve significant downstream savings and improve the quality of future evaluations. Access to reliable cost data is another barrier. While budget information is often available, data on actual expenditure is harder to obtain, limiting the accuracy of efficiency assessments.

The discussion also touched on the efficiency of the evaluation process itself. Sometimes, evaluations are conducted when enough evidence already exists, raising questions about whether these exercises truly provide value for money.

A theme that resonated for me was the need for more nuanced approaches to evaluate efficiency in development work, recognising the complexities of measuring value and impact and using flexible, context-specific methods. These are points I believe I can address!

Dugan asked me:

Julian, please tell us about your professional journey in thinking about efficiency. Where did you start and where are you at with Value for Investment? Who are most of your clients and what kinds of efficiency questions are they asking that they weren’t previously?

My response:

My first real dive into evaluation was working as a health economist. Economic methods of evaluation, like cost-effectiveness, cost-utility, and cost-benefit analysis, are basically all about efficiency: How efficiently an intervention gets outcomes for the resources we put in, and how different interventions compare in terms of their outcome efficiency. It’s not about cost-cutting; it’s about how we can do as much good as possible with the resources we have.

But pretty quickly, I started working on mixed methods evaluations too, and usually they’re looking at more than just efficiency. For example, we might also evaluate how equitable a program is, how sustainable it is, whether people actually want what it’s offering, and so on. And that got me thinking: What if we combine the best of economics and evaluation? Can we get better answers to value-for-money questions?

That question eventually led me to do a PhD, and over a decade of practical work with colleagues, to get to the approach we now call Value for Investment (VfI).

The big idea behind VfI is to spell out, in plain language, what good value looks like, specifically for a program in its context. In concrete terms, that means first describing the program’s value proposition, then defining criteria (aspects of value) and standards (levels of value for the resources invested).

Criteria and standards can be set out in a matrix called a rubric. The rubric gives us a road map to work out what evidence we need, select methods, and make transparent judgements. The evidence might include indicators like efficiency ratios, but not just indicators; usually evidence comes from a mix of methods – qualitative, quantitative, and economic.

Crucially, defining value is a participatory process. It’s about working collaboratively with stakeholders to co-define what matters and make sense of evidence.

What this approach gives us is an evaluation that gets straight to the point and answers the evaluation questions. And an evaluation report that presents not just the evidence but also the working – how we got from the evidence to the judgements.

As to my clients, I work with government agencies, aid organisations, NGOs, and consulting firms. I help them build Value for Investment into their DNA – through training, mentoring, and co-creating what value and efficiency mean in their context.

And the big shift in the questions I’m seeing? Efficiency isn’t just about squeezing more outputs or outcomes from the available budget. We’re asking deeper questions, like:

What does efficiency look like when our outputs and outcomes are complex and always changing – like the efficiency of good policy advice? It turns out that responsiveness to context is more meaningful than a simple ratio like cost-per-output.
What are the preconditions for efficiency? It often includes investing in relationships, trust, and shared goals.
How do we improve equity as efficiently as possible?

Programs don’t exist simply to “be efficient”. Their fundamental purpose is something else, like addressing inequities, or protecting the environment. Being efficient isn’t the why, but it’s part of the how. For example, in some programs, what we really want to do is “improve equity, as efficiently as possible” – to maximise what we can do to improve equity with resources we have. That’s a very different ask from just “being efficient”.

That’s just one example of how defining efficiency in program-specific terms changes what we evaluate, and how we evaluate it. It’s more complex, but also more meaningful. Fundamentally what matters is the quality and value of the program and its impacts. Efficiency can either support or work against that, depending what we focus on. So we shouldn’t think about efficiency in isolation. We need to think about it in combination with the primary objectives of the program.

So, VfI is about helping organisations have richer, more meaningful conversations about what efficiency – and value – actually mean for them.

You can find more about VfI on my website: www.julianking.co.nz. And on Substack. Here’s a relevant example where I’ve recently written about the challenges in working with efficiency ratios.

My key take-home:

Efficiency is important but we need to keep it in context. Don’t let it distract or distort our understanding of what fundamentally matters – the real purpose of the program or investment.

Before you decide on indicators or methods, define the value proposition. Simply describe the value of the program in words: To whom is the program valuable? How is it valuable to them? What critical factors determine how well it creates that value?

Then everything else starts to become clear. It’ll be clear if efficiency is important. It’ll become clear what efficiency means in your program. It’ll open the door to defining meaningful criteria and standards. It provides a negotiated and agreed-upon construct that you can use to evaluate the program. The methods you choose will deliver the right evidence to make a meaningful assessment.

So my key takeaway is: Start by describing the value stakeholders want to see. Then work backwards to define what efficiency means in your context.