Evaluation of governance: a study of the Government of India's outcome budget

In 2005, the Government of India (GoI) launched an apparently excellent initiative - the Outcome Budget (OB) - with the objective of changing the culture of measuring performance in terms of the amount of money spent against the budgeted allocations, to one of measuring performance in terms of the delivery of the outcomes that people are concerned with. This paper argues that the OB has failed. This has happened because the assumptions of the theory of change underlying the OB have not been satisfied. The failure of the OB has extremely important lessons for the Independent Evaluation Office (IEO), which the GoI has decided to set up. The paper articulates the theory of change underlying the IEO. This theory assumes that policy-makers in India currently demand rigorous impact evaluations of public interventions and will continue to demand such evaluations in future, not because they have to comply with any requirement but because they really want to know the answers to the impact evaluation questions of 'what works, under what conditions does it work, for whom, what part of a given intervention works, and for how much?', so that they may draw appropriate lessons from these answers and use these lessons while designing and implementing public interventions in future. However, given Indian public officials' current culture, the IEO may not make any visible difference in development effectiveness in India.