Working papers etc.

Does blended finance work?

How to improve the evaluation of innovative financing

Many bilateral and multilateral development cooperation providers express rising interest in blended finance approaches as a means of mobilizing additional resources for sustainable development. However, there is a gap between the enthusiasm in pursuing these approaches and the available evidence base on their effectiveness.

DIIS researchers Ole Winckler Andersen and Erik Lundsgaarde have contributed to this OECD working paper outlining several challenges in assessing the value of blended finance. First, the organizational set up for blended finance initiatives is complex. The variety of governmental and private actors involved influences the availability and character of information on the performance of initiatives and points to difficulties in bridging organizational perspectives on evaluation. Second, a lack of a consistent understanding and use of core terms such as additionality limits comparability across assessments. Finally, evaluations of blended finance vary with respect to the evaluation concepts that they incorporate, and the methods applied. This poses another challenge in terms of generating a broader knowledge base on the effectiveness of blended finance that goes beyond the assessment of individual initiatives.

The paper contributes to ongoing discussions convened by the OECD about how monitoring and evaluation practice of blended finance can be improved.

Read more about the discussions convened by the OECD here

DIIS Experts

Ole Winckler Andersen
Sustainable development and governance
Senior Analyst
+45 3049 5320
Cover OECD Working Paper, Blended Finance No 51, February 2019
Blended Finance Evaluation
Governance and Methodological Challenges