Measuring financial market facilitation: why the theory of change is king

This is the second of a four-part serialisation of the full Impact Oriented Measurement (IOM) guidance paper.

In the first serialisation, the principle objectives of IOM and the background to its development was provided. The first, second and third chapters were also discussed.

This second serialisation (Chapter 4 of the full IOM guidance paper) draws attention to the Theory of Change (ToC), a critical tool in the IOM system.

In particular, this Chapter:

  • Discusses the definitions of, purposes of and relationships between ToCs, results chains and logframes. It clearly explains what each of these tools are, what they are for and how they can be best developed for market facilitation programmes. It also demonstrates how project-level results chains should ‘nest’ within programme-level ToCs. In doing so, this Chapter helps to de-mystify the application of these tools within a programme’s overall approach to IOM.
  • Discusses the identification of impact measurement questions. The Chapter shows that ToCs and results chains help to identify impact measurement questions. It states that: “taking time to think carefully about impact measurement questions…will help focus both measurement and research activities.” This begins the process of monitoring through indicator selection and data collection.
  • Introduces ‘bottom-up’ and ‘top-down’ measurement. Readers learn that ‘bottom-up’ measurement involves the monitoring of the impact of individual interventions, while ‘top -down’ measurement involves the monitoring of financial market performance and socio-economic landscape (including poverty levels) as a whole. By triangulating evidence from the two, it is possible to more clearly discern/attribute the combined impact of a market facilitator’s interventions.

In the next installment – the third of the four-part serialisation – IOM will explore how to measure changes (including systemic changes at the market-level) resulting from FSD interventions and how to determine the causes of such changes.