Cost-effectiveness Analysis: A Useful Tool for the Assessment and Evaluation of Relief Operations?

In a context of stagnating levels of official development assistance, bilateral expenditures on emergency assistance are rising dramatically, leading to increased scrutiny by evaluation departments of the way in which such assistance is provided. As a result, cost-effectiveness analysis of relief operations is now being accorded greater attention.

Cost-effectiveness analysis is not the same as cost-benefit analysis. It does not entail valuation of human life or quantification of human suffering, and is of use in those situations where benefits cannot be reasonably measured in monetary terms. Cost-effectiveness analysis is, therefore, a potentially valuable tool for the evaluation of relief operations, where the aim is to save lives and reduce suffering.

It is essential that the relationship between costs and performance of relief activities be fully explored and understood: in a world where numerous competing demands are being made upon finite aid resources, the inefficient use of funds in one operation may reduce the availability of funds for other operations where needs are equally critical.

Formal cost-effectiveness analysis of relief operations can, however, be fraught with difficulties, both practical and methodological. Such difficulties arise from the fact that relief operations characteristically take place in complex and rapidly changing environments, and involve a large number of donors, UN agencies and NGOs undertaking a wide range of activities. As a result, the particular effects of any one intervention can be impossible to isolate. In many cases, cost-efficiency analysis, which investigates the process of aid delivery rather than the outcome, may be a more appropriate tool.

To facilitate evaluations of relief assistance, those involved need to revise the way they collect data, and prepare reports. There needs to be less emphasis on strictly financial reporting and more on reporting in relation to activity. This would considerably enhance the usefulness of the evaluation process.

However, while attention to efficiency and cost-effectiveness analysis is important, it should not detract from issues of impact and overall suitability of a relief operation. Evaluations should include analysis of a political and anthropological nature.