MDF’s Theory of Change

MDF contributes to poverty reduction by stimulating sustainable and broad-based economic growth. To achieve this, MDF develops a portfolio of partnerships with private and public sector partners which increase innovation, reform and investment.

To assess its impact on growth and poverty reduction, MDF measures two goal-level indicators: employment and income. Employment is measured as the net additional full-time equivalent jobs created and income as the net additional increase in income. Results are measured, generally, for 2 years beyond the completion of a partnership.

Indicators and Theory of Change

The facility’s goals – increased employment and income for poor people – take longer to achieve than immediate outputs of interventions. These outputs which include innovation, reform and additional private sector investment. Activities are implemented directly by partners and are referred to as interventions. As a result, partners improve their ability to design and deliver important inputs, services and information and to reform enabling rules and regulations. This stimulates pro-poor growth. Results such as additional jobs and income follow these initial outputs and depend on market transactions, business cycles or agricultural seasons.

There are two intermediate steps in between outputs and high-level results. Outcomes refer to the immediate market response to the partner’s improved delivery of goods and services in the sector. The purpose level refers to the effect of these outcomes on individual enterprise performance and competitiveness. This in turn leads to additional jobs and income.

Outcomes and purpose level changes are intervention specific. Outputs and high-level results can be aggregated across sectors, countries and MDF overall.

Diagram of MDF Output and Goal level Indicators

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Timeline and Targets

MDF will develop a growing portfolio of sectors and interventions. Each intervention is designed to stimulate innovation, reform and investment in order to make key markets work better to achieve sustainable and broad-based pro-poor growth. This growth creates additional jobs and income. Results are measured until two years after the end of the programme to capture the results as markets begin working better.

MDF adheres to the Donor Committee for Enterprise Development (DCED) Standards for Results Measurement. The DCED Standard provides a framework for programs to build upon to create a results measurement system which generates credible and attributable results. For more information on the DCED Standards for Results Measurement, please visit: http://www.enterprise-development.org/page/measuring-and-reporting-results.