Evaluating financial and development additionality in blended finance operations
This paper clarifies the various definitions of additionality currently in use, and
explores the relationship between additionality and key evaluation terms, such as
impact and causality. It concludes that additionality should be assessed both ex ante
and ex post, and that the presence of additionality will depend on institutional structures
and on how different public and private interests are addressed. The paper further
argues that the relevance of evaluation methods will depend not only on the applied
financial and non-financial instruments but also on the types and dimensions of additionality
to be evaluated. Several examples of different approaches to assessing additionality
The analysis provides a useful foundation for thinking through these issues, and will
be of interest to both evaluation and blended finance actors.
This paper is the second in a series of three working papers from the OECD/DAC EvalNet
Working Group on Evaluating Blended Finance.
Financial and development additionality are not new concepts so existing knowledge bases should be exploited when designing evaluations.
Financial and development additionality comprise a number of potential dimensions; each dimension may require specific evaluation methods.
Most evaluation methods using counterfactual analysis implicitly or explicitly rule out general equilibrium, interference, or interaction effects related to individual treatment assignment. However, blended finance is relevant only in the presence of significant externalities, general equilibrium effects or interaction effects through learning.