Statistics in development cooperation - statistics in the European Commission project cycle

This article is part of a set of background articles providing an ‘outline of knowledge’ of international statistical cooperation between the European Union (EU) and developing countries, for non-statisticians needing to deal with statistics in development programmes and projects. The outline serves as an entry point and introduction to the much more detailed Eurostat publication 'Guide to statistics in European Commission development cooperation', downloadable in PDF format in English, French and Spanish (further down referred to as 'the Guide').

Many developing countries have weak statistical systems and mechanisms for measuring results. Good, reliable statistics are essential for measuring progress in reaching development goals and provide essential information about the effectiveness of policies and programmes. They help governments improve their policies and to be transparent and accountable about the delivery of development results. Reliable statistics are a key element towards better measurement, monitoring and management of the results of development assistance.

Statistics are instrumental in achieving policy goals. The availability of good quality statistics is a pre-condition for proper strategic analysis and for programming and design of concrete interventions. The analysis should address the state of the statistics system, its strengths and weaknesses and remedial and quality improving actions required. Actions in support of statistics should be provided within the frame of the National Strategy for the Development of Statistics, which should be compatible with national development plans or poverty reduction strategies.

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Statistics do matter - statistics, indicators and the European Commission project cycle

Indicators and statistics are of key importance to focus EU assistance better.

Eurostat's Guide:

If you think that statistics are important but bread is more urgent, please ask yourself on what information you base your answers to these questions: 'How much bread?' and 'Where is the bread needed?'

The European Consensus for Development:

“15. The EU and developing countries share responsibility and accountability for their joint efforts in partnership. The EU will support partner countries' poverty reduction, development and reform strategies, which focus on the MDGs, and will align with partner countries' systems and procedures. Progress indicators and regular evaluation of assistance are of key importance to better focus EU assistance.”

What is an indicator?

EuropeAid: Policy steering - The role and use of performance measurement indicators:

“An indicator is a (generally statistical, but also potentially logical) order of magnitude linked naturally or arbitrarily to the measurement of policy activities (in the broadest sense of governance). Indicators are characterised primarily by the fact that they provide information in summary form, are communicable and are subject to relative consensus.

...

An indicator is generally defined by its function (what it measures), the means of obtaining it (formula and necessary data), its quality (the extent to which it can be interpreted and monitored over time) and the limits on its use (what it does not measure or measures poorly).”

Typology of indicators according to what the indicator is measuring:

Input indicators	Output indicators	Outcome indicators	Impact indicators
They measure the financial resources provided and the administrative and regulatory measures taken	They measure the immediate and concrete consequences of the resources used and measures taken	They measure the results at the level of beneficiaries	They measure the consequences of the outcomes in terms of wider objectives
Their definition can be treated as very broad, covering in some cases what are often called "process indicators"	Their definition covers those goods and services "produced" or "provided" by the public sector with the inputs	Their definition covers the outcomes (or results) from the use and satisfaction of the goods and services produced by the public sector - it is where supply comes face-to-face with demand	Their definition covers the wider effects of the outcomes but might be also higher level impacts, related to broader objectives
Examples: Share of the budget devoted to education expenditure, abolition of compulsory school uniforms	Examples: Number of schools built, number of teachers trained	Examples: school enrolment, percentage of girls among the children entering in first year of primary school	Examples: Literacy rates, unemployment rates

Typology of indicators by the use made of them

Indicators can also be classified by the use that is made of them in the European Commission programme cycle.

Group A indicators	Group B indicators	Group C indicators
They monitor overall progress at country or regional level	They monitor overall progress at sector level	They monitor aid effectiveness
They are used to describe events at country or regional level. They are useful for policy making. They depict the context of a sector or to measure its changes over time.	They monitor what is happening at programme/ project level.They are useful to evaluate programmes/ projects. They can usually be found in a logical framework for a programme/ project and in budget support programmes. For programmes/ projects they will often be sector specific and may be tailored to the individual action.	They are used for reporting and accountability of countries and donors with respect to their commitments. In principle, the MDG indicators could be seen as part of this group but in practice they cannot be used to hold countries or donors accountable.

Guide examples and practical information

B.3.2 Typology of development indicators

Statistics before the start of the cycle of operations

The allocation of funds made available by the European Commission is based on a number of indicators.

This principle is set up in the legal instruments that constitute the basis for the cooperation between the European Commission and its partner countries.

Both the Cotonou Agreement and the Development Cooperation Instrument make explicit reference to the calculation of the multi-annual indicative allocations based on need and performance criteria.

The European Consensus for Development also states a European Commission commitment to decide on the resources allocated to each country based on objective and transparent criteria.

The allocation of funds and the related indicators

Agenda for Change	Country needs: assessed using several indicators, taking into account economic and social/human development trends and the growth path, as well as vulnerability and fragility indicators; Capacities: assessed according to a country’s ability to generate sufficient financial resources (domestic resources) and its access to other sources of finance; Country commitments and performance: positive account should be taken of a country’s investment in education, health and social protection, its progress on the environment, democracy and good governance, and the soundness of its economic and fiscal policies, including financial management; Potential EU impact: assessed through two cross-cutting objectives: Increasing the extent to which EU cooperation could promote and support political, economic, social and environmental policy reforms in partner countries; Increasing the leveraging effect that EU aid could have on other sources of finance for development, in particular private investment.
Cotonou Agreement	The indicative resource allocation among ACP countries shall be based on standard, objective and transparent needs and performance criteria. needs shall be assessed on the basis of criteria pertaining to per capita income, population size, social indicators and level of indebtedness and vulnerability to exogenous shocks. performance shall be assessed on the basis of criteria pertaining to governance, progress in implementing institutional reforms, country performance in the use of resources, effective implementation of current operations, poverty alleviation or reduction, progress towards achieving the Millennium Development Goals, sustainable development measures and macroeconomic and sectoral policy performance.
Development Cooperation Instrument	The Commission shall determine the multiannual indicative allocations within each geographic programme using standard, objective and transparent resource allocation criteria, based on the needs and performance of the partner country or region concerned and bearing in mind the particular difficulties faced by countries or regions in crisis, conflict or disaster prone, alongside the specificity of the different programmes. The needs criteria include population, income per capita and the extent of poverty, income distribution and the level of social development. The performance criteria include political, economic and social progress, progress in good governance and the effective use of aid, and in particular the way a country uses scarce resources for development, beginning with its own resources.
European Consensus on Development	The use of standard, objective and transparent resource allocation criteria based on needs and performance will guide the allocation of resources and a review of their subsequent use. The needs criteria include population, income per capita and the extent of poverty, income distribution and the level of social development; The performance criteria include political, economic and social progress, progress in good governance and the effective use of aid, and how a country uses scarce resources for development.