Innovative scorecard system helps to better allocate poverty program investments

BY MANUEL A. HERNANDEZ AND SARA GUSTAFSON

Sustainable Development Goal 1 calls for the end of extreme poverty by 2030. This ambitious target requires a strong global commitment to and investment in evidence-based policies and programs. On the front lines of this effort are local, regional, and international development funds that provide assistance—typically project grants or loans—to smallholders to get out of poverty. But organizations, donors, and policy makers deciding which of these projects to back often face a difficult tradeoff: Shoulder more financial risk for a greater impact on poverty, or opt for a low-risk, more sustainable approach with less impact.

For several years, IFPRI researchers have been working on an innovative scorecard system to help reduce such tradeoffs. The system combines risk scoring with poverty scoring; examining these two factors together can help lenders and policy makers better identify programs that hit the sweet spot: both financially sustainable and effective.

Photo credit: USAID