Driving Impact: Foundations of Development Effectiveness Reforms at the IDB

The institutional strategy of the IDB, IDB Invest, and IDB Lab, known as IDBStrategy, centers on achieving scale and impact. This paper presents the theoretical and empirical foundations of the Impact Orientation Reform for the IDB, one of the 17 reforms outlined in IDBStrategy. First, we provide a broad overview of recent performance management innovations that set the stage for the Impact Orientation Reform, as well as key contextual changes that have shaped the IDB's impact orientation. Then, we identify challenges the IDB faced under previous development effectiveness initiatives. The core of this paper focuses on the three main elements of the Impact Orientation Reform: (i) a culture of effectiveness, (ii) targeting final results through evidence-based decisions and learning, and (iii) a commitment to improving client effectiveness. This study dives into each element, discusses its theoretical and empirical underpinnings in the literature, and ties each one to the IDB's challenges, as identified in this study's assessment. The study provides examples of how specific processes and tools of the IDBs Impact Orientation Reform reflect these elements. Finally, we present potential challenges that could arise when implementing this reform.