Cost-Effectiveness as Practice, Not Verdict: What Funders and Implementers Agreed On at UNGA 2026
Does cost evidence widen the set of options funders look at, or rank a pre-existing list?
That question ran through a breakfast the Dioptra Consortium convened with the Livelihood Impact Fund in New York in September, on the sidelines of the 2026 UN General Assembly. This blog shares key insights that surfaced during the discussion.
Why now
Norad’s opening was that aid budgets have always been stretched across competing purposes; what’s changed is the sense of urgency of our current moment. The aid sector is contracting while need is rising, bringing cost-effectiveness and tradeoffs to the center of the discussion.
Norad also argued public donors should be talking about and demonstrating the zero-sum tradeoffs of aid allocation in public debate, as a way to earn trust. We’d agree, and also add that the discipline of articulating tradeoffs helps foster conversation among people with a variety of priorities.
Lightning presenters showed what this looks like in practice. Every community CARE has worked in has said some version of, “I would like fewer things that deliver better results”. LIF shared why they use cash as the benchmark for everything they do: it’s easy to deliver at scale, and it preserves recipient agency. Anything more complicated has to be worth it.
How to avoid taking cost-effectiveness too far
Presenters and participants also named the risks of applying cost evidence carelessly.
Norad named the first risk early: a heavier focus on cost-effectiveness could push donors and their partners toward short-term, easily-measured things at the expense of long-term value that’s harder to measure. The version of this that came up most in discussion was comparability. A health grant will usually look more cost-effective than an education grant, because health has more short-horizon evidence, while education carries costs up front and demonstrates impact years out.
A second, more insidious risk is mission drift. Drive unit costs down far enough, and you can end up optimizing toward whoever is cheapest to serve, often leaving behind those marginalized or most at-risk. Our view is that this is the fork. Used one way, cost evidence surfaces options that weren’t on the table; used the other, it can entrench inequities.
A third is that an emphasis on cost-effectiveness constrains learning. Transferring a promising intervention from NGO to government delivery (often the route to scale) usually requires a period of iteration before the government can replicate what the NGO achieved. That takes time and money, and can make the ratio look worse in the short run.