OeNB Financial Literacy Evaluation Series: Theory of change – understanding the link between a program’s design and its goals

Author: Sandra Mauser
Year: 2025

This paper explores the role and relevance of a theory of change in the context of designing, implementing and evaluating financial education interventions. Building on the broader framework of program theory, it examines how a theory of change outlines the logical sequence through which an intervention is expected to lead to desired outcomes. The paper provides a practical guide to developing a theory of change, including its key components – such as the initial situation, assumptions, external factors, inputs, activities, outputs, outcomes and impact. Special attention is given to causal pathways and the assumptions underlying each link in the chain. Furthermore, the paper highlights the importance of acknowledging the probabilistic nature of causality, the role of external influences and the distinction between ex ante planning and ex post verification. A well-developed theory of change helps clarify expectations, supports stakeholder alignment and enhances the rigor of impact evaluations by making the underlying logic and assumptions explicit.

The full report is available as PDF.