In a nutshell, RIE is an evaluation approach that uses a control or comparison group to evaluate whether an intervention works or not. But let’s be more specific:
RIE comprises a set of different evaluation designs (experimental and quasi-experimental designs). It is an approach that allows the causal attribution of a change in an outcome of interest, for example household income, to a specific intervention, for example microloans. To do so, it is necessary to compare what actually happened with what would have happened without the intervention, the so-called “counterfactual situation”.
In our example, the counterfactual situation would be to compare the income of households that received a microloan intervention to what the income of the very same households would have been if they had not received the microloan. Without such a counterfactual, we cannot say with certainty, that it was our intervention that caused the impact and not some other external factors. We might not be certain that the household income changed due to the microloans and not due to lower taxes or better infrastructure that happened at the same time like the microloan.
Of course, it is logically impossible to observe the same households receiving and not receiving the intervention. This is why this counterfactual situation is approximated constructing a so called “control or comparison group”. That group is constructed in a way that it is as similar to the intervention group as possible. To construct such a group experimental and quasi-experimental designs come into play.