The aim of this paper is to understand the ‘theory of change’ underlying interventions of development agencies and donors to support vocational education and training (VET) and skills development, in low- and middle-income countries (LMICs). The idea of a ‘theory of change’ is increasingly central to evaluative work, and offers a way of considering the policy/research interface. The first aim is to understand the extent to which, and ways in which, donors and development agencies support vocationalizing education and favour VET as an educational intervention. The second is to interrogate what problem they think VET is the answer to and how they believe that VET solves that problem (their theory of change). The term VET here is used to include formal vocational education and training programmes as well as other skills and work-readiness interventions.

In the research literature, skills and vocational education interventions seem to be under-theorized in low- and middle-income countries. There are two main theoretical approaches in the literature. The first starts from individuals, and is dominated by human capital theory. Human capital theory assumes that providing individuals with knowledge and skills makes them more productive, helping them to secure or improve their employment status or income generation capacity, and in turn making firms and organizations more productive, leading to increasing national prosperity and well-being (Becker 1993; Schultz 1961). The second approach is relational: it looks at skill formation as a factor in complex economic and social systems which shape and are shaped by the nature of skills (Busemeyer and Trampusch 2012; Martin 2017; Oliver, Yu, and Buchanan 2019; Thelen 2004). The most well-developed mid-level theory in this regard is Varieties of Capitalism. This theory has been influential because it showed that interactions between firms in five key spheres (industrial relations, skills, corporate governance, inter-firm relations, and employee relations) tend to cluster in patterns of institutional complementarities, which lead to and depend on either, on the one hand, strong apprenticeship-based vocational education systems or, on the other hand, weak vocational education systems and strong mass higher education systems (Hall and Soskice 2001). This was the starting point of a body of research looking systemically at skill formation systems. But Varieties of Capitalism is of little value in understanding LMICs. Its firm-centric starting point reduces its purchase in contexts of high levels of informality and unemployment and low levels of industrialization; and its focus on national patterns is very limited for countries that have less control over their national economies. There are attempts to understand skill formation systems in LMICs (Ashton et al. 2002; Maurer 2012; Sancak 2022; Bogliaccini and Madariaga 2020; Allais 2022), but there are no well-developed alternative relational theories for the nature of skill formation in these countries. This absence appears to lead to a default reversion to an implicit HCT approach in the skills interventions in LMICs.

Both of these theoretical approaches intersect with debates about development: here a key shift has been away from a focus on economic growth only to a focus on a range of social development indicators or a focus on what individuals value and therefore aspire to do (capabilities literature). But shift in how we measure and value development does not necessarily imply different paths to development, or indeed engaging with debates about paths to development. And at times they have led to palliative approaches to development which focus on a set of outcomes without any engagement with how change takes place and the imperative to address the nature and structure of economies (Reinert 2006).

We reviewed publicly available strategies and reports focused on VET, skills, and education strategies from a selection of organizations: development banks, country donor and development organizations, multilateral organizations, and philanthropic organizations and foundations. We then conducted a small, targeted set of key informant interviews, with 10 individuals, from three Country Development Partners, one UN agency, three Development Banks, and one Foundation. We focused on understanding the location of education in general and skills interventions in specific in the broader structure and work of the agency or organization in question; how important VET is in the broader areas of work; the relative focus on vocational versus general education, including interest in vocationalizing the secondary school curriculum; what problem they are trying to solve and how they see the intervention as solving that problem. We probed relationships between formal and informal work, and youth unemployment. As part of attempting to distil theories of change from descriptions of policies, approaches, and interventions, we also considered, where possible, what is evaluated and how evaluation takes place, or how success is understood. For document analysis we focused on strategic documents containing at least implicit theories of change that address VET and found that these typically reference youth and focus on new entrants. We also looked for documents related to worker education and education in general with a view to understanding how these addressed VET, and the extent to which the theories of change or strategies that are in place explain how these different components of the education and training system are described in relation to each other and their interconnected and inter-dependent nature.

We found that while some organizations have explicit theories of change—and generally multiple theories of change addressing different aspects of the overarching system—many are currently in the process of developing these theories of change. A few state that they do not have a theory of change but rather focus on the development of targets for different components of the system. The main problem which organizations seek to address through VET is consistently identified in the strategy documents and our interviews is that of youth un- and underemployment, although a few organizations have a larger number of social and economic goals. There are then a set of assumptions made about the main problem, a key one being that skills deficits are a substantial cause of youth un- and underemployment. Flowing from this is the assumption that VET is an important area to intervene in order to solve the specific problem of the perceived skills mismatch (between supply and demand of skills), but also the recognition that VET is currently not able to solve this problem because it is dysfunctional in a range of ways. This leads to a range of interventions focused on fixing VET. We discuss four main theories of change present in the VET space, and how they are operationalized or not. We also discuss a number of tensions that emerge when reviewing the assumptions within these different theories of changes more closely, relating to which problems VET can assist with and the ways in which VET will assist to solve for the main problem of youth unemployment.

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