A literature review is an overview of the current state of knowledge with regards to the topic of the impact evaluation (mechanisms and/or intervention to be studied). It places the impact evaluation within the existing literature, emphasizing what it will contribute / how it will advance the field.
A summary of the findings from the literature review should be included in the Impact Evaluation Concept Note as well as the final paper.
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This article is part of the topic Impact Evaluation Design
Oxfam Brief on conducting effective literature reviews: "Reviewing the Existing Literature"