Theory of change
An explanation of how a proposal is expected to produce its intended outcomes, setting out the mechanism rather than asserting the result.
It is one of the five elements the Green Book asks for at the rationale and objectives stage, before options are generated. The requirement is to explain how the proposal will produce the intended outcomes.
Writing the mechanism down has a specific value. It names the intermediate steps and the conditions the benefit depends on, and several of those conditions usually turn out to be somebody else’s responsibility. Discovering that during appraisal is considerably cheaper than discovering it in year three.
Sources
HM Treasury, The Green Book, 2026 edition, paragraph 2.11, which lists the theory of change among the five elements of rationale and objectives. Chapter 4 provides the guidance on developing them.
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