A new approach to evaluation of donor projects was described in this paper. Rather than the usual practice of one-off external evaluations, the Swedish International Development Co-operation Agency (SIDA) experimented with Monitoring Teams, who visited projects in Costa Rica and Nicaragua on a regular annual or biannual basis. Each visit was carried out in a standardised manner with emphasis on in-depth discussion with all stakeholders. The new approach proved well suited to the modern style of flexible, broad-based projects in which the donor has little direct involvement. Not only did the Monitoring Teams provide SIDA with an ongoing accurate picture of project performance, but the repeated visits established an iterative cycle of project improvement.