(Title: Active Labor Market Policy and its Evaluation: The Current State of Affairs) Despite the considerable effort and the large financial expenditures spent on measures of Active Labor Market Policy in Germany, relatively little is known about their actual impact. To the contrary, past evaluation efforts typically failed to construct a credible counterfactual situation - a precise statement of what would have happened in the absence of the policy intervention. This paper argues that Germany lags clearly behind the current evaluation practice of other advanced economies, and in information about the efficacy of its policies. The paper discusses the methodological problems surrounding the evaluation of policy interventions and possible empirical strategies for their solution. The available scientific evidence on the impact of labor market programs is surveyed briefly, and several lessons are extracted on the design of future programs and their evaluation.