Effective character level (ECL) is a way to compensate for certain classes having a harder time at low levels in Neverwinter Nights (especially in single player). This is implemented in NWN by considering a killed monster to have a higher challenge rating (CR) based on the class levels of the killer. With the expansion packs, NWN abandoned the use of ECL; thus it is only used in the original campaign and in modules made with a Toolset that does not have the expansions. For a multiclassed character, the bonus to CR for the monsters killed is the sum of the bonus for each class (by its class level).
The original campaign did not factor in classes going beyond 20 levels (as there was a level 20 cap when it was released). However, playing this campaign (or a module made with a Toolset without the expansion packs) with a character with classes beyond level 20 (requires the Hordes of the Underdark expansion) will cause that class to contribute a CR bonus equal to the entire class level. Thus a wizard 5/cleric 5/sorcerer 30 would generate a CR bonus of 3 + 3 + 30 = 36, and thus would get as much experience points for killing a creature with a challenge rating of 4 as killing one with a challenge rating of 40 (as 40 is the maximum CR for XP calculation).
Pen and paper comparison Edit
In pen and paper D&D, ECL is used to compensate for the traits of the more powerful races. The average drow, for example, has several powerful abilities that make her more powerful than a human, and so would always be considered to be two levels higher than the sum of her class levels. Thus a drow character would gain levels slower than a human, balancing out the racial advantages. BioWare did not implement this racial ECL presumably because they implemented neither subraces nor monster races, which are the main sources of racial ECL.
Some modules have scripted various systems to implement subraces, and some of these include pen-and-paper style ECL. One such system utilizes racial hit dice, but this solution has the drawback of using one of the character's three potential classes for these racial hit dice, limiting characters with racial hit dice to two "real" classes.