Development Impact Bonds

What if
you could
invest in
development?

 

 

 

Development Impact Bonds are an outgrowth of Social Impact Bonds, which Social Finance pioneered in 2010.  Social Impact Bonds aim to improve the social outcomes of public services by making payment for those services conditional on achieving independently measurable outcomes.  The services are initially financed by risk-capital, which the public sector repays with a premium if and only if agreed outcomes are achieved.  This structure encourages flexibility and adaptability as the investors and their agents have an incentive to systematically improve implementation as data on successes and failures flows in.  Development Impact Bonds have a similar structure – as the New York Times put it recently:

“The Development Impact Bond is almost exactly the same as the Social Impact Bond, the hottest idea in social-service provision (an oxymoron if ever there was one) of the last few years. One difference is who repays investors if the program succeeds. With a social impact bond, the government does. With a development bond, payment would fall to international donors such as foundations or government agencies such as Britain’s Department for International Development or the U.S. Agency for International Development.”

A consultation report on Development Impact Bonds was launched at an event in London in June 2013, and a video of the launch can be seen here.  On October 7, 2013 in New York, the Center for Global Development and Social Finance launched the final Development Impact Bonds Working Group Report. Click here to download. 

A consultation report was launched at an event in London in June 2013, and a video of the launch can be seen hereOn October 7 in New York, CGD and Social Finance launched the final Development Impact Bonds Working Group Report. Click here to download. 

More information can be found in the resources below:

Resources