Government, business, and civil society leaders are exploring how they can use Development Impact Bonds to catalyze development, according to UK Secretary of State for International Development Justine Greening.
Development is a risky, complex business. So it’s not surprising that development experts sometimes question why private investors would choose to invest in Development Impact Bonds (DIBs), a new model for funding and designing programs that address such seemingly unprofitable problems like disease burden or poor education outcomes.
Foundations are not primarily interested in what they can “give” to contribute to development, but how they can make targeted investments and form effective partnerships with other development actors, as CGD in Europe colleagues and I heard last week at the meetings of the OECD Global Network of Foundations Working for Development, or netFWD.
The Development Impact Bond Working Group convened by CGD and Social Finance UK recently launched its final report, Investing in Social Outcomes: Development Impact Bonds, which has been well received by the diverse groups of actors who could make DIBs happen, including donor agencies, impact investors, foundations, and civil society organizations.
Duncan Green recently took on the subject of Development Impact Bonds and impact investing in this blog post, and raised a few reasons for skepticism. As he anticipated, we didn’t really agree with the concerns that came up and wanted to explain why.
The UK Ministry of Justice has released interim results for the Peterborough Prison Social Impact Bond: reconviction of former prisoners in the pilot has been reduced by 6% over two years, compared to a national increase of 16% over the same period.