The Center for Global Development, in partnership with the UK-based organization Social Finance, has formed a working group to explore a new development financing mechanism, Development Impact Bonds (DIBs). DIBs would provide upfront funding for development programs by private investors, who would be remunerated by donors or host-country governments—and earn a return—if evidence shows that programs achieve pre-agreed outcomes.
The idea is based on the model of Social Impact Bonds, recently piloted in the UK as a way to shift incentives and accountability to results, transfer performance risk to the private sector, and increase efficiency in program implementation. The Development Impact Bonds Working Group will investigate whether a similar model can be used to improve international development outcomes and will produce recommendations for the design of Development Impact Bonds. To learn more, visit the Development Impact Bonds Working Group page.