CGD Policy Blogs
Development agencies are increasingly interested in making aid more transparent, stakeholder-led, and effective by expanding the use of payment by results (PbR) — rewarding those implementing projects on the basis of results delivered instead of paying for inputs. For payment by results to work, you have to get a lot of things right. It has to be for the right kind of programme targeting the right results, properly measured and rewarded in the right way. These issues, and more, are laid out in Stefan Dercon and Paul Clist’s 12 principles for payment by results (PDF).
Yesterday the UK Ministry of Justice released for the first time the official results of the Peterborough Social Impact Bond – the world’s first-ever SIB and the inspiration for many more SIBs to follow and CGD’s work on Development Impact Bonds.
If one thing was clear at the first High Level Meeting of the Global Partnership for Effective Development Cooperation, it’s that the 1500 people in attendance— representing the governments of developing, emerging and rich countries, multilateral institutions, business, philanthropy, and civil society—were not interested in how aid can be delivered more effectively from rich to poor countries but how the wide and growing range of actors who contribute to development can work together more effectively.
Innovative finance schemes are most likely to fail if the main aim is to bring in more money, and most likely to succeed if the aim is to create new ways of working.
The Multilateral Investment Fund (MIF) of the Inter-American Development Bank is launching a new $5.3 million facility to support Social Impact Bonds in Latin America and the Caribbean, making it the first development finance institution to commit resources to implementing SIBs.