Development Impact Bonds
Development Impact Bonds (DIB) are outcome-based financial products derived from Social impact bonds. They provide new sources of financing from private investors to improve development outcomes. DIBs shift incentives and accountability to results, and transfer performance risks to the private sector, which increases efficiency of programme implementation. With the challenges of how AID has worked to date and the financial crisis pressure on budget, there has been a move towards the private sector as the engine for
development. DIBs have the potential to introducing private sector actors who may be better-positioned than the public sector to take on the risks associated with innovation, and improve the effectiveness of traditional donor-funded projects by shifting the focus onto implementation quality and the delivery of successful results. DIBs could represent an additional mechanism for outcomes-based approaches which donor agencies are exploring as a way to respond to these challenges and act as the medium for future public private partnerships.
Bring together private investors, non-profit and private sector service delivery organizations, governments and donors, DIBs could facilitate the delivery of results similar to those that the Social Impact Bonds are responding to. They could provide upfront funding for development programs by socially motivated private investors, who are remunerated by donors or host-country governments-and earn a return-if evidence shows that programs achieve pre-agreed outcomes. If interventions fail, investors lose some or all of their investment.
The DIB Working Group has been exploring the challenges and benefits of this new funding model for development, and the context in which it could be applied. This has included six case studies that are outlined in the groups final report below. The report includes technical considerations for the implementation of DIBs, and recomendations for how all actors involved can help to develop DIB pilots and the emergance of a market for this kind of approach.
International development is now looking to businesses as the engine of international development. Business for development is looking past philanthropy and beyond social responsibility CSR to an inclusive business model approach. The inclusive business contrasts with isolated corporate social responsibility CSR as it is a business strategy for increasing the incomes of the poorest and most marginalised groups and promoting growth by including them in global value chains.
The inclusive business model can be included in businesses corporate social responsibility strategies CSR, however goes deeper that corporate social responsibility by including the poor in the value chains of the organisation. It is about utilising the poor as employees, producers and consumers, there engaging with the poor stimulates growth, income and profit. To this end, CARLA International offers consultative services for organisations with an interest in corporate social responsibility, in order that they can engage with communities that they impact as producers, employees and consumers. As experts in international development, we can provide international development training courses and international development workshops for employees and management, in order to facilitate a greater understanding of the interrelatedness of their business, international development and affected communities.
• BBC World Service Interview with Owen Barder
• Blog: Growing interest in Development Bonds
• Blog: What if you could Invest in Development?
• Blog: Why Development Impact Bonds?
• DIB Working Group Briefing Note
• DIB Working Group Meeting 1 Presentation
• DIB Working Group Meeting 2 Presentation
• Global Prosperity Wonkcast: Development Impact Bonds
• Investing in Social Outcomes: Development Impact Bonds - Full Report
• Webinar: Development Impact Bonds: What Next?
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