The global potential and limitations of impact bonds
Impact bonds, also known as Pay for Success contracts in the United States, have leveraged over $200 million in upfront private capital for social services worldwide over the last six years, and by 2020 the market is expected to triple. Brookings experts have published two reports analyzing the market, the first of which is a comprehensive review of the global impact bond market and the second of which examines applications to Early Childhood Development programs.
On February 29, the Global Economy and Development program at Brookings hosted a discussion on the scope for social and development impact bonds to address social challenges globally. Sessions reflected on the types of challenges for which these new financing modalities are best suited, and the factors critical for their success. Sir Ronald Cohen, chairman of the Global Social Impact Investment Steering Group, provided keynote remarks, followed by presentations from Emily Gustafsson-Wright, fellow at the Center for Universal Education at Brookings and lead author of both reports on impact bonds. The event included two panel discussions and a networking lunch.
“The 21st century has revalued these small geographies. That’s what the 21st century demands,” Katz said, noting that these days, “[w]e aren’t innovating in isolated business parks” in the suburbs.