Are Impact Bonds and Outcome Funds a Solution to the Global Learning Crisis?

Monday, June 25, 2018

By Emily Gustafsson-Wright and Izzy Boggild-Jones

Utilizing outcome-based schemes for education has the potential to encourage spending on what is important, as well as improve execution in delivery. Social and development impact bonds are a form of outcome-based financing which harnesses private capital to leverage donor or public funding to spend on interventions that work. A related and relatively new phenomenon, Outcome Funds for Education, may further help address issues of fragmentation and inequities in funding. Given the nascence of these tools, there is much to be learned and there are some tough challenges to be reckoned with.

According to the Education Commission, at current trends, more than 1.5 billion adults—comparable to nearly the entire population of China—will have no more than primary education by 2030. Compounding the problem, half of the world’s jobs—around 2 billion—are expected to disappear due to automation by 2030. This is a veritable crisis, which will require more funding as well as more effective and more efficient spending.

Photo courtesy of Sudipto Sarkar.

Source: Brookings (link opens in a new window)

development finance, global development, impact bonds, impact investing