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Feb 29_Impact Bonds for ECD_Presentation 2

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Emily Gustafsson-Wright

on 8 December 2016

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Transcript of Feb 29_Impact Bonds for ECD_Presentation 2

1. Why impact bonds for ECD?
Impact Bonds could help tackle constraints in ECD:
Impact bonds could...
Help provide upfront capital, addressing liquidity constraints
Not necessarily provide additional funding, as the outcome funder ends up paying

However, private capital COULD leverage public capital
Impact bonds could...
Leading to performance management and M&E
Impact bonds could...
Facilitate data collection on what works
Allow flexibility in service delivery for adaptive learning
Impact bonds could...
Allow the outcome funder to connect preventive programs with long-term outcomes and potential cost savings
Demonstrate value through private sector engagement
Change the focus to outcomes
Creating accountability for government programs
Allowing for innovative combinations of services to maximize impact
Motivate politicians through guaranteed value for money
There are currently 9 SIBs that serve young children globally...
There is a pressing need to improve access to quality ECD services
Parental training in stimulation increased earnings by
in Jamaica and reduced crime by
Improving maternal health reduced low birth weight by
in Argentina
Preschool education improved cognitive development by
in Mozambique
...and at least 3 impact bonds in the works for ECD in low and middle-income countries.
Many ECD services are provided by non-state actors, which could allow greater flexibility
ECD interventions deliver meaningful outcomes and prevent higher costs down the road
Impact bonds provide upfront capital for preventive services

...often to
non-state providers...

...and tie payments to outcomes
There is some evidence that tying payments to outcomes in ECD improves the quality of services
10-20% of pregnant women in developing countries are malnourished

165 million children are chronically malnourished worldwide

17% of children in low-income countries are enrolled in pre-primary
Some ECD services have complex inputs and relatively simple outcomes
Impact bonds are particularly well-suited to the sector, in theory
Outcome metrics

Extrinsic value - increased lifelong earnings
Measurable within a time-frame that is appealing to investors and outcome funders
Low cost and capacity to implement
Accuracy (resistant to manipulation)
Sufficient evidence the outcome can be achieved through available interventions
...and attributed to the intervention
Capture the range of potential impact or cost avoidance
Intrinsic value - reduced IMR
Foster innovation and experimentation in delivery
What outcome measurement tools adequately capture the quality of the service and avoid perverse incentives?

What intermediate outcomes are correlated with later-life outcomes?

What are the costs of interventions? What are the opportunity costs of not implementing the interventions? How do we price outcomes?

4. Critical issues going forward for IBs for ECD
2. The landscape of impact bonds for ECD
3. Key considerations for IBs for ECD
ECD interventions have the potential to dramatically improve outcomes
ECD-specific challenges
Lack of political urgency

Wrong pocket problem

Defining outcomes
Lack of financing
Spending on pre-primary education for LICs and LMICs will need to
increase six-fold
between 2012 and 2030.

The funding gap for RMNCAH was
$33.3 billion
in 2015 in high burden, low and lower-middle income countries. 

Low quality and capacity
Gaps in knowledge
unique ECD programs have been evaluated for their effect on later-life outcomes
Insufficient political support
Pre-primary spending was only
of budgets in low income countries and
in lower middle income countries in 2012.
Share of time spent on various preschool classroom activities
Sources: UNESCO (2015). Pricing the right to education: The cost of reaching new targets by 2030. GMR Policy Paper 18. July 2015. Paris: UNESCO; World Bank (2015). The Global Financing Facility in Support of Every Woman Every Child. Washington D.C.: World Bank.
Source: Denboba, A. D., L. Elder, J. Lombardi, L. Rawlings, R. Sayre, Q. Wodon (2014). "Stepping up early childhood development: investing in young children for high returns." World Bank.
Early Childhood Development (ECD)
Source: Tanner, J., T. Candland, and W. Odden. (2015). “Later Impacts of Early Childhood Interventions: A Systematic Review." Independent Evaluation Group of the World Bank Group.
Source: Steer, L. and K. Smith (2015). "Financing Education Opportunities for Global Action." The Brookings Institution.
Source: Berlinski, S. and N. Schady (eds.) (2015). The Early Years: Child Well-Being and the Role of Public Policy. Inter-American Development Bank.
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