Better measurement of progress towards Sustainable Development Goal 4 (SDG 4), particularly to measure learning, has been hard to coordinate. There are many partners involved in a task that is large and technically complicated, with few measurement models in place.
The UNESCO Institute for Statistics (UIS) has managed to advance the measurement agenda, despite a lack of sufficient funding. A social impact bond (SIB) could be an innovative way to speed things up.
For those who are not familiar with SIBs: they enable to make up-front socially-important investments today that will have benefits in the future. The risks for the taxpayer are small as the SIB pays off only if and when the investment succeeds – according to pre-determined criteria.
How an SIB would work
Experts or an expert agency act as a third-party intermediary between the investors, the institution using the funds (typically a non-profit agency) and the public institution that ultimately repays the investors. A framework outlines all stakeholders’ obligations along with the criteria for success and is then used to monitor the process.
The closest analogy would be the use of vaccine bonds to finance immunization in the health sector. The Global Alliance for Vaccines and Immunization (Gavi) and its innovative finance partners “have raised over US$6.1 billion from investors, making large volumes of funds immediately available for Gavi programs. This saves more lives faster.”