Evaluating the World's First Development Impact Bond in the Education Sector

Pancholi, Tarini; (2022)

The aim of this dissertation is to evaluate Development Impact Bonds (DIBs), a subset of Impact Bonds, through a case study of Educate Girls DIB (EGDIB). The study takes into account the effect of EGDIB on its beneficiaries, its service providing social enterprise and the overall sectorial ecosystem. The research explores the question, “What is the impact of development impact bonds (DIBs) on its various actors?”. The research presents the complexities and challenges involved during the design and implementation of this DIB as an ‘all private parties’ transaction. The DIB surpassed all its target outcomes as the service provider adapted their operations based on the data-finding throughout the programme. This research concludes that beyond the complexities of these financialised transactions, there lies an opportunity for the service provider to experiment with new methods and resources that focus on outcomes. If service providers can sustain and scale the leanings from the program, DIBs can open doors for flexible funding avenues. On the other hand, the direct impact on beneficiaries were striking at the end of the programme but could not last post-completion of the DIB. Thus, the time-bound nature of these contracts cannot guarantee its benefits on beneficiaries in the long-term even when targeted results are achieved as per the pre-determined criteria. In the overall development ecosystem, DIBs should be perceived as a Research and Development (R&D) tool rather than an absolute intervention because their high complexities and cost create entry-barriers at multiple fronts.
 

Read the working paper