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27 Apr 2023

Event highlights: CIES Panel - Impact Bonds for Education: Does innovation in financing address equity and quality challenges?

Sunday 19 February 2023

14:45 – 16:15 (EST/Washington D.C.)

Chair: Nicholas Burnett

Panellists: Arushi Terway, Marina Dreux Frotte, Anaka Harish Ganesh, Georgia Thorne, Cynthia Rayner & Archana Mehendale


Impact bonds, a financial innovation that aims to address social and development issues through private investment, are increasingly gaining prominence as a tool for financing education. However, as with any new financial instrument, there are both benefits and challenges associated with impact bonds. At a recent panel, experts discussed the existing evidence on the use of impact bonds in education and engaged the audience in examining their own assumptions about the topic.

On 19 February 2023, NORRAG and its partners from the Bertha Centre at the University of Cape Town- Graduate School of Business and the Centre of Excellence in Teacher Education at Tata Institute of Social Sciences presented the highlighted session “Impact Bonds for Education: Does innovation in financing address equity and quality challenges?”. Chaired by Nicholas Burnett (Results for Development), this panel presented the Innovative Financing for Education To Leave No One Behind project to the global education community and shared some initial findings on impact bonds to date. 

The four presentations began with Arushi Terway and Marina Dreux Frotté who introduced both the IFE-2-Leave No One Behind project research framework as well as what we know and do not know so far about impact bonds as a financing mechanism in education. Anaka Harish Ganesh and Georgia Thorne followed this by presenting initial findings of a review and analysis of 123 academic publications and 128 impact bond initiatives. Much of the data used in this analysis can be found in the newly launched Impact Bonds Database. The preliminary findings highlighted the research gap on impact bonds and demonstrated a clear need for more empirical evidence on education impact bonds, especially in the Global South. 

The final two presentations introduced two impact bond initiatives. First, Cynthia Rayner (UCT) presented the Impact Bond Innovation Fund (IBIF), the first social impact bond in early childhood development (ECD) in South Africa. This presentation shared some preliminary findings from the project’s summative evaluation conducted under the IFE-2-Leave No One Behind project. Secondly, Archana Mehendale (TISS) presented the education context under which the Quality Education India Development Impact Bond (QEI-DIB) was implemented. 

Following the presentations, Nicholas Burnett facilitated questions and answers with the audience. The questions raised by the audience demonstrated a deep engagement with the topic and brought up thought-provoking questions for researchers and practitioners. Topics included the difficulty in understanding and measuring the contribution that financial innovation used in impact bonds make to education quality and equity. The panellists highlighted that there is still a dearth of empirical and academic research examining the existing data on impact bonds being implemented in education. 

The audience and presenters also discussed the importance of strengthening the capacity of government stakeholders to understand the terms of such impact bond contracts and assess their contribution to their education system, especially in comparison to traditional financing. Members of the audience also brought up the need for defining prerequisite conditions in a context where impact bonds can be utilised. Impact bonds require a certain level of financial regulations, data and measurement systems, and stakeholder capacity to be present for design and implementation.

The IFE-2-Leave No One Behind project is committed to examining the issues raised during the session and developing a better understanding of what is currently known about impact bonds. Through collation and analysis of existing knowledge and evaluations of impact bonds, the project aims to contribute to the publicly available knowledge base on the topic.

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