Summary of Impact Bonds in Mexico

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Impact Bonds in Mexico summary
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Rating

8 Overall

8 Importance

8 Innovation

7 Style


Recommendation

Conceived to help government agencies with limited budgets fulfill their social responsibilities, impact bonds reward investors only if the borrower attains measurable results. According to this engaging report from experts at the Brookings Institution and Ethos, Mexico appears to be an ideal proving ground for this financing model, given the security, health and economic obstacles the country faces. getAbstract recommends this informative study of a burgeoning area of social impact investing to the lay reader and policy expert alike.

In this summary, you will learn

  • How impact bonds work,
  • What they have achieved so far, and
  • How these financing vehicles could address Mexico’s challenges in human development and social welfare.
 

About the Authors

The Brookings Institution is a nonprofit independent research organization. Ethos is a public policy think tank based in Mexico.

 

Summary

First launched in 2010, impact bonds are an innovative source of financing to address socioeconomic challenges around the world. The mechanics of an impact bond, which “harnesses private capital for social services,” are somewhat unique. Investors place funds with a service provider that has a social mandate. Once the funded program achieves its desired results, an “outcome payer” – a government, international development agency or foundation –reimburses the investor. Three developments have driven the growth of impact bonds: First, social challenges have motivated governments to put more financially sound programs into effect. Second, officials are concentrating on linking investment returns to the realization of measurable goals. Third, demand is growing for investments that offer societal benefits as well as financial rewards.


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