Innovative Finance

There is a renewed recognition that the global public sector must work effectively with the private sector to deliver development returns. Implementing the Sustainable Development Goals requires new investments in sectors like health, education, energy, and infrastructure—needs estimated well into the trillions of dollars annually, an order of magnitude greater than annual foreign aid. As a result, the Addis Ababa Action Agenda, issued after the third annual international conference on financing for development, includes the phrase “private sector” 18 times, as many times as it mentions “international cooperation."
CGD’s work in innovative finance seeks to inform how we can structure effective partnerships between donors and private investors. From creating incentives for vaccine development for neglected diseases to investing in development impact bonds that combine private service delivery with outcomes-based public financing, CGD’s path-breaking ideas home in on how to crowd-in private sector financing, expertise, and tolerance for iteration and adaptation in order to effectively deliver sustainable development.