Implementation of social impact bond as an innovative financing for social development in Colombia

다국어 초록 (Multilingual Abstract)

Colombia has improved substantial economic and social aspects over the last two decades, but there still exist various social issues including the high level of unemployment rate and informality. Considering these problems, Colombia not only needs huge fundings but also efficient public expenditure. In this sense, Social Impact Bond (SIB) has emerged and drawn the greater interest as an innovative financing mechanism in which public and private sectors participate in supporting social programs in an efficient and effective way. Colombia implemented such a scheme for the first time among developing countries in 2017 and ran the SIB program for the employability of vulnerable populations. Therefore, this thesis has three key objectives to observe why and how SIB was implemented as an innovative development financing instrument in Colombia, to figure out the performance of Colombia’s first SIB in terms of result-based financing (RBF) model; and to analyze how Colombia met enabling factors of SIB introduction and expansion.

목차 (Table of Contents)

• I. Introduction 1
• 1. Background overview and Objective 1
• 2. Research Scope and Methodology 4
• 3. Thesis outline 5
• II. Theoretical Background and Literature review 7
• 1. Theoretical Background 7
• 1.1. The Emergence and Definition of SIB 7
• 1.2. Structure of SIB 9
• 1.3. Benefits and Risks of SIB 10
• 1.4. Active SIBs in the world 12
• 1.5. Active SIBs in Latin America 15
• 2. Literature Review 18
• 2.1. Previous studies on SIB in Latin America 18
• 2.2. Previous studies on SIB cases of the UK and US 19
• 2.3. Analytical Framework: Enabling factors for SIB introduction and expansion 23
• III. Colombia SIB 'Empleando Futuro' 25
• 1. Background of the SIB introduction 25
• 2. Overview of the first Colombia Workforce SIB: Empleando Futuro 30
• 2.1. Stakeholders in Empleando Futuro 30
• 2.2. Participants in Empleando Futuro 35
• 2.3. Metrics of Empleando Futuro 36
• 2.4. Result of Empleando Futuro 38
• IV. Enabling factors in implementing the first Colombia Workforce SIB 40
• 1. Legal conditions 41
• 1.1. SIB related law and regulations 41
• 1.2. Authorization law for state and local governments to contract SIBs 44
• 2. Political conditions 45
• 2.1. Strong support from the Colombia government 45
• 2.2. Guarantee of policy continuity: the inter-institution agreements and the expansion of the program period 46
• 2.3. Supportive political ecosystem: collaborative and cooperative stakeholder engagement 48
• 3. Financial conditions 49
• 3.1. Financial resource for up-front capital: investments from non-profit foundations based in Colombia 49
• 3.2. Financial resource for outcome: outcome payment through co-financing with IDB-MIF and SECO 50
• V. Conclusion 52
• Bibliography 56