The article by Avnish Gungadurdoss, Instiglio’s Managing Partner, highlights the growth and effectiveness of impact bonds globally, with over 200 registered transactions and 19 in low- and middle-income countries. However, despite their success, governments have slowly adopted these instruments on a larger scale. The author emphasizes that impact bonds and results-based financing (RBF) are about deploying simple and sensible delivery management practices. These practices include setting clear targets, empowering frontline staff, measuring progress, rewarding performance, and repeating these steps. The urgent need for improvement in addressing critical issues like inequality and climate change necessitates a shift toward citizen-centered program delivery.
The article argues that strengthening delivery governance is crucial for achieving successful outcomes. Delivery accountability is a fundamental precondition, with citizens needing information and mechanisms to hold governments accountable for delivery targets. The example of Rwanda is cited, where significant investments in delivery governance, including transparent reporting and performance contracts, have improved delivery performance and outcomes in areas such as universal health coverage.
To prioritize and invest in more robust governance systems, the collaboration between governance and service delivery is necessary. This involves increasing transparency around delivery targets and performance, strengthening independent institutions for quality audits, and introducing performance incentives within government agencies. By incentivizing governments to search for more significant impact and leveraging tools like impact bonds and RBF, delivery governance systems can direct resources toward well-functioning delivery systems that produce tangible results.
The article highlights three critical investments required for strengthening delivery governance: increasing transparency, strengthening independent institutions for quality audits, and driving intragovernmental incentives through performance-based grants. Each country needs a tailored roadmap to achieve strong delivery governance, and prioritizing these systems will benefit donors, citizens, and government champions by promoting effective service delivery.