Frontier Technology: Connecting Finance to Results: Can Emerging Technologies Make Impact Bonds More Impactful?
Emerging technologies including Remote Imagery, Distributed Ledger Technologies, Artificial Intelligence, and the Internet of Things
Abstract
Impact Bonds are a potentially transformative new mechanism in the development toolkit, but the costs and complexities in designing, structuring, contracting, verifying and evaluating these instruments are still being addressed.
This report analyses the existing landscape of emerging technologies deployed in use cases relevant to results-based financing structures, including Remote Imagery, Distributed Ledger Technologies, Artificial Intelligence, and the Internet of Things to assess whether these technologies can play a role in making Impact Bonds more robust, cost-effective, efficient and transparent.
Despite the absence of much substantiating evidence, the research analysis indicates that there appears to be great promise in many existing use cases. The main constraint to the scale of these technologies seems to be the absence of an enabling ecosystem within which individual use cases can thrive and scale. Enabling ecosystem deficits include efficient interoperability between the many different tokens, cryptocurrencies and platforms; capacity of donors and governments to understand and use the technologies; and availability of cheap, cost-effective, robust technological infrastructure.
This report offers insights based on analysis of 5 of the more mature applications and makes recommendations for how the UK Department for International Development (DFID) could most constructively develop and shape the field.
This work is part of the ‘Frontier Technology Livestreaming’ programme
Citation
Vanderwal, P., and Hellrung, T. (2019) Connecting Finance to Results: Can Emerging Technologies Make Impact Bonds More Impactful? Dubai, UAE: Stratigos.
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