An Impacts-Based Strategy for Efficient and Sustainable Development Fundinge
ABSTRACT
This paper describes the notion of development credits generated by verified social and environmental impacts in much in the same way that carbon credits are generated by verified reductions in carbon emissions. In this approach to development financing, donors set prices for credible evidence of progress towards specific goals like improved standards of living, reduced disease burdens or improved environmental conditions in poor countries. This generates a direct link between resource flows and clear scientific evidence, generated by independent rigorous evaluations and audited output statements, of the incremental impacts of programs run by NGOs, governments, communities and businesses. To give an example, an NGO running an anti‐malaria program that directly resulted in an estimated ten thousand fewer Nigerian children dying from malaria would earn development credits valued at ten thousand times the current price offered by donors for saving a child’s life. The most ambitious version of this approach is a global market for credits generated by verified development impacts, allowing the most effective organizations and programs to finance their operations through impersonal market mechanisms that measure and reward performance.
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