Big Step for Latin America

Over the last decade, Latin America and the Caribbean have seen unprecedented development gains. Over 60 million people escaped poverty and over 100 million people entered into the middle class. For the first time in the history of the region, there are more people in the middle class than in poverty.

Yet, the tailwinds of the global commodity boom have begun to subside and most regional economies are expected to slow down. In these times when government has to try to more with less, there is a need for innovation around social problems more than ever. In a digital world of technology and many sources of data, there is an opportunity for LAC governments to change and become models for government of the 21st century: smarter, more accountable and more outcomes-focused. 

Over the last year, a new financial product called social impact bonds (SIBs) has garnered excitement throughout Latin America as a way for government to pay for social services in the event  that a results is achieved through a partnership with impact investors.  Around the globe, a growing number of OECD countries, such as the U.S. and U.K., have begun to develop social impact bonds to solve a variety of different social problems.