Global Health Financing Trends in the Age of Transitions: Impact Bonds & Loan Buy-Downs

Abstract

The global health financing architecture is undergoing a defining moment characterized by multiple transitions, alongside a changing global political economy. These changes have brought with them challenges which require exploration and experimentation with different models of financing. Blended financing instruments, specifically impact bonds and loan buy-downs, are some of the instruments that have recently been applied in various settings. This thesis aims to investigate the innovative and blended financing trends in global health, to analyze cases of impact bonds and loan buy-downs in use, and to offer recommendations based on the lessons learned from this early phase of their use. Pursuant to this, this research uses a mixed-method approach, with a desk-based component including scoping and grey literature reviews. In-depth key informant interviews were conducted with 20 stakeholders from various global health organizations, think tanks, civil society and the business community. The findings showed that innovative and blended financing instruments have a limited role to play in the changing global health financing landscape, and that the greatest gains were to be made from increasing domestic health spending in developing countries. Buy-downs and impact bonds are applicable in specific narrow contexts, and this study proposes a framework to assess a public health problem’s suitability to either instruments.