Teaching Case - Betting Private Capital on Fixing Public Ills: Instiglio Brings Social Impact Bonds to Colombia

Betting Private Capital on Fixing Public Ills: Instiglio Brings Social Impact Bonds to Colombia

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  • Product Description

    Abstract:
    In July 2012, three freshly-minted Harvard Kennedy School graduates bought one-way tickets to Medellin, Colombia, to launch a nonprofit startup they called Instiglio. Their idea: to bring Social Impact Bonds, still experimental even in affluent nations, to Colombia and other low to middle income countries. This public policy case--one of two HKS cases about Instiglio--provides background about the SIB model (a financing mechanism for experimental social programs, with private investors shouldering the financial risk of failure) and tracks the early experience of the HKS graduates in Colombia. The case focuses on two of the most critical decisions the Instiglio group faced: (1) how to pick a project topic, in the midst of competing demands and limited information and (2) with a project topic in hand, how to design a SIB agreement that would satisfy the needs of both investors and government leaders. A second case on this topic, Devil in the Details: Designing a Social Impact Bond Agreement in Medellin, is a statistics case. It includes much of the same background information as Betting Private Capital, but homes in on the technical challenges of designing a SIB agreement.

    Learning Objective:
    The case was designed to teach tools of policy analysis. In the first instance, students are guided to develop criteria for selecting among competing options and to create a matrix to compare the options and identify the best. In the second, students are asked to consider the competing interests of investors and government leaders, and to analyze the difficult task of setting performance measures in that context.

  • Other Details

    Publication Date: August 01, 2014
    Teaching Plan: Available with Educator Access
    HKS Case Number: 2026.0
    Case Author: Pamela Varley
    Faculty Lead: Dan Levy
    Pages (incl. exhibits): 21
    Setting: South America, Columbia
    Language: English
    _year: 2010-2015
    _pages: 16-25
    _geography: Latin America
  • Warranty Information

    /review/2026.0.EducatorCopy.pdf, /teachingplan/2026.2.pdf

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