Innovative Financing and Sustainable Development: Lessons from Global Health

The growth of innovative financing for development over the last decade has demonstrated the enormous potential of new mechanisms for generating resources beyond traditional official development assistance. In the global health sector, diverse innovative finance institutions provide a window into the relative merits of approaches that rely on taxation, bonds, and advanced contract arrangements. The experience of IFFIm, UNITAID, and the AMC offer broader insights into the importance of sustainability and participation in ensuring the success of innovative finance mechanisms, as well as the potential for innovative financing to contribute to realizing the Sustainable Development Goals. The most successful of these innovative mechanisms are generally the most automatic in terms of financing and the most participatory in terms of governance.

More participatory approaches to designing and governing innovative financing seem to foster better outcomes in terms of the ultimate market impact of these financing mechanisms.