A fictitious commodification of local development through development impact bonds?

Abstract

This article explores the dynamics of an emerging innovation, the development impact bond (DIB), a contract established among several actors with a development objective. Because there has been limited exploration and questioning of the ideologies behind the DIB, the aim here is to address this issue. This work, based on a literature review, is a contribution to understanding DIBs in the specific context of developing countries but, more generally, the financialization of social initiatives and the implication for the governance of local scales. I show that DIBs can be thought of as “fictitious commodities” exchanged within private–private partnerships. If the local states become a key component of the new modes of local regulation, favoring the supranational and subnational scales, local authorities are not involved in DIBs. The evolution of welfare as a development, through the question of this local scale, with the growing involvement of the private sector is therefore of great importance.