UN Department of Economic and Social Affairs (DESA) Working Papers

The UN Department of Economic and Social Affairs (DESA) Working Papers aim to stimulate discussion and critical comment on the broad range of economic, social and environmental issues associated with the United Nations Development Agenda.


Aid Securitization

Beyond IFFlm

The International Finance Facility for Immunization (IFFIm), which securitized future aid commitments by donor countries, has been successful in providing funds to immunize children in poor countries. Since capital is likely to remain scarce, the paper evaluates the prospects of setting up IFFIm-like mechanisms to fund a variety of objectives. Two broad conclusions emerge. First, replicating IFFIm could prove challenging because donor pledges will lack the desired credibility. Second, credit enhancements like third party guarantees, excess coverage, and channeling of pledges through a preferred creditor, could overcome this deficiency. Finally, Advance Market Commitments and Cash on Delivery are alternatives to deliver some of the advantages of IFFIm.


Keywords: GAVI, IFFIm, Innovative Development Finance
JEL: O16: Economic Development, Innovation, Technological Change, and Growth / Economic Development / Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance; H27: Public Economics / Taxation, Subsidies, and Revenue / Taxation, Subsidies, and Revenues: Other Sources of Revenue
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