India LiftEd DIB

• In Event: Beyond the Pilot: Mainstreaming Outcomes-Based Financing (OBF) to Drive Systemic Education Reform

Proposal

As a sandbox for innovation, India has garnered a strong track record in using Outcomes-Based Financing (OBF) instruments such as Development Impact Bonds (DIBs) and outcomes-based procurement to improve learning outcomes among children. Building on the successes and learnings of these OBF initiatives, LiftEd DIB was launched in 2023 with a total budget of $14.6 million, to improve Foundational Literacy and Numeracy (FLN) for 1.5 million children in India. What differentiates the LiftEd DIB from other OBF initiatives is its intentionality in prioritising scale and sustainability - achieved through the pioneering use of OBF for government systems strengthening. This goes beyond what is typically expected of such instruments, which centre around effectiveness and cost efficiencies.

Unique features of the LiftEd DIB: design features that enabled this paradigm shift include:

- Adopting lean, cost-effective indirect interventions - The LiftEd DIB shifts away from conventional direct delivery models that impact bonds typically employ, which while impactful and easier to attribute, have seen limited scale and institutionalisation. The DIB interventions build on and help in performing existing government roles and responsibilities more effectively (e.g., building capacity of the middle management layer), allowing it to reach an unprecedented number of children (nearly 10x that of Quality Education India DIB which was highly impactful and cost effective, but much more intensive and therefore not possible to embed in ongoing government operations). This approach was buoyed by a strong national FLN Mission. The interventions were refined during a grant-funded learning year, which helped to test and adapt the interventions, unearth benchmarks on effect of indirect interventions on learning outcomes, and collaboratively develop a measurement framework

- Defining an innovative measurement and payment approach – the DIB challenged the perception that systems change is difficult to quantify and measure by not only incentivising learning outcomes but more importantly the systemic shifts required to embed good practices and behaviours within government processes for long-term sustainability. Under the outcomes framework, payments are tied:

Systemic Shift Indicators (SSIs), which serve as critical markers of lasting improvements (e.g., in governance, roles and capacity of middle management cadre and mainstreaming of effective FLN classroom practices) and

Student Learning Outcomes (SLOs), paid for as a three-year effect to allow for longer gestation required by indirect interventions to demonstrate learning gains

- Upfront and intentional government engagement ensuring that selected interventions are co- created with government and function as integrated extensions of the system



Few early learnings that have emerged from operationalising the DIB:

-Adopt a fit for purpose verification approach that balances rigour with operational ground realities of observing government stakeholders

-Embrace a ‘do and learn’ approach that allows for flexibility and adaptability in a data scarce environment

-Collaborate and co-create with all parties involved, ensuring bottom-up approach that accounts for diverse perspectives.


Halfway into its implementation cycle, the DIB is showing promising midline results on both SSIs and SLOs and serves as an innovative blueprint of how OBF can be applied to systems strengthening, leading to sustainable impact.

Authors

• Anushree Parekh, British Asian Trust

• Shivakshi Rana, Language and Learning Foundation

• Dayoung Lee, Dalberg Advisors