The privatisation of finance: can private finance save the world?

Two ideas are widely accepted. First, that the scale of the grand challenges - social, developmental and environmental - facing humanity and the planet are such that current government finances are inadequate to address them. Second, that there is a wall of money globally held in private hands that could be mobilised to invest in projects that address the grand challenges. In this chapter we explore some recent developments in policies and mechanisms that seek to entice this privately held finance into the world of impact investing, thereby addressing the grand challenges. Specifically, we ask do the current impact investing policies and techniques reduce costs, improve capacity or innovate ways to address the grand challenges? We address these issues by exploring the recent growth of two forms of impact investing - impact bonds and green finance. Despite having different originations both forms of investing exhibit similar characteristics with a lack of empirical evidence to substantiate the positive claims of their advocates, chief among the concerns. We conclude the chapter by discussing our findings and questioning the ability of impacting investing to make a significant difference in addressing the global grand challenges and instead call for policies that will redistribute wealth to focus on social, developmental and environmental issues.