Dr. Simeon Djankov:

Indeed, and the World Bank earlier this year pioneered what is called the social inclusion bond for client countries. It does not yet apply to Europe but perhaps we should have discussions with the European Union and national governments around that. The bond aims to serve exactly the purpose outlined by the Senator. Research suggests that most governments and most politicians, if facing a choice between investing in human or physical capital or if their budgets are constrained, will generally give preference to physical capital. This report and a number of other recent publications and projects of the World Bank make the point that we must change the financial returns. In some countries, particularly in Africa and south Asia, we have come up with social inclusion bonds whereby the World Bank steps in, together with some member governments, and organises a financial scheme that makes it interesting for the financial markets to take up these bonds. We have had three or four such experiences this year which have all been very positive. This can apply to emerging markets as well as to advanced economies like Ireland.