Much of the development policy is geared toward increasing investment and creating the conditions that allow private capital flows to take the place of development assistance. The renowned development success stories of Taiwan, South Korea, Eastern Europe, Costa Rica, and China have all been marked by a dramatic increase in private investment, both domestic and foreign.

Investments designed specifically to promote development have been increasing. They go by many names, including triple-bottom-line, venture philanthropy, and social-impact investing; they all focus on achieving a development result as well as a financial return, and many have the potential for significant returns.

Such investments are not new, but their application across a broad range of sectors—from moderate-income housing to health care, water and sanitation, and rural development—is recent. And they raise several critical questions for development policy. Do they represent an effective new tool for long-term development? Are they likely to reach the scale necessary to be part of an overall development strategy? There is little data to assess definitively the development impact of this burgeoning activity, but past and current efforts do help indicate whether this sector is worth promoting as a matter of public policy