Social Impact Bond: Investment in Life

The innovative concept called “Social Impact Bond”, aimed at increasing road safety, was at the heart of a two-day workshop organized by the UN System in the country, which gathered representatives of national institutions, organisations and private companies working in the area of road safety. Social Impact Bond concept aims at reducing traffic deaths and injuries through mobilizing innovative public instruments for funding interventions which would increase road safety.

“Road traffic accidents are leading cause of death for young people age 15-29, which is why road safety is finally recognized as a global development issue, with a stand-alone target in the Sustainable Development Goals,” said UN Resident Coordinator in Montenegro, Fiona McCluney, adding that addressing such a complex issue requires both political and financial commitments.

"In an era of financial constraints, innovations such as the Social Impact Bond can be effective response for reducing deaths and injuries on the roads of Montenegro"

Fiona McCluney, UN Resident Coordinator in Montenegro

The State Secretary at the Ministry of Interior Dragan Pejanović pointed out that human factor, poor infrastructure and technical conditions of vehicles are major cause of road accidents, emphasizing that “the Government is fully committed to support any initiative which would contribute to decrease of traffic accidents and saving lives”.

Social Impact Bond is a contract between a government and investors that funds positive results, such as Paying for Success – a model that directs government resources toward social programmes that perform well. According to the concept, the fewer people getting killed or injured on the road means the government saves money, and investors get a return.

“Understanding the value of prevention makes the case for investment into an important social cause such as road safety,” said Jane Newman, International Director at Social Finance UK who presented Social Impact Bond examples from different countries.

"The Government is fully committed to support any initiative which would contribute to decrease of traffic accidents and saving lives"

Dragan Pejanović, State Secretary at the Ministry of Interior of Montenegro

The workshop offered valuable insights into the major causes of road traffic accidents in Montenegro. Participants, including representatives of the Government, international organizations, private sector and local authorities, were presented the analyses of the road safety trends in Montenegro, cost analysis of traffic accidents in the country and the role of insurance companies, driving schools and technical validity of vehicles in the context of the road safety.

Over the past 11 years, Montenegro saw over 83,000 traffic accidents, which means 21 accidents every day or one accident nearly every hour. With an annual average of 10 traffic accident fatalities per 100.000 inhabitants, Montenegro is one of the most seriously affected countries in Europe that is most seriously affected in this domain.

Following last year’s initiative of the UN to mobilise national capacities around improved road safety, the two-day workshop enhanced national platform for addressing this problem. Next step is the Outcome Report which will outline the opportunities for Social Impact Bond design and implementation in Montenegro.