Every Policymaker Should Know. . . Some state investors define targeting to be concessionary lending based on social considerations. Others consider any geographically-oriented investment to be an ETI whether or not the investment fills an identifiable capital gap in the state economy. We have adopted a definition that we believe represents the consensus of experts in the field. In contrast, ETIs must be organized to yield a market rate of return commensurate with risk, liquidity, and transactional costs.
Most investments yield a return to society.
Traditional corporate stocks and bonds transform the nation's savings into business investments that create jobs, products, and economic growth. Government bonds finance infrastructure and schools that provide the environment for the economy to function and grow. ETIs are distinct from standard investments because they provide a greater overall social return per dollar invested. ETIs are able to provide exceptional returns because they provide money to underfinanced sectors of the economy-capital gaps. Capital Gaps Capital gaps occur when investment markets do not immediately adjust so that supply meets demand.