Toby Lowe, Jonathan Kimmitt, Rob Wilson, Mike Martin* and Jane Gibbon
This blog post was originally published on the Discover Society – Policy and Politics blog on 4 December 2018.
In 2010, the UK’s Ministry of Justice established the first Social Impact Bond (SIB) – a new policy tool, designed to link the outcomes of social interventions to payments. The idea was that the financial risk of these interventions would be borne by a private investor rather than public funds. In our recent research article published in Policy & Politics, we set out to offer one of the first detailed accounts of how these mechanisms are created and implemented. Our results highlight three levels of analysis (macro, intermediate and micro) where tensions and congruencies can be found.
Continue reading How are social impact bonds created and implemented?
Meghan Joy and Dr. John Shields
In a post sub-prime mortgage induced financial crisis, another financial tool that risks increasing precarity for those most vulnerable is becoming increasingly popular in a political climate of austerity.
Social Impact Bonds (SIBs) are a social policy tool that claims to solve complex policy problems, such as homelessness, unemployment, and recidivism, through the scientific methods of financial modelling. Actively supported by several governments worldwide – there are currently 54 projects in 13 countries – SIBs provide a mechanism to turn the risky behaviours of vulnerable individuals into a form of profit making for private impact investors. SIB projects target population groups, such as the homeless, troubled youth, and obese, whose problems result in costly use of emergency-oriented public services such as shelters, prisons, and hospitals. In this way, SIBs are positioned as preventative, allowing future savings on costly public programs. These savings, also known as impacts, outcomes, or results are measured for their social value created (Dowling & Harvie, 2014). The SIB instrument places a current price on anticipated social value based on the assessed future risk that participants will not be reformed. Risks become a reward as investors bet on the extent to which vulnerable people will be transformed.
Continue reading The Immorality of Innovation – the Tale of Social Impact Bonds