Paradoxes of Social Impact Bonds

Maier, Florentine; Barbetta, Gianpaolo; Godina, Franka

doi:10.1111/spol.12343

Cited by 33 publications

(47 citation statements)

References 20 publications

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“…SIB contracts require greater scrutiny as private sector investors or providers may place profit motives above the interests of service recipients (Warner 2013). SIBs are plagued with problems of technical complexity for service commissioners and high transactions costs (Maier, Barbetta, and Godina 2016).…”

Section: Why Do They Matter?mentioning

confidence: 99%

Widening perspectives on social impact bonds

Tan

Fraser

McHugh

et al. 2019

Journal of Economic Policy Reform

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Social Impact Bonds (SIBs) are a novel financing mechanism for public services delivery. This special issue about SIBs in the UK argues that they necessitate closer examination to understand the implications for all stakeholders. This introductory paper critically explores and challenges dominant practitioner narratives of SIBs as "win-win" solutions for governments and service providers. While SIBs may foster innovation it is unclear if they deliver better value given the complexity of public services. SIBs are a strategically ambiguous policy tool and policymakers should be cautious about SIBs due to contractual complexity and issues with ethics, governance, accountability and transparency. ARTICLE HISTORY• Social Impact Bonds are a nascent area of academic research that merits further multidisciplinary analysis. • SIBs are a strategically ambiguous policy tool. • There is insufficient evidence as to whether and how SIBs deliver better outcomes than conventional forms of financing.

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Section: Why Do They Matter?mentioning

confidence: 99%

Widening perspectives on social impact bonds

Tan

Fraser

McHugh

et al. 2019

Journal of Economic Policy Reform

View full text Add to dashboard Cite

show abstract

“…By using the SIB model, governments are more likely to be willing to spend money on social or healthcare programs to improve people's lives by sharing the related risks with the private sector. A well-defined SIB creates an incentive structure that aligns the interests of governments, investors, and service providers around the delivery of a pre-agreed set of outcomes [22][23][24].…”

Section: Alignment Of Interests and Principal Agent Issuesmentioning

confidence: 99%

Social Impact Bonds for a Sustainable Welfare State: The Role of Enabling Factors

Carè

Lisa

2019

Sustainability

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The financial crisis has put pressure on governments throughout the world to reduce deficits with severe budgetary cuts in many welfare areas by reinforcing the need to modernize social policies and optimize their effectiveness and efficiency. Social impact bonds (SIBs) have rapidly become one of the most innovative financial schemes used by governments to privatize the upfront costs of welfare interventions by reducing taxpayer expenditure. Our analysis focuses on healthcare impact bonds (HIBs) that correspond to the adaptation of SIBs to health programs and are considered to be a viable way to fund out-of-pocket and preventive programs, especially considering the recent cuts to public healthcare expenditure. By using an in-depth qualitative analysis of existing practices based on a multiple case study approach, this study contributes to the ongoing debate on the role of SIBs for the future sustainability of welfare systems by proposing reflections and indications for the scalability and replicability of SIBs. With respect to the existing literature, this paper provides a theorization of the main scaling ingredients to be considered for the development of the SIB market as a supporting financial approach for new and emerging welfare needs by also proposing suggestions and insights and serving as a guide for scholars and practitioners.

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“…If their returns were not so rigidly linked to specific outcomes, they could allow for a more flexible, comprehensive approach. Achieving these outcomes, however, requires prior evidence of success, fidelity, and consistent results (Maier et al, 2017).…”

Section: Negotiating the Razor's Edge Of Financializationmentioning

confidence: 99%

“…Performance metrics are the bedrock of SIB design. Though performance measures have helped target educational services (Boyne & Chen, 2006) and can be structured to create positive feedback to organizations (Schalock & Bonham, 2003), in SIBs the concern is that these measures may reduce flexibility and innovation (Maier et al, 2017). The selection of metrics; their threshold for success, measurement method, and evaluation rigor; and the performance of the intervention against its outcome targets are the sole factors that determine the payout in a SIB contract.…”

Section: Performance Metricsmentioning

confidence: 99%

The razor’s edge: Social impact bonds and the financialization of early childhood services

Tse

Warner

2018

Journal of Urban Affairs

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In a growing number of U.S. cities, social impact bonds (SIBs) introduce an experimental strategy into the politics of fiscal constraint. With limited political willpower and public funding, some have used SIBs to leverage new support for social programs. We argue that cities that engage in SIBs walk a razor's edge between promoting public investment and the risk of deepening financialization in the social service sector. We explore efforts in 3 cities to expand early childhood services through SIBs: Salt Lake City, Utah; Chicago, Illinois; and Greenville, South Carolina. We test the balance between promise and risk through four foci: systemic change, performance metrics, cost structure, and social equity. We show that the context of political fiscal climate and strategic policy change matters in SIBs' justification and impact; whereas Salt Lake City and Greenville scaled investment up to the state level, Chicago merely plugged short-term local budget gaps. Social impact bonds (SIBs) offer an experimental strategy for U.S. cities navigating the politics of fiscal constraint. These emerging financing mechanisms represent an alluring possibility: increased investment in social programs through private financing (Pequeneza, 2018). We explore how U.S. cities have maneuvered through the allure of SIBs, and their Trojan horse-like dangers, as they strive for more equitable social service delivery.

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Paradoxes of Social Impact Bonds

Cited by 33 publications

References 20 publications

Widening perspectives on social impact bonds

Widening perspectives on social impact bonds

Social Impact Bonds for a Sustainable Welfare State: The Role of Enabling Factors

The razor’s edge: Social impact bonds and the financialization of early childhood services

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