Social Impact Bonds and the Perils of Aligned Interests

Maier, Florentine; Meyer, Michaël

doi:10.3390/admsci7030024

Cited by 49 publications

(41 citation statements)

References 17 publications

(18 reference statements)

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“…Distinguishing features of SIB emerging in the literature may be summarized into the following main streams: (i) SIBs represent an innovative partnership between socially oriented investors, public commissioners, and non-profit service providers, often coordinated through a specialist intermediary to tackle deeply ingrained social problems [82]; (ii) SIBs are directed to produce improved social outcomes for society, generating public savings [83]; (iii) SIBs models produce financial risk transfer from the public sector to investors [84]; and (iv) SIBs financial returns depend on achievement of outcomes after a rigorous evaluation and measurement of it [84]. The interplay of the above described mechanisms is represented in Figure 1.…”

Section: Social Impact Bonds (Sibs): Overviewmentioning

confidence: 99%

Business Models for Sustainable Finance: The Case Study of Social Impact Bonds

et al. 2019

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Business models for sustainability (BMfS) are relevant topics on research agendas, given their orientation toward sustainability issues. However, traditional versions of these models are often ill-equipped at solving complex social problems. Cross-sector partnerships for sustainability (CSPfS) have been recognized as a new paradigm that mitigates the failure of traditional models. Impact investing, and social impact bonds (SIBs) in particular, represent an interesting field of research in innovative business models for sustainable finance, even though the literature does not consider SIBs within this broader field. We propose an exploratory study based on qualitative methods aimed at conceptualizing SIBs within the framework of BMfS and understanding how SIB collaboration varies across social sectors and geographical areas. Our study identifies three different models of SIBs characterized by the different degrees of collaboration between actors: (i) SIB as a fully collaborative partnership; (ii) SIB as a low-collaborative partnership; and (iii) SIB as a partially collaborative partnership. Our findings are useful to policy makers and practitioners involved in the SIB design, suggesting that a fully collaborative SIB model may stand a better chance of achieving the expected social impacts.

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Section: Social Impact Bonds (Sibs): Overviewmentioning

confidence: 99%

Business Models for Sustainable Finance: The Case Study of Social Impact Bonds

et al. 2019

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“…SIBs' strategic ambiguity has advantages for both their proponents and critics. At times, SIBs are lauded for their potential to foster innovation (Leventhal 2012), to "scale-up" evidence-based programs (Burand 2012;Rudd et al 2013;Maier and Meyer 2017), or to enable flexible and personalised services tailored to service users (Jackson 2013). At the same time, SIBs are promoted as a tool to improve productivity and value for money, or promote more measurement and accountability (Mulgan et al 2011;Liebman 2011).…”

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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“…The question of the "Alignment of Interests" was further clarified by Maier and Meyer [25], who highlighted that like any other kind of contract, a SIB could only bring a partial alignment of the main actors' interests due to the outcome-based incentives, as each actor continues to also have interests that differ from those of the others.…”

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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Social Impact Bonds and the Perils of Aligned Interests

Cited by 49 publications

References 17 publications

Business Models for Sustainable Finance: The Case Study of Social Impact Bonds

Business Models for Sustainable Finance: The Case Study of Social Impact Bonds

Widening perspectives on social impact bonds

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

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