The Governance of Social Risks: Nurturing Social Solidarity through Social Impact Bonds?

Abstract

Despite having been around for a decade now, Social Impact Bonds (SIBs) payment by result contracts funding social programmesare still a niche instrument. Constituting but a fraction of the overall impact investment sector, they were expected to grow much faster and augur a new model of pursuing social policy objectives. Whilst this has not yet occurred, they nevertheless continue to benefit from a great degree of political support and academic interest. But outside of the practitionerfocused literature, the scholarship investigating SIBs has largely identified financialisation and the erosion of social solidarity as the main dynamics underpinning this development. This article argues that it is important to also attend to SIBs as expressions of transformations occurring within the design and pursuit of social policy objectives. By looking at SIBs as a form of governance of social risks, the article argues that SIBs nurture their own forms of social solidarity. Based on three distinguishing tenets of SIBs, three types of solidarities are emphasised: inter-temporal, cross-sectoral and risk-insurance solidarities. Whilst these can spur social inclusion, innovation and collaboration, the article discusses how they can also be spurious and can come undone.

Do impact investors live up to their promise? A systematic literature review on (im)proving investments' impacts

“…Barman et al (2021) and Mook et al (2015) raise the concern that a single‐ratio calculation might in the end not serve the intended impact nor serve strategic decision‐making. In the context of social impact bonds, Guter‐Sandu (2021) emphasises that performance targets pose the risk of achieving targets rather than truly assessing whether the intended aim is achieved. By providing both quantitative and qualitative information, attention is put on the purpose of improving impact.…”

Monetary architecture and the Green Transition

“…This way OBFAs like Fannie Mae can essentially crowd in the shadow banking sector, steering it toward politically-desired objectives. Recently, for instance, Fannie Mae has expanded also in the green and social bond sectors (Guter-Sandu, 2021). Since 2012 the OBFA has issued over $112 bn in Green MBS, which consist of mortgage loans attached to newly-constructed residential homes that meet specific energy- and water-savings standards (Fannie Mae, 2023a).…”