The 2008 financial crisis and its subsequent economic impacts generated a challenge for national and regional governments across the world. From this economic ruin, the Social Impact Bond (SIB) was born as an alternative mechanism for government procurement and delivery of social public services.
Social Service, Private Gain examines the evolution of SIBs, how they work, their theoretical motivation, and their global proliferation. The book critically assesses the potential of SIBs to constructively contribute to solving the multifaceted social challenges emerging from a context of entrenched and growing inequality. Claiming to bring incremental resources to the rescue, SIBs have taken up disproportionate space with new legislation, policy, subsidies, institutional supports, lobbyists, and "intermediaries" facilitating SIBs and thriving on their associated transaction costs. Drawing on mainstream and heterodox economic theory, practical case studies, and empirical data, Jesse Hajer and John Loxley generate new insights based on the limited but still suggestive publicly available data on SIB projects. Challenging the assumptions and narratives put forward by proponents of the model, they offer practical policy recommendations for SIBs and explain what the model tells us about the potential for transformational change for the better.
Table of Contents:
Preface
Acknowledgements
List of Tables
List of Figures
INTRODUCTION
Part A: The Characteristics and Emergence of the Social Impact Bond Model
Chapter 1: The Structure of Social Impact Bonds
Introduction
I. Defining SIBs
II. Public versus Private Dimensions in Social Service Provision
III. Defining Features of SIBs
IV. Conclusion
Chapter 2: The Short History of SIBs and the Development of the Enabling Field
Introduction
I. The Scale of Impact Bonds by Sector
II. The Distribution of SIBs by Country
III. SIBs Delivering results
IV. Investor returns
V. Conclusion
Part B: Efficiency-Based Explanations of SIB Emergence
Chapter 3: The Rationale of SIBs
Introduction
I. Claim 1: SIBs Allow More Social Programs to be Delivered
II. Claim 2: Better programs: Higher quality and greater effectiveness
III. Claim 3: Better system:
IV. Conclusion
Chapter 4: Social Impact Bonds as Public Private Partnerships
Introduction
I. Review of the Public Private Partnership (PPP) Infrastructure Delivery Model
II. SIBs as Public Private Partnerships
III. Economic Theory and Modeling of PPPs and SIBs
IV. A Comparative Framework for Evaluating SIBs versus conventional procurement
V. Conclusion
Part C: The Political Economy of SIBS
Chapter 5: Private Institutional Participants in SIBs
Introduction
I. The Institutional Participants in SIBs
II. Service Providers: The Significance of the Non-Profit Form
III. Altruism, Intrinsic Motivation and Reciprocity
IV. Implications for SIB Implementation and Design
V. Conclusion
Chapter 6: Government
Introduction
I. Motivations of Government
II. Relative Cost Critique
III. Theories of the State
IV. Implications for SIB Design and Regulation
V. Conclusion
Chapter 7: The Political Economic Context of SIB Emergence
Introduction
I. Defining neoliberalism
II. Financialization
III. Comparative Analysis of SIB Leaders and Followers
IV. Side note: The UK Versus the US
V. Conclusion
Chapter 8: Development Impact Bonds
Introduction
I. Expanding Enabling Fields
II. Examples of DIBs
III. Other Observations on Existing DIBs
IV. A Closer Look at the Claimed Rationale of Results-Based Aid and its Challenges
V. Are DIBs the Future for Foreign Aid?
VI. DIBs and the Need for Foreign Aid
Chapter 9: Policy Recommendations, Reforms and Alternatives
Introduction
I. Recap of Policy Recommendations
II. The Micro Alternative: Conventional delivery through (re)building state capacity
III. The Macro Alternative: Universalism vs. Individualized Approaches
IV. Conclusion
References
Appendix A Review of Meta-analytical Studies on Common SIB Policy Sectors
Appendix B: Sector Proportion of SIBs, by Country
Appendix C: Reported and Estimated SIB Maximum and Expected Investor Returns
Appendix D: Description of Value for Money Analysis in Applied Public Finance
Appendix E: Social Investment and Entrepreneurship Concepts
Appendix F: Development Impact Bonds
About the Author :
Jesse Hajer is an assistant professor in the Department of Economics and Labour Studies program at the University of Manitoba.
John Loxley was a professor in the Department of Economics at the University of Manitoba and a Fellow of the Royal Society of Canada.
