Browsing by Subject "finance"

This study explores a recently emerged financing innovation, social impact bonds (SIBs). The model of social impact bonds is essentially a financing mechanism with an objective to gather private capital to fund prevention-focused social programs. The model functions by connecting multiple actors into an arrangement, in which each counterparty is incentivized to pursue successfully intervening a social problem. The objective of this study was to synthesize the economic evidence documented in the literature in order to gain a realistic into the feasibility of the SIB model for targeting social welfare issues. The primary research question was: What is the cost-effectiveness and feasibility of SIBs compared to alternative social sector expenditure of public funds? Answers to the research question were sought through a systematic literature review. The search was restricted to English-language papers published between 1 January and 31 March 2019. Both academic papers and grey literature reports were included. A defined set of databases was searched using the search terms social impact bonds AND (cost OR effectiveness OR finance). The titles and abstracts of the identified papers were screened. A paper was excluded from further review, if it did not refer to SIBs or address the primary research question. Of the 520 papers screened, 27 fulfilled the criteria for full-text review. In the full-text review, a paper was excluded, if it was not considered to address the primary research question by providing a systematic approach to the economic aspects of SIBs. A qualitative systematic narrative was created of the finally selected 3 studies. The three selected studies approach from somewhat different angles. Liebman (2011) views SIBs as a potential tool to improve performance of the government agencies and to increase social sector innovation. Goldberg (2017) sees SIBs as a channel to gather financing for evidence-based social programs. Pauly and Swanson (2017) are slightly sceptical about the additional value created by the SIB model and consider the feasibility of SIBs as a financing mechanism strongly context-dependent. These qualitative results indicate that the application of the SIB model has the potential to result in improved social sector performance. While the feasibility of SIBs is viewed to be context-dependent, they are evaluated to lead to improved overall social outcomes by introducing an approach to manage with social problems from the perspective of a longer time horizon.