Rebecca Grimwood: The challenges of financing social services through Social Impact Bonds: Lessons from New Zealand
Around the world, governments have become increasingly intrigued by the possibility of harnessing the private ‘impact investment’ market to finance the delivery of social services. Social Impact Bonds have received particular attention and have been implemented in over 20 countries. Enabling government to repay investors upon the achievement of agreed social and fiscal outcomes rather than service outputs, Social Impact Bonds are seen as a way to catalyse ‘innovation’ in the social services sector. But there are significant operational challenges that attend these efforts. This paper focuses on the fraught implementation of New Zealand’s Social Impact Bond pilot program to identify general lessons for practitioners.
Tom Baker: Investable poverty
The management of poverty is undergoing significant changes with the rise of social investment states. In this context, we examine how governmental concern about the long-term public cost of poverty is increasingly modulating the selection, sequencing and targeting of interventions that seek to manage poverty. Using examples drawn from the management of homelessness in Anglo-America, we outline a research agenda related to the objectification, economisation, and subjectification of ‘investable poverty’. These emergent developments at the intersection of social investment and poverty management invite social scientists and others to rethink where, when and how poverty management occurs.
Louise Humpage: Will payment-by-performance improve Māori outcomes? Whānau Ora commissioning agencies and social impact bonds
The National-led government experimented with payment-by-outcomes models in social services, assuming stronger financial incentives and private investment were necessary to improve social outcomes. This paper examines two such models: 1) the commissioning agencies that make funding decisions on behalf of the state as part of a broader Whānau Ora strategy and receive performance payments if certain outcome levels are achieved Māori families; and 2) the social impact bond trials that involve for-profit organisations funding mental health services for the unemployed and attempts to reduce youth reoffending, while non-government organisations deliver the services needed. Although not explicitly targeting Māori, the sites for and focus of these trials mean Māori are disproportionately targeted. Service providers receive performance payments and funders receive returns on investment if outcomes are significantly improved. Drawing on government documents and independent reviews, the paper qualitatively analyses the costs/benefits associated with these new ways of delivering social services, as well as practical issues of implementation. The Whānau Ora commissioning agencies demonstrate more potential to improve indigenous peoples, given they offer greater level of indigenous control over the funding process and given significant problems with the bond trials, but there is no evidence that payment-by-outcomes is effective in either case.
Pekka Pennanen: Social Impact Bonds in Finland
One of the latest social innovations for the realization and funding of welfare services is Impact Investing and one of its form, Social Impact Bond (SIB). In the SIB-model, private or institutional investors invest in welfare services and take financial risk. SIB arrived in Finland as a process of several coincidences. The application of the new model as part of the welfare service provision in Finland is still fairly limited. However, the upcoming projects are larger in scale and budget than those implemented so far. My study reveals four objectives and four methods that the Social Impact Bond combines. The first objective is prevention of social problems. The second is improving the productivity and efficiency of social services. The third objective is better services, and the fourth is to reduce the budget deficit. These objectives can be achieved by applying the model-related methods. The first method is performance measurement and enhancing public sector effectiveness. The second method is increasing cooperation between different sectors. The third method is buying results, and the fourth is transferring the financial risk to private investors.
Each presentation will be allocated 20 minutes. Additional time for questions and discussion will be available in each stream.
