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CHAIR « FINANCE FOR INNOVATION » NL #2 - Publications

30 April 2019
Social Impact Bonds : 2 general audience articles

Vincenzo Buffa, PhD candidate of the Chair has recently written two non-academic articles about Social Impact Bonds. The works concern two reading notes on remarkable scientific articles that investigate some major aspects of SIBs.

The first one consists of a review of the emerging SIB literature on the academics and practitioners’ world. The second one analyses the impact of the presence of private capitals on the SIB’ functioning.

Vincenzo Buffa, PhD candidate of the Chair has recently written two non-academic articles about Social Impact Bonds. The works concern two reading notes on remarkable scientific articles that investigate some major aspects of SIBs.

The first one, published by Tan et al. on 2018 consists of a review of the emerging SIB literature in the academic and practitioner’s world.

The authors identified three distinct narratives that characterized the academic and practitioner discourses about Social Impact Bonds. The two first narratives approach the development of SIBs in a positive view: the components of the “public sector reform” narrative see a possibility to push forward the public action by the alienation of the private and public interests on the contracting process based on outcomes delivering. The “private financial sector reform” narrative, supported by the financial and philanthropic sector, proposes the SIB mechanism like an opportunity to develop “impact first” markets. These first two narratives are strictly connected and offer a ‘win-win’ representation of SIBs.

The third “cautionary narrative” challenges the dominant “win-win” description by highlighting potential risks related to the SIB functioning. They suggest that SIB model can subjugate the political decision-making process to the interests of the financial market, thus diverting civil society organisations from their social purpose.

>> More informations here

The second article reviewed, published by Edmiston and Nichols on 2018, analyse the impact of the presence of private capitals on the SIB’ functioning.

The second article reviewed, published by Edmiston and Nichols on 2018, analyse the impact of the presence of private capitals on the SIB’ functioning. They propose a deep description of the development and functioning of four Uk SIB’s. The findings of the authors suggest that the introduction of private capital in outcome-based commissioning has some positive effects, especially by shifting the financial risk from the service provider to the investors. Nevertheless, SIBs seem to have a number of unintended effects on service providers. For example, some third sector stakeholders, interviewed by the authors, felt that the degree of micro-management built into the SIB was actually reducing their flexibility to autonomously pursue their social mission. The paper concludes by some general consideration about the risks and the opportunities related to the social impact bonds for the public service reform in the UK. They point out that without an effort to understand the effects of this mechanism of private financing of social service, the public authorities risk to pay high financial costs, without any certainty of achieving the benefits supposedly attached to the Social Impact Bond model.

>> More informations here


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