Are social impact bonds an innovation in finance or do they help finance social innovation?
Abstract
Outcomes-Based Commissioning (OBC) – for example, Pay for Success (in the US) or Payment by Results (in the UK) – has been suggested as a way to provide ‘more’ social services for ‘less’ public resources. Using data from the Social Finance UK Database, this paper evaluates whether Social Impact Bonds (SIBs) align with the theoretical predictions of social innovation. The results show limited evidence that SIBs facilitate private capital injections into social goods production but do contribute to parts of the social innovation process, such as piloting and scaling.