Katz et al. Respond

We appreciate the opportunity to respond to the letter by Iovan and Lantz. We share their interest in exploring the potential of Social Impact Bonds (SIBs) to contribute to public health and believe that it is important to engage a variety of perspectives at this relatively early stage in their diffusion.

As part of this discussion, and as SIBs begin to take hold in a range of jurisdictions, researchers have pointed to a need for “critical and independent consideration” conducted at arm’s length from organizations focused on SIB development.^1(p74)

Although reports from SIB-focused organizations contain a wealth of information, the negatives they raise often relate to implementation challenges rather than fundamental questions about the mechanism itself. As many researchers have pointed out, the overarching narrative promoted by social finance and SIB-focused organizations has been one of “win-win”—for governments, for investors, for not-for-profit organizations, and for communities.^2–5

In their letter, Iovan and Lantz are primarily concerned with countering arguments that call into question one of the pillars of the “win-win” narrative—the potential for SIBs to marshal additional net resources to improve population health.^{1(p71),6(p16)} In their article on SIBs,⁷ they concentrate on identifying and overcoming implementation challenges. As such, and perhaps understandably, they rely heavily on literature supportive of SIBs, including literature associated with organizations focused on SIB development.

Our work, however, addresses a different set of concerns. We set out to identify and explore critical reflections related to what SIBs as a funding mechanism stand to accomplish in aggregate and in the long term. Our goal was not to reach a conclusion on this question but rather to compile the context, concern, or simply cautions researchers have entered into the record. As a result, we focused on a different slice of the literature, the critical explorations of SIBs emerging from myriad disciplines such as social policy, public administration, political economy, geography, and social justice.

Those looking to assess whether SIBs are a good idea for their purposes—or a good idea at all—are encouraged to read Iovan and Lantz, other scholarship sympathetic to SIBs, and materials that come directly from SIB-focused organizations. We also encourage them to examine the growing body of scientific work that gives “critical and independent consideration” to both the SIB funding mechanism and the discussions that surround it.¹ We share selected examples in the box on this page.

BOX 1. Selected Peer-Reviewed Journal Articles That Raise Questions About Social Impact Bonds: 2013–2018.

2018

Berndt C, Manuel W. Market, metrics, morals: the Social Impact Bond as an emerging social policy instrument. Geoforum. 2018;90:27–35.

Edmiston D, Nicholls A. Social Impact Bonds: the role of private capital in outcome-based commissioning. Jnl Soc Policy. 2018;47(1):57–76.

Fraser A, Tan S, Lagarde M, Mays N. Narratives of promise, narratives of caution: a review of the literature on Social Impact Bonds. Soc Policy Adm. 2018;52(1):4–28.

2017

Dowling E. In the wake of austerity: Social Impact Bonds and the financialisation of the welfare state in Britain. N Political Econ. 2017;22(3):294–310.

Maier F, Barbetta GP, Godina F. Paradoxes of Social Impact Bonds. Soc Policy Adm. 2017; Epub ahead of print.

2016

Arena M, Bengo I, Calderini M, Chiodo V. Social Impact Bonds: blockbuster or flash in the pan? Int J Public Admin. 2016;39(12):927–939.

Cooper C, Graham C, Himick D. Social Impact Bonds: the securitization of the homeless. Account Organ Soc. 2016;55:63–82.

Rowe R, Stephenson N. Speculating on health: public health meets finance in ‘health impact bonds.’ Sociol Health Illn. 2016;38(8):1203–1216.

Saltman K. The promise and realities of Pay for Success/Social Impact Bonds. Educ Policy Anal Arch. 2016;25(59):1–16.

2015

Kish Z, Leroy J. Bonded life: technologies of racial finance from slave insurance to philanthrocapital. Cult Stud. 2015;29(5-6);630–651.

Lake R. The financialization of urban policy in the age of Obama. J Urban Aff. 2015;37(1):75–78.

2013

Joy M, Shields J. Social Impact Bonds: the next phase of third sector marketization? Can J Nonprofit Soc Econ Res. 2013;4(2):39–55.

McHugh N, Sinclair S, Roy M, Huckfield L, Donaldson C. Social Impact Bonds: a wolf in sheep’s clothing? J Poverty Soc Justice. 2013;21(3):247–257.

Warner ME. Private finance for public goods: Social Impact Bonds. J Econ Policy Reform. 2013;16(4):303–319.