Social Service, Private Gain: The Political Economy of Social Impact Bonds

Review\n"This book is a serious advance in state-of-the-art research on Social Impact Bonds because of its global focus and critical theoretical perspective. The authors find SIBs do not deliver on their three claims of increasing resources, promoting more efficient and better quality programs, and expanding the social service sector. The ‘altruistic’ nature of some SIB investors does not improve upon the problems generally found with information and power asymmetries in government contracting." -- Mildred E. Warner, Professor of City and Regional Planning and Global Development, Cornell University\n"Social Impact Bonds are one of the latest instantiations of financial innovation and for more than a decade evangelists have been extolling their virtues. Jesse Hajer and John Loxley’s comprehensive and systematic assessment of the evidence provides an important and long-overdue corrective." -- David Harvie, Centre for Philosophy and Political Economy, University of Leicester\nThe 2008 financial crisis and its subsequent economic impacts generated a challenge for national and regional governments across the world. From this economic ruin, the Social Impact Bond (SIB) was born as an alternative mechanism for government procurement and delivery of social public services.
Social Service, Private Gain examines the evolution of SIBs, how they work, their theoretical motivation, and their global proliferation. The book critically assesses the potential of SIBs to constructively contribute to solving the multifaceted social challenges emerging from a context of entrenched and growing inequality. Claiming to bring incremental resources to the rescue, SIBs have taken up disproportionate space with new legislation, policy, subsidies, institutional supports, lobbyists, and "intermediaries" facilitating SIBs and thriving on their associated transaction costs. Drawing on mainstream and heterodox economic theory, practical case studies, and empirical data, Jesse Hajer and John Loxley generate new insights based on the limited but still suggestive publicly available data on SIB projects. Challenging the assumptions and narratives put forward by proponents of the model, they offer practical policy recommendations for SIBs and explain what the model tells us about the potential for transformational change for the better.