A diagnostic framework for social impact bonds in emerging economies

Abstract

A social impact bond (SIB) is a new type of outcome-based social investment mechanism for enterprises operating in the social economy. They have grown across the developed world, yet its complexity may prevent from fulfilling their promises. This is particularly the case when SIB-pertinent regulatory frameworks, actors and social problems are ill-defined as in the case of emerging economy contexts. In this paper we ask, how can policy agents better identify, prioritize and weight social issues in the early design of a social impact bond? We tackle this issue by applying design methods in the co-development of a SIB diagnostic framework for emerging economies. This is both a conceptual and an actionable artifact. As a conceptual framework, it provides a holistic picture of the contextual circumstances influencing the emergence of a SIB. As a policy tool, it allows policy agents to assess and prioritize social issues and target groups and subsequently guiding policy decisions regarding investment allocation on social economy enterprises.