Abstract
Social impact bonds (SIBs) have emerged as one of the most innovative financial instruments designed to support the social service sector in the delivery of innovative social programs. Despite the growing interest of academics and practitioners in SIBs, the debate appears polarized around a series of recurrent aspects, and only a limited number of studies have sought to understand the risks and motivations related to similar initiatives. Using an exploratory approach based on a mixed-method grounded theory methodology, this study analyzed the results of 12 questionnaires that asked experts about their experiences and perceptions in SIB project development and implementation. The study identified and assessed three main groups of motivations, critical success factors, and risk factors by focusing on the private-sector SIB actors with the aim of understanding their motivations and their perceived main success drivers and risk factors. This work contributes to the knowledge on the conditions for attracting private sector actors and supporting policymakers in the development of new SIB models. The findings could facilitate the development of risk management practices for the purpose of stimulating the participation of private actors in SIB initiatives.
Highlights
Social impact bonds (SIBs) have emerged as one of the most innovative financial instruments aimed at capturing new needs in the social service sector by boosting innovation and quality [1]
Conceived as a cross-sector collaboration model designed to fund social programs by creating a shared vision between the public and private sectors [2,3], SIBs are a mechanism for leveraging private investment in social interventions through “optimal” risk-sharing and innovative design in the delivery of public services by the private sector [1,4,5]
From a contractual point of view, SIBs differ from payment by results (PbR) contracts in the participation of investors who provide the working capital for the implementation of programs by receiving a return depending on the achievement of the established outcomes [6,7]
Summary
Social impact bonds (SIBs) have emerged as one of the most innovative financial instruments aimed at capturing new needs in the social service sector by boosting innovation and quality [1]. The debate appears polarized around a series of recurrent aspects [10], and only a limited number of studies have sought to understand the risks and motivations [7,8,11,12,13,14] related to similar initiatives Given these considerations, this study aimed to understand the main motivations (MOs), critical success factors (CSFs), and risks (RIs) in SIB projects. Increased knowledge of the main motivations (MOs), critical success factors (CSFs), and risks (RIs) in the SIB context can facilitate our understanding of how they can be addressed during both the design and implementation stages, identify possible sources of project failure, and even provide guidance for how appropriate guidelines and risk management processes might be developed. The “Conclusions, Implications, and Future Research Directions” section summarizes the main findings and provides a brief discussion of the practical implications of the study by providing suggestions for further research
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