Abstract
The United Kingdom is pioneering a new model for the delivery of public services, based around the device of a social investment market. At the heart of this social investment market is an innovative new financial instrument, the social impact bond (SIB). In this paper we argue that the SIB promises (partial) solutions to four aspects of the present multifaceted crisis: the crisis of social reproduction; the crisis of capital accumulation; the fiscal crisis of the state; and the crisis of political legitimacy. In this sense, we conceive the social investment market as a crisis management strategy. We draw on evidence from the world’s first SIB, the Peterborough SIB, launched in 2010, as well as from other SIBs, in order to assess the extent to which the social investment market delivers on its four promises. In doing so, we argue that the crisis of neoliberalism and the social investment market are not only in historical correspondence, but in a relation of causality to one another. In developing this argument, this paper contributes to contemporary theories of neoliberalism by investigating how concrete state developments and societal restructuring is being advanced around the idea of linking marketization with progressive social change. It also supports critical practitioners by offering a theoretical lens to identify the contradictions of this increasingly popular policy approach.
Highlights
A social impact bond (SIB) is an innovative new type of financial instrument, whose purpose is to align the interests of the commissioner of a public service, the providers of that service, and financial investors who fund the service and profit if it meets target outcomes
Did the Peterborough SIB stimulate an innovative response to the problem of recidivism? Did it ease demands on the public purse? Did it generate financial returns for investors? And – – might the project have contributed to a relegitimisation of capitalism? We focus on the Peterborough bond because its status as the first such bond means that it is often treated as a benchmark
We have argued that neoliberalism’s crisis and the social investment market’s rapid expansion over the past decade represent more than a historical convergence, but rather stand in a causal relationship
Summary
A social impact bond (SIB) is an innovative new type of financial instrument, whose purpose is to align the interests of the commissioner of a public service (usually the state), the providers of that service, and financial investors who fund the service and profit if it meets target outcomes. Government White Papers, Bills and Acts followed, culminating with the launch, in 2010, of Big Society Capital, the UK’s ‘social investment wholesale bank’, and, later in the same year, the Peterborough SIB, the world’s first social impact bond (Dowling and Harvie 2014; Harvie, 2019).
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