Who can issue Social Policy Bonds?

Who can issue Social Policy Bonds and when would Social Policy Bonds be better than alternatives?

Social Policy Bonds could be issued by anybody who genuinely wants to finance the achievement of social or environmental objectives.

• Government could issue Social Policy Bonds when it knows what it wants to achieve, but does not know how best to go about it;
• Philanthropic groups or individuals could issue Social Policy Bonds when they have a particular interest in a social problem that is being inadequately addressed.

When would Social Policy Bonds have the most marked advantages over conventional policy methods? There are four main criteria:

• The objective is fairly broad. So, for example, it is better to target broad health indicators like longevity, rather than the rate of heart disease. It is better to reduce water pollution in a river than the presence of one particular pollutant. This is because a bond regime should be free to channel resources where they will do the most good.
• There should be a reliable numerical measure (or combination of such measures) to target and it must be inextricably linked to what we want to achieve .
• Relationships between the problem we are trying to solve and its causes are complex, uncertain or changing constantly.
• Existing policies, if they have been tried at all, are ineffective or inefficient.