Social Policy Bonds blog: The private sector can issue Social Policy Bonds

13 July 2005

The private sector can issue Social Policy Bonds

Governments are unlikely to be the first issuers of Social Policy Bonds. Doing so would mean they relinquish some of their power. They would be surrendering their power to dictate how specified social objectives shall be achieved. They would still be specifying what these objectives are, and they would still be raising, through the tax system, the funds that would be used to achieve them, but the decisions about how to achieve them would, in effect, be contracted out to the private sector. These contracts would be tradable, via the bond mechanism. But governments are not known either for their willingness to surrender power, nor for their deployment of innovative financial instruments.

So I now see the private sector as being the more likely first issuers of Social Policy Bonds. I have prepared a handbook using the example of female literacy in Pakistan, suggesting how this might be run. (This is a pdf file of about 15 pages.)

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Social Policy Bonds in the media

13 June 2018: my short article Make Social Impact Bonds Tradeable, appears on the website of Alliance, a magazine for philanthropy and social investment.

25 May 2018: a short article on Social Policy Bonds and their possible application in India, appears on Market Express (India). It is by Dr Ashok V Desai and titled Incentivizing welfare.

9 October 2015: An article by Greg Bearup on the genesis of the Social Policy Bond idea, and application of a version of it in Australia appears in the Weekend Australian Magazine. (The article can also be downloaded as a pdf from here.)

October 2013: Professor Robert Shiller of Yale University, is named as one of the three winners of the 2013 Nobel Prize in Economics. His Nobel Prize lecture (pdf) delivered on 8 December, mentions Social Policy Bonds. Professor Shiller has for many years encouraged my work on Social Policy Bonds, beginning in late 1996 when he sent me this letter.

3 May 2012: An audio talk by Nobel Prize winner Professor Robert Shiller at the London School of Economics, in which Social Policy Bonds are briefly mentioned, is available here.

18 April 2012: Robert Shiller, Professor of Economics at Yale University, mentions Social Policy Bonds in his new book Finance and the Good Society. He also mentions the concept in a Huffington Post article. It's the eighth of his Ten Ways Finance Can Be a Force for Good in Society, and is also mentioned in a short profile piece about Professor Shiller.