With so many ideas of wildly varying quality in circulation, and being frustrated at Social Policy Bonds’ lack of visible progress, I thought I’d compile a brief resume of the concept, intended to show that it does have some respectability.
It’s 17 years since I first wrote about and spoke publicly about Social Policy Bonds. Since then it has had an unusual fate for an unusual idea. It has not been adopted anywhere, to my knowledge. But neither has it been dismissed outright. It tends to provoke initial enthusiasm amongst economists and decision makers, but then to be forgotten as day-to-day issues demand immediate attention. In 1991 it won an award for the Best Political Social Invention from the UK Institute of Social Inventions; now the Global Ideas Bank. In early 1997 I received a letter from Robert Shiller, Professor of Economics at Yale University, praising the Social Policy Bond idea, saying that it creates ‘a large interest group for the solution of important problems. The political and other effects of creating such an interest group could be incalculable.’ Professor Shiller later mentioned the concept in his book The New Economic Order. The first draft of my core text (see Social Policy Bonds at length, in the right-hand column) elicited extreme comments at both ends of the range from the two referees: one dismissed the text as an irrelevance. The other called the idea ‘original and ingenious’ and ‘a substantial contribution to debate about public policy’. My draft was rejected and my books have since failed to find a mainstream publisher.
In 1999 an essay on Social Policy Bonds was one of the three finalists at the inaugural US$25000 St Andrews Prize given by Conoco and St Andrews University, UK. I have given presentations on Social Policy Bonds at other fora, including the University of Cambridge, the Institute of Economic Affairs (London), and the Institute of Public Affairs (Melbourne). I have also discussed it with a former New Zealand Prime Minister’s Chief Policy Advisor.
In April 2002, I presented a paper on the Social Policy Bond concept to a joint meeting of the Agriculture and Environment Committees at the Organisation for Economic Cooperation and Development (OECD) in Paris. Delegates from most of the OECD’s member countries commented on the paper. These were mostly along the lines of ‘this is very interesting — but unworkable in practice.’ Perhaps one of the delegates articulated the deeper feelings of those present, who were overwhelmingly government employees: ‘if this gets adopted we'll all be out of jobs!’ My paper went no further at OECD.
Over the years quite a few private individuals have talked with me about issuing their own Social Policy Bonds, for projects as diverse as boosting voter registration, raising literacy in developing countries, reducing homelessness and developing open-source software. Sad to say, as far as I am aware all these discussions have come to naught. I am particularly disappointed because I believe Social Policy Bonds could improve greatly on current approaches to what I see as very grave concerns: climate change and nuclear proliferation. Common to both these challenges are (1) their complexity, which means they need adaptive, diverse solutions, the precise nature of which cannot be known in advance; (2) their urgency and enormity; and (3) the failure of the current policymaking system to address them adequately.