Social Policy Bonds: do they have a future?

Social Policy Bonds haven't made much progress in policymaking circles in the last few years. I'm not even sure that policymakers think any more in terms of outcomes than they used to. But I am still optimistic that Social Policy Bonds, or something like them, will play some role in the future. Why?

First, because of a combination of an increasingly complex world, and the growing gap between policymakers and the people they are supposed to represent. Politicians and their officials have inherited a decision-making system that is, essentially, about rewarding interest groups, be they corporations, government agencies, organized labour, or lobbyists for environmental, ethnic, sexual or religious bodies. What's missing from this is buy-in from ordinary people, in our capacity as ordinary people, rather than members of an interest group. Without buy-in, the current political system will become increasingly vulnerable.

But our economy, society and environment are becoming ever more complex, which means that the wishes of most citizens cannot be satisfied either by submitting to the interests of sectoral groups, nor by centralized, top-down decisions about funding, activities, or instititutional structures. I think therefore that the decisions that government makes will increasingly have to be expressed and subordinated to outcomes that are meaningful to real people. Social Policy Bonds are one way of doing that: policymakers reward the achievement of social goals, regardless of how they are achieved. They relinquish their control over the 'how', because that is something that they don't do very well.

Underpinning this scenario is the increasing transparency about policy failures. Our political class knows less about how to achieve certain goals, but the public knows more about their failure to do so.

I see nothing to interrupt any of these trends. For that reason I think that somewhere down the track Social Policy Bonds may become a significant policy instrument.