08 November 2009


My correspondent (see previous post) goes on to ask some further questions:

If the opportunity exists to commercialise social goals, who are the players?

  • Who are the players for it?
  • Who are the players against it?
...players for it...? Anyone sincerely interested in efficient solution of social problems. I'd have thought philanthropists or their journals would be interested, but not one has ever responded to my emails.

...players against it...? Plenty, especially government agencies. In the epilogue to my book I relate this episode: "In April 2002, I presented a paper on the bond concept to joint meeting of the Agriculture and Environment Committees at the Organisation for Economic Cooperation and Development (OECD) in Paris. ... 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 OECD paper went no further. "

What would they use such platform for? How can be made sure that it does not back fire and turn into an accessory to pursue unintended/adverse goals?

I assume that philanthropists or public sector Social Policy Bond issuers would aim to achieve social and environmental goals about which there is a wide consensus. Perhaps along the lines of avoiding of catastrophe, or achieving basic minimum levels for such things as literacy, nutrition; or maxima for environmental pollution, unemployment, crime. As for the second question: I'd have to assume that (1) people or institutions would not want openly to declare themselves in favour of anti-social goals: remember the Social Policy Bond concept is entirely transparent; redemption terms are written into each bond issue and available to everyone, and (2) there is sufficient existing sanction against illegal acts. I do address the possibility of negative-but-legal actions in my book. (See link in right-hand column.)

Whose economic or political interests are supported by the securitisation of social goals, and whose big toe would it step on?

Similar answer to players for and against it, above. Also, obviously the finance industry would benefit from securitisation. I'd hope that sincere representatives of disadvantaged people or countries would be most interested in the concept.

At what point would the platform become a competition and to whom?

I envisage Social Policy Bonds would be a bit like equities: there would be competitive bidding for the bonds at flotation and at all times thereafter, but holders would have an interest in co-operating with each other to help achieve targeted social goals after purchase.

"Are there any forerunners of this concept, and if yes how did they go. What did they achieve, and what mistakes did they make?"

I don't think so. That's one reason I think Social Policy Bonds need careful trialling, discussion and refinement before they can be applied to larger issues. Sadly, this hasn't happened yet.

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