Social Policy Bonds: the outlook for 2019

After about thirty years in the public arena, how is the Social Policy Bond concept faring? Not that wondrously, to be frank. As far as I'm aware, no Social Policy Bonds as I conceived them have ever been issued. The Financial Times, though, does tell us that more than 100 Social Impact Bonds have been launched across 24 countries, raising $400m. SIBs are a 'lite' version of Social Policy Bonds. The main difference between them and Social Policy Bonds is that they are not tradeable which, in my view, greatly diminishes their scope and opens them up to favouritism, gaming and manipulation. I've had no involvement with SIBs and have written before in this blog (here, for instance), and more definitively here and here, about why I am ambivalent about them.

Nevertheless, via SIBs, the idea of rewarding better performance is making tiny inroads into the public sector; that is, into the achievement of social goals. This feature, so long a feature of the private sector, is now being deployed to help solve social problems, though in very limited circumstances. I'd be more optimistic if this small change were being used to do something other than favour existing bodies in pursuit of narrow goals, but I suppose we should be grateful that there are some steps, however tentative, in the right direction.

Frankly, I don't see much else to be positive about where policymaking is concerned. There's little in the way of constructive dialogue, and much in the way of Manichaean name-calling. Take immigration: it's at least arguable that immigration reduces wages and raises housing costs. It has benefits of courrse, also, but too often people trying to discuss the downsides are dismissed as xenophobes or worse. There's a genuine question too, over whether national governments should put the interests of their own citizens over those of would-be immigrants. But these questions can hardly be raised, such are our rancorous politics. The broader problem is that the determinants of the policies we make are determined primarily by ideology, emotion, personality, televisual footage, and sound-bites.

Anything except outcomes, in short. And that gives me grounds for tentative optimism. Our current ways will self destruct. They are unsustainable. Out of the rubble, it's possible - just - that we shall target and reward the achievement of social and environmental outcomes. I mean long-term outcomes that are meaningful to ordinary people, rather than the narrow short-term goals that characterise corporations, financial traders, billionaires and, these days, politicians. Such a trend is unlikely to begin in the year 2019, but it's possible. If it were to occur, then we might also give priority to achieving our goals cost-effectively. At that point Social Policy Bonds, in their full tradeability, could step onto the stage and at last begin to play their role.