Post number 1397, and as good a time as any to discuss policymaking and Social Policy Bonds. On both counts, I think the outlook is gloomy. I'd be less concerned about the fate of the bonds if there were any sign that policymaking were becoming more responsive to ordinary people's wishes and well-being. I don't see such signs, either in the country in which I'm currently based (the UK) or in the wider world. Government agencies and large organisations of every sort - corporations trade unions, universities, religious bodies, charities, etc - work hand-in-hand to further their own goals, which are very often irrelevant to the interests of the people they are supposed to represent, or actually in conflict with them. This divergence is replicated at the supra-governmental level.
The results of this divergence are apparent and disconcerting:
- increasing inequality of income and (especially) wealth within countries, leading to a loss of faith in government in democracies and autocracies alike,
- extreme polarisation of political factions,
- environmental disasters, in the seas, rivers, climate etc, and
- increasing fears of a nuclear exchange.
Decades of all politicians' ignoring the wishes of ordinary people have led to a pervasive nihilism and learned helplessness as nobody thinks they can do anything to improve things at any level above the local.
The aim of Social Policy Bonds is to inject market incentives into the solution of our social problems. But the first essential element was to articulate and prioritise society's goals. Free, competitive, markets have been manipulated and undermined by big organisations, including government regulatory agencies, but even more crucially, there's little discussion of, or priority given, to society's wishes. Vague suggestions that more economic growth will solve all our problems are made, though even given the narrow definition of growth, as measured (usually) by GDP, the poorest in most western countries have benefited little from decades of it. Politicians, prisoners of their paymasters or their ideology, just don't identify with ordinary citizens.
Realistically, there's almost no chance that anything like Social Policy Bonds will be issued in the near future. There has been some interest in the non-tradeable version (with which I have no involvement) known as Social Impact Bonds or Pay-for-success Bonds, but nobody's made the leap to making them tradeable, which I regard as essential to the achievement of society's goals. My main worry now is about a nuclear exchange. The taboo against threatening use of nuclear weapons has recently been broken; the taboo against their use looks fragile. The other huge challenges - environmental and social - remain, but a sustained absence of a nuclear exchange is a necessary condition for addressing them. My forlorn hope is that some combination of government, NGOs, philanthropists and ordinary people, raise funds that would provide meaningful incentives for people to actually bring about (not simply to 'work towards') world peace. Applying the Social Policy Bond concept to that goal is my suggestion, though I'd welcome any gesture in that direction.
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