A question recently asked of me: once Social Policy Bonds have been issued, how will people working toward the targeted goal be rewarded in proportion to their contribution to the goal's achievement?
The perceived problem is that some people working toward the goal may not own any bonds, so would not gain anything from their efforts. My thinking is that the bonds would lead to the tacit or explicit creation of a new sort of organisation, comprised of bondholders, and possibly with no fixed structure or composition. This body's raison d'etre - its sole objective - would to achieve the targeted goal as quickly and efficiently as possible. Remembering that the social or environmental goals best suited to a Social Policy Bond regime are those with a decades-long perspective, the body of bondholders would, as a priority, try to identify those activities, organisations or individuals that appear to be the most promising. Existing organisations working to bring about nuclear peace, for example, might try to convince the body of bondholders that they deserve some of the bondholders' funds. They would of course be competing with other existing or new organisations for those funds. So, those working efficiently to achieve the targeted goal would benefit indirectly from the bonds; bondholders would contract some of the work necessary to achieve nuclear peace to these organisations, who might in turn subcontract out some of that work, and so on. Incentives would cascade down from the bondholders to whomever does the actual work, who need not, and probably would not be bondholders themselves. The bonds, in short, would supply incentives to create an efficient payment system, which is just another aspect of achieving the targeted goal as quickly and efficiently as possible.
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