Risk aversion rules

The Economist writes about India: 

Bureaucracy runs on risk aversion. Officials worried about anti-corruption bodies award contracts to the lowest bidder, despite having the discretion to weigh up other factors. They splurge on top-tier consultants because it gives them cover for their decisions. A bureaucrat who takes a risk and produces a terrific outcome gets no reward. Why can't India's government build a decent website?, the 'Economist', 28 June 2026

Not much has changed since I began advocating Social Policy Bonds as a means of targeting outcomes. Politicians focus on institutional structures and funding. Bureaucracy, in India and elsewhere, prioritises process. Meantime public political debate is taken up with public images, sound bites, vague promises and identity. The result is government that is inefficient and ineffective, in that it prioritises narrow, short-term goals, while refusing to address urgent, long-term challenges such as budget deficits, environmental depredations, health and violent political conflict. One result is that the gap between government and people is widening in countries democratic or not, the world over.

The gap would narrow if more people participated in policymaking. One reason, I believe, why we're not very interested is that policy is formulated in terms that are difficult to relate to outcomes that are meaningful to natural persons, as distinct from corporate bodies. Policymakers appear to concern themselves with decisions about funding for different government agencies, dispensing patronage to big business and other lobbies, presenting themselves in the best light ... almost anything, in fact, except outcomes that mean something to real people.

A government that issued Social Policy Bonds would, from the outset, have to concern itself with social and environmental outcomes. Its main role would be to articulate society's wishes regarding social and environmental outcomes, and to raise the revenue that would fund these outcomes. Unlike most of the current determinants of policy, the language of outcomes and the necessary trade-offs between them is comprehensible to people other than politicians, bureaucrats, lawyers and public relations experts. For that reason, more people would be drawn into policymaking - an end in itself, as well as a means toward getting greater public buy-in to the resulting policies.

Expressing policy in terms of outcomes, and the consequent closing of the gap between public and policymakers would be one valuable benefit arising from a Social Policy Bond regime. The other would be the much greater efficiency in achieving social and environmental goals once the market, rather than a handful of politicians, decides who shall achieve these goals, and how they shall be achieved. 

 

World Peace Bonds - a guide for philanthropists

 This article was commissioned by Billionaire. I am uncertain as to whether it's been published

Incentives for peace: World Peace Bonds

World Peace Bonds are a way in which the market’s incentives and efficiencies can be channelled to those people who are most successful at reducing conflict. Philanthropists could get the ball rolling by contributing to a fund that would be used to redeem non-interest-bearing bonds only when world peace had been achieved and sustained for, say, thirty years. The aim is to encourage diverse and adaptive approaches to reducing or eliminating wars and civil wars. The bonds would reward the achievement of the peace goal, regardless of who achieves it or how they do so. The redemption fund could be swelled by philanthropists’ undertaking to match donations from others, including NGOs and the public.

The bonds would be issued on the open market. They’d fetch a fraction of their redemption value, because the peace goal is necessarily remote. But the bonds would be tradeable; their value would rise and fall as the market sees achievement of peace as more or less likely. Investors in the bonds wouldn’t have to wait for the bonds to be redeemed before benefiting from holding them: they’d do what they could to achieve peace, see their bonds rise in value, and then sell their bonds to those best placed to take the next steps. The bonds would always be in the hands of those who think they can do best to advance the peace goal quickly and at least cost. They’d form a tacit coalition, of variable composition, with the sole aim of maximising the reduction of conflict per unit outlay.

A long-term perspective, sadly missing from many of today’s peace-building activities, is essential. A lasting peace is more likely to be a just peace; the ceasefires and truces of today do little more than allow bad actors to inflame resentment and re-arm. Investors, knowing that sustained peace will be rewarded, would research, experiment and refine their peace-building initiatives, would concentrate on the most promising of these, and – something that doesn’t always happen today – would terminate those that achieve little.

The long-term outlook would encourage a wider range of peace-building initiatives than those that even well-meaning politicians undertake today. Investors in World Peace Bonds could lobby or work with governments to, say, change and enforce laws that make wars at home or overseas a less likely prospect. They could finance sports matches between potential protagonists, promote anti-war programmes on TV, or set up exchange schemes for students and schoolchildren. They could try to cajole the financial supporters of conflict into redirecting their funds along more edifying lines. They could offer poor countries different forms of aid, including education and scientific aid, and measures aimed at enlightening populations. They could co-opt, bribe, coerce or otherwise undermine those who foment conflict. They could facilitate liaisons between people of all ages of different ethnic or religious groups. The crucial point is that bondholders have more freedom and incentive to explore and carry out such diverse initiatives than governments or other international bodies, and more incentive to focus only on those that most promising.

Of course, there are many hard-working employees of existing public- and private-sector organisations who are already trying to achieve peace. But they typically have little funding or are not paid by results. Investors in World Peace Bonds would reward the most efficient of these bodies, allowing them not just to raise the salaries of their existing employees, but also to attract more expertise and more resources.

Powerful people in governments, religious institutions or militant organisations might resent the targeting of such objectives by external agencies in this way. They might not be swayed by bondholders’ efforts to influence them – but many of their followers will be. As well, under a World Peace Bond regime they would have to openly declare their opposition to peace itself. It is precisely this focus on the outcome of peace -- rather than activities or institutions -- that would help mobilise and strengthen the coalition working to achieve it.

Humankind’s ingenuity is boundless but too much of it, reacting rationally to the incentives currently on offer, is channelled into such socially dubious activities as advertising dogfood or – God help us! – technical analysis. Actually, it’s worse than that: the incentives now are for those few who have acquired power – including psychopaths, kleptocrats and fanatics - to do whatever they can to retain and extend it, and if that means they must inflame conflict then they will do that. The result is the world we see today: a world wherein sixty major armed conflicts rage; killing, maiming, starving and making millions homeless. And all the while there looms the possibility of nuclear catastrophe.

In such a world, the wishes of the billions of people who don’t want to live in a world of conflict are too diffuse to prevail, and we cannot rely on politicians anywhere to change that. World Peace Bonds would bypass politicians and, by appealing to investors’ self-interest, could bring about the humankind’s most yearned for, but most elusive goal: the permanent elimination of armed conflict.

For more on applications of the concept, please see http://SocialGoals.com.

© Ronnie Horesh April 2026

Sleepwalking into nuclear war

 Antiwar.com describes the US military's latest brainwave: 

The Pentagon is reportedly drafting a new nuclear strategy that’s expected to emphasize the use of tactical nuclear weapons to give the president more “options” in a potential nuclear conflict. The strategy... is being drafted by the Pentagon’s policy chief, Elbridge Colby, who has for more than a decade called for the US to develop additional capabilities to fight a “limited nuclear war.” The idea would be to shift the US nuclear strategy away from the focus on using strategic nuclear weapons to wipe out an adversary’s nuclear capabilities and focus more on the possibility of using smaller, tactical nuclear weapons in a “regional” conflict. Pentagon drafting new nuclear strategy..., Dave DeCamp, Anti-war.com, 9 August 2026

The logic is impeccable; each step can be fully explained by invoking the current situation and fears about what others might do. But the stakes now are impossibly high. It's surely worth trying something more radical than the processes that have led us to the brink of catastrophe. 

There are good, hardworking people working for organisations that have as their ostensible aim the ending of conflict at all levels: global, regional and local. But those best placed to know reckon we are closer than ever to nuclear conflict. The Pentagon's new strategy could take us even closer. We need to do things differently. 

Nuclear Peace Bonds could help halt the drift towards nuclear conflict, by putting in place a system that encourages and rewards people for researching, implementing and refining the most promising of such alternative approaches. The would inject the market's incentives and efficiencies into the achievement of nuclear peace, sustained for a period of at least thirty years. 'Nuclear peace' could be defined as a period during which the number of people killed within 24 hours by the detonation of a nuclear device is less than (say) 500. The bonds would reward those who achieve such a sustained period of nuclear peace, whoever they are and however they do so: only the outcome would be stipulated. 

As well as pursuing activities the exact nature of which we cannot anticipate, investors in Nuclear Peace Bonds could do things that cannot be done by existing organisations, constrained as they are by precedent, and their perceived need to maintain their existence and so satisfy the bodies that fund them. So, for example, in today's world, nobody would have any incentive to bribe people close to decision makers in politics or the military to advocate nuclear disarmament. Likewise, an existing body is unlikely to try to get religious extremists to tone down their rhetoric or take up golf, even if it believed that were the most efficient way of reducing the probability of nuclear conflict. The risk and consequences of exposure and backlash are too great for current institutions to bear. Holders of Nuclear Peace Bonds, however, would not be deterred from whatever actions they think most effective: funds to redeem their bonds could be held in escrow. Once nuclear peace had been achieved and sustained, their reward would be guaranteed. 

Investors in the bonds could operate in parallel with existing bodies. They might decide that some of their activities are worthwhile and channel more funding into the most promising of these. Or, as with the bribery example, they could pursue radically different approaches. The main point is that all the investors decisions would be entirely directed to sustaining nuclear peace at least cost. Their goal would be exactly congruent with society's, and their funding would attract resources and expertise away from some  well-rewarded activities of little social merit. Advertising dog-food or writing algorithms for high-frequency share trading are two examples; there are many others. 

The Social Policy Bond concept, of which Nuclear Peace Bonds are on application hasn't gone very far in the decades since I came up with it. A non-tradable version is now in use in about 25 countries, but it's inherently limited as a means for achieving long-term goals, for reasons that I've explained here and here. I still hope that my original concept will be deployed, as I don't think we are currently on track to meet such huge and urgent challenges as nuclear conflict. 

Everything is backwards...

 A quote attributed to Michael Ellner: 

Just look at us. Everything is backwards, everything is upside down. Doctors destroy health, lawyers destroy justice, psychiatrists destroy minds, scientists destroy truth, major media destroys information, religions destroy spirituality and governments destroy freedom. Michael Ellner

It's not true in every case, and it's not inevitable, but there's enough truth in it to be disturbing. And, while there are many idealistic doctors and lawyers, the majority become fully invested in their career and dependent on the goodwill of their governing body. And these bodies have, as their overarching goal, self-perpetuation, whatever their original ideals. All their ideals, activities, memberships and rules are subordinate to that goal.

Which is why I believe we should make policy as if these institutions do not exist. Under a Social Policy Bond regime, policy would be expressed in terms of verifiable, transparent outcomes, and any institutions that come into being as a result would have, as their sole focus, the efficient achievement of these outcomes. Such a regime would be ideal for those social and environmental goals for which:

• current policy is failing,
• a long-term view is essential,
• no obvious solutions exist, and
• a range of diverse, adaptive approaches is likely to be essential.

Sadly, there are many big, urgent challenges that satisfy all those criteria. For example, I've written about applying the Social Policy Bond concept to nuclear peace, climate change, and health. These policy areas would all benefit by, first, clarifying exactly what we want to achieve; most likely a set of subsidiary objectives all of which would have to be met before the targeted outcome would be deemed achieved. Second, by channelling the market's efficiencies and incentives into that achievement. What would happen then? With a guaranteed payout on success, investors would compete to bid for the bonds; collude, tacitly or otherwise, to bring about speedy achievement of the goal. This would entail research, experimentation and refinement of a range of possible approaches toward solving the targeted problem, with only the most promising of these approaches being pursued. A mosaic of diverse and adaptive approaches would be the most likely result. I believe a new sort of organisation would arise: again, it might not be a formal body, but its structure and composition, and all its co-ordinating activities would be entirely subordinate to achieving the targeted social or environmental goal. Thus, there would be an inextricable link between the objective of the organisation and society's targeted goal. 

'The ticks are winning': we need to focus on health outcomes

Jonathan Mingle and Sean Rameswaram discuss the tick problem in the US:  

Are we not fighting back against the ticks?

Not really. I mean, this is one of the surprising takeaways from my reporting is that we’re barely even trying. One way of understanding that is to think about two numbers. One number is 90 percent. 90 percent of vector-borne disease cases in the US are from ticks.

90 percent?

Yeah. And yet despite the fact that 90 percent of cases of vector-borne illness come from tick bites, if you look at what local city and county health agencies do in terms of vector control, 80 percent of what they do is mosquito control, and only about 10 or 11 percent of these local health agencies around the country do any kind of tick control. So why is that? It’s a familiar story in the public health world. It’s not enough funding or policy support for trying out, testing, and deploying new approaches to controlling ticks. The ticks are winning, Danielle Hewitt and Sean Rameswaram, 'Mother Jones', 1 August 2026

...Or a lack of incentives. This kind of mismatch between the a problem and the incentives devoted to solving it bedevils all policymaking in areas where existing institutions have no incentive to explore new approaches. It's rife in the field of health policy, where those in the profession have little incentive or capacity to think beyond their speciality, and so advise policymakers accordingly. 

Given the widespread, and justifiable, distrust of pharmaceutical companies, it would seem that this is the time to move towards rewarding those who achieve favourable health outcomes, rather than those who merely engage in activities purporting to deliver those outcomes. Those currently employed in healthcare are reacting rationally to the incentives on offer, to the detriment of our physical and mental health. And those incentives are to keep funding existing bodies and their approaches; as well, they encourage over-screening and over-diagnosis. 

It's time for a new approach. My suggestion is that rather than policymakers' focusing on the means by which they think good health can be achieved, they instead focus on targets for good physical and mental health, and provide incentives for people to achieve those targets. The Social Policy Bond concept, applied to health, would do this, and more: it would inject the market's incentives and efficiencies into all the processes necessary to improve a nation's health, regardless of the vested interests of the current service providers. A short piece on Health Bonds can be found here, and a much longer version, describing Tradeable Health Outcome Bonds is here. A bond regime would channel our scarce resources into the most efficient means of improving our health, including those currently neglected or not even considered by our current healthcare bodies. 

Health Bonds wouldn't stipulate how our health goals shall be achieved, nor who shall achieve them. This allows a broader approach. For example: if ticks are agreed to be a much bigger threat to health than mosquitos, then a bond regime would channel more resources into dealing with ticks rather than mosquitos. More broadly, our current narrow, short-term compartmentalised policy approach would not look into the positive health impacts of subsidising advanced courses for young drivers of motorbikes or cars. But holders of Health Bonds would look at such measures, investigate their possible health impacts, and make an informed decision as to whether any improvement they might bring to a population's health is worthwhile, compared to other possible interventions. 

Policymakers in general take the existing institutions, with their limited purview, as a given. An outcome-based approach, such as I envisage in a Social Policy Bond regime, would subordinate the composition, structures and all activities of institutions to the outcomes that policymakers target. For more on the new sorts of organisation that this approach would generate, please see here. 

Social Policy Bonds and price signalling

 One of the less obvious benefits of a Social Policy Bond regime arises from the price signalling of the market for the bonds. At flotation, the bonds would be auctioned, and difference between the sums raised at flotation and the total redemption value of the bonds would supply the market's best estimate of the cost of achieving the targeted goal at that time. This estimate would vary over time, depending on many factors including bondholders' performance in undertaking or financing goal-achieving projects. The market for Social Policy Bonds, then, as with all markets, plays a vital role not only in allocating resources but also in signalling to the bonds' backers the approximate costs of achieving social goals. The bonds' backers, that is, those who put up the funds for redeeming the bonds, could be in the public or private sectors: either way, this information is of great value. 

A competitive market for Social Policy Bonds would minimise the total cost of achieving a specified objective, as well as signalling it. More subtly, and more technically, it would also indicate the marginal cost of achieving further improvements. Say one million Crime Reduction Bonds issued by a local authority were to sell for $5 each. This would tell the issuing body that the present value of the expected maximum cost, including bondholders’ profits, of reducing the crime level from, say 50 to 40 units, would be $5 million. The local authority might then suppose that it could afford to be more ambitious, and aim for a further fall to 30 units. It could issue a million additional bonds redeemable when this new lower rate were reached. These would (probably) have an initial market value of less than $5, reflecting the (probably) diminishing returns involved in preventing crime. The point is that, by letting the market do the pricing of the bonds, the local authority would be getting an informed view of the marginal cost of its objectives. So if the bonds targeting the new level of 30 units were to sell for $4 each, then the maximum cost of achieving that objective would be $11 million, being equal to: $5 million (paid out when the level fell from 50 to 40 units) plus $6 million (paid out when the level fell from 40 to 30 units). The marginal cost of a 10-unit drop in crime would thus have been revealed to have risen from $5 million to $6 million. Should the local authority aim for a further fall to 20 units? Following such crime rate-targeting bond issues it would have robust information about the cost of doing so.

This is, of course, a simplified example and in fact the bond market would continuously update its pricing information. Say that new research, of the sort that might be stimulated by an initial bond issue targeting crime, suggested new ways of reforming or deterring criminals. Bondholders may, for example, have financed successful research into more effective reform programmes, or set up more appealing alternative lifestyles for especially hardened criminals. How would the market react to such developments? Once their effectiveness had been revealed, the value of all the bonds would rise. Instead of being priced at $5 and $4, the two crime reduction issues of the example might sell for $8 and $7. The total cost to the government of redeeming these bonds would not change: it would remain at $11 million (though redemption would most probably occur earlier). But the market would be generating new information as to the likely cost of future reductions in the crime rate. The market would now be expecting reductions of 10 units of crime to cost $2 million (from 50 to 40 units), and $3 million (from 40 to 30 units). The new research would have reduced the costs from $5 million and $6 million (respectively). So the cost of any further crime reductions would also fall, and by following market price movements policymakers could gauge approximately by how much. 

These figures are hypothetical, but they do indicate the role that markets for Social Policy Bonds could play in helping the government, and taxpayers, decide on their spending priorities. The market for the bonds is elegantly efficient in conveying information about the cost of achieving objectives and, crucially for policymakers, how this cost varies with time and circumstances. I discuss this in Chapter 5 of my book.

The system is corrupt

Two excerpts from recent readings:

In the Rostov region, in southern Russia, the owner of several stalls that sell local produce says she dreams of having her own fuel tanker. “They can all go to hell with their ideas and grand ambitions,” she says. “They” include Vladimir Putin, Donald Trump, Volodymyr Zelensky, Emmanuel Macron and local governors. “We used to live just fine. Now all you do is scramble from one problem to the next.” Russians are growing anxious and angry, 'Economist', 8 July 2026

The SNP [Scottish National Party] has been winning by default for years now. Everyone knows the party is exhausted and out of ideas, but people keep voting for it for want of anything better. And, like Labour when it ruled Scotland, it never tries anything new. Why bother? The day before [Peter] Murrell’s sentencing, the party’s eight remaining Westminster MPs backed a presentation bill aimed at devolving independence referendum powers to Holyrood. These bills are highly unlikely to be passed. A futile gesture. Business as usual. Stealing from the SNP, Dani Garavelli, 'London Review of Books', 9 July 2026

The real political divide, I think, is not so much between left and right, or government and opposition, but between politicians and ordinary people. There are probably convincing psychoanalytical explanations for why those who pursue and attain power lose sight of whatever ideals they might have had, but more important is what we can do to close the gap between those with power and the people they are supposed to represent. Part of the reason for this gap is that we live in systems under which politicians can avoid being accountable for outcomes that are meaningful to ordinary people. Instead they make vague, unverifiable promises, and their debates centre around funding arrangements, institutional structures, and legalisms. 

My thinking is that we need to re-orientate policy discussions and express policy goals in terms of long-term meaningful outcomes such as reduced crime rates, improvements in literacy, health and the environment. Ideally, too, we'd devise a way of channeling the market's incentives and efficiencies into the achievement of these outcomes, and my suggestion is that we transition to a Social Policy Bond regime. This could be done gradually, Take health, for example. In the UK, central government provides funding for regional health authorities (for spending on doctors, hospitals and prescriptions) according mainly to
population level, age and need. Government also supplies funds directly to medical research organizations and academic institutions. A transition to a Social Policy Bond-based, rather than institution- or activity- based, funding programme would see the direct funding government gradually decline, while expenditure allocated by bondholders to the outcomes that all these institutions are collectively trying to achieve — longer life spans and a better quality of life, say — would gradually rise. Bondholders would face continuous incentives to make sure their funds are allocated only to those institutions with the most promising approaches to improving people's health. Those institutions could be already existing or new, public- or private-sector. There is more on how this sort of gradual transition can be achieved in Chapter 4 of my book, and more about applying the Social Policy Bond principle to health in the links on this page.

Someone understands the Social Policy Bond principle!

Kylie Mohr writes: 

As prediction markets boom and a new wildfire season begins, fire survivors and ethicists say that the betting encourages and rewards callous thinking — and dangerous behavior, too. One major concern stemming from wildfire prediction markets is arson. ...Theoretically, making a bet could give someone the perverse incentive to start a fire, or help one grow. Unlike other disasters, such as hurricanes, flooding or extreme heat, a fire can be manipulated in minutes by just one person. “Systems that tie financial gain to wildfire outcomes risk encouraging misuse, including arson, and are not compatible with our mission,” a spokesperson for the U.S. Forest Service said. Will betting on wildfires lead to arson?, Kylie Mohr, 29 June 2026

This is how Social Policy Bonds were conceived: define an uncertain future event and allow people to bet on whether it will occur or not. If enough people bet enough money, they will have an incentive to co-operate to make that event happen. Simple. Social Policy Bonds would target desirable social and environmental goals. Though some bondholders would be mere speculators, others would be motivated by the prospect of potential increases in the value of their bonds, to help achieve the targeted goal. The aim is to channel people's self-interest - their wish to win a bet - into improving society's well-being. Targeted goals have to be chosen carefully. A bond regime would show the most marked improvement over conventional policy when: goals are long term; when current policy is failing; and when diverse, adaptive approaches will be necessary. I've written about applying them to goals that fulfil all these criteria: including eliminating conflict, reducing crime, unemployment or climate change. Each goal must ideally be objectively verifiable. Though the non-tradeable variant of my idea is currently being implemented in about 25 countries, the original conception has yet to be tried. One possibility could be target for reduction the area of land lost to wildfire in, say, the United States, in one year....

Small wars and nuclear peace

The Economist writes about great power equilibrium: 

But for a balance of power to bring a new order it must do more than satisfy the two main actors. It must also bring stability to others or be flexible enough to encompass change. It must offer something of what Britain brought to 19th-century Europe through policies which sought to preserve the status quo by ensuring no country could dominate. Wars still happened, but their goal, as Henry Kissinger put it, was equilibrium, not total conquest. Unfortunately, as Dr [Francis] Fukuyama points out, using small wars to recalibrate the balance of power in a world studded with nuclear weapons will court catastrophe. How such a system could function is a mystery. America's wrecking-ball revolution, the 'Economist', 2 July 2026

Right; and small wars aren't going to stop happening any time soon. Does anybody seriously believe that there are there are systems in place that will effectively stop them becoming nuclear if one or other of the protagonists have the means to use them? We've been lucky, so far. The number of warheads has fallen from about 70000 since the Cold War, but there are now nine countries in possession of 12187 warheads, and those numbers are likely to increase. 

Consider the incentives on offer to those in power today: if they possess nuclear weapons they can initiate a conflict knowing that they can dictate its course by threatening, implicitly or otherwise, to deploy them. If the target of their aggression doesn't possess nuclear weapons or if the target cares more about its civilian population than the aggressor, then at some point our luck is likely to run out. It might be today, it might be in a few years, but the number of countries with nuclear weapons continues to proliferate and we should not have to rely on those in power to continue to exercise restraint at all times. The taboo against threatening use of nuclear weapons has been broken. It now appears inevitable that, before long, the taboo against their use will also be broken. Our political systems reward those most adept at acquiring power. Threatening the use of nuclear weapons is one way in which a regime can hold on to that power.

What can ordinary people - those of us who are content not to have the power to kill millions of human beings - do, faced with the realistic possibility that the nuclear taboo will be violated some time soon? My suggestion is that we issue Nuclear Peace Bonds. These bonds would be redeemable for a fixed sum only when a targeted array of indicators of peace had been achieved and sustained for a period of at least thirty years. They would reward those who do most to reduce the likelihood of nuclear conflict. Backed by a combination of governments, non-governmental organisations, philanthropists and ordinary people, they would encourage a variety number of diverse, adaptive peace-generating approaches. Some would inevitably fail; the way the market for the bonds would work means that these efforts would be terminated and resources diverted into more promising initiatives.

The effect of Nuclear Peace Bonds would be to give incentives to accelerate and guide our progress toward a less violent world more efficiently than has happened so far: a protracted, haphazard and bloody path that has given us a less violent world until now, but also one that has left us fearful of nuclear catastrophe. We can do better than that. By acknowledging that not all approaches are going to work, and supplying incentives for those that do, we can guide and accelerate evolutionary processes to bring about, as quickly and efficiently as possible, what is surely our one of our most urgent goals: sustained nuclear peace.

Defensive medicine

When adherence to process becomes more important than outcomes, it's time to complain. One example is the practice of defensive medicine: 

Between 60 and 90 percent of U.S. physicians report practicing defensive medicine, defined as the practice of ordering of tests, procedures, and other medical care solely to reduce the threat of malpractice liability.  This additional care has been estimated to cost the U.S. as much as $50 billion annually, and this likely underestimates the scope of the problem. Why do so many doctors practice defensive medicine? maybe because it works, Anupam B Jena et al, 16 May 2016 

'It works' in the title of that study does not mean that defensive medicine generates better health outcomes; rather: 

[It was found that] physicians with higher spending in a given year—in other words, the physicians who ordered more tests or procedures for the “typical” patients—were substantially less likely to be sued for a malpractice incident occurring the following year. Source, cited in the above paper, but not currently visible on the web)

Doctors are reacting rationally to the incentives on offer: they are liable for under-diagnosis, but not for over-diagnosis. The incentives aren't solely financial: in the UK 'the primary driver behind this trend [toward over-testing] often lies in a "better safe than sorry" mindset, coupled with a growing emphasis on preventive medicine.' (Source)

The problems caused by over-diagnosis are not limited to its waste of resources arising from unnecessary treatment and its adverse effects, and treatments that bring no benefit: there are also the psychological harms such as anxiety, stress, depression, and the burden of being unnecessarily labelled as having a disease. 

We need to rejig the incentives so they align with people's health. I suggest we explicitly target broad, meaningful indicators of national health and reward improvements in these indicators however they are achieved. Funding should be dictated by its expected benefits to people, rather than to liability lawyers. Resources should be directed to where they will achieve the maximum improvement in health per pound spent. Such improvement could be measured using such indicators as Quality Adjusted Life Years, longevity and an array of other measures. 

My suggestion, therefore, is that we apply the Social Policy Bond concept to health, and issue Tradeable Health Outcome Bonds (THOCs), which would provide incentives to research, develop and refine all approaches to improving our health, including measures that are currently thought to be beyond the remit of health authorities, but that could nevertheless generate large positive health improvements. Such measure might include measures as varied as better public transport for low-income households, subsidised apprenticeships, or lobbying for more controls on alcohol outlets. There are many other possibilities - but, currently,  few incentives to explore their potential health impacts. A bond regime would not assume that existing healthcare organisations are best placed to deliver all such impacts: it would encourage investors in the bonds to direct resources into any those approaches that promise to bring about the best improvements in health. My essay on THOCs is long, at 9500 words. A shorter version is here. 

Indirect greenhouse gases: why the 'root causes' approach isn't working

From the current New Scientist:

Of all the global warming that has happened since the pre-industrial era, about 15 per cent has been caused by emissions other than greenhouse gases, mainly carbon monoxide and VOCs [volatile organic chemicals]. ‘Forgotten’ pollutants cause warming, Alec Luhn, 'New Scientist', dated 20 June 2026

Some countries target emissions of these 'indirect greenhouse gases' indirectly, but most efforts aimed at reducing the rate of climate change are focused on carbon dioxide, methane and other gases that more directly affect the composition of the atmosphere. The same article tells us that black carbon (soot) is also excluded from these efforts and from national emissions data.  

The flaw in this approach - and it's a flaw that bedevils much environmental and social policy - is that in targeting a problem we try to identify its root causes and then aim to eliminate or attenuate them. But, as this example shows, when we are dealing with problems that have multiple causes and significant time lags, it's almost impossible to exhaustively identify these root causes. In this example, Mr Luhn points out that these indirect greenhouse gases plus black carbon are estimated to have contributed about  0.3°C of warming, which is quite significant. But there may be even more causes of climate change of which we are not aware. Indeed, a recent article in Nature highlights the hitherto unrecognised climate forcing contribution of micro- and nano-plastic particles. 

Which is why I advocate targeting the outcomes that we wish to see, rather than the supposed means of achieving them. Our knowledge of environmental and social relationships though, is always growing, and it makes more sense (to me) to recognise that we can't identify all the root causes and, rather than assume that we do and legislate accordingly, we should be encouraging people to keep researching into those root causes or to acknowledge that there might be more efficient ways of solving our problems than trying to find them. In the climate change example, we should be very clear about what we want to see: most probably, we'd want to see a range of physical, biological, ecological, social and financial measures of climate impacts to fall within an approved range for a sustained period. Why then, shouldn't we reward people for achieving that goal, rather than the alleged means of achieving it? In this example, again, it might be more efficient to look at solutions other than, or complementary to, reducing greenhouse gas emissions. Such approaches are being followed, but there is no coherent way of rewarding the most promising of them; nothing along the lines of the efforts to control emissions of those gases that fossilised science once told us contribute most to climate change. 

A Social Policy Bond regime, applied to climate change, would take that long-term view, and once we have clarified exactly what outcomes we wish to see, reward those who take steps to achieve them. A bond regime would reward the most cost-effective approaches and terminate those that are least promising. The same paradigm applies to other social and environmental approaches, especially those that are so complex that current policies are failing. 

For more about what I think about root causes, see here and here. For more about Social Policy Bonds in general see here; as applied to climate change see here.  

$3768 per second

There can't be many people who'd like to see a nuclear conflict but, with expenditures like this, it's increasingly likely that we'll see one:

In 2025, the nine nuclear-armed states spent just under $119 billion, or $3,768 per second, on their nuclear arsenals. [T]he combined spending of the nuclear armed states – China, France, India, Israel, North Korea, Pakistan, Russia, UK and US increased 19% from the previous year....Premeditated: 2025 global nuclear weapons spending, International Campaign to Abolish Nuclear Weapons (ICAN), June 2026   

In 2025, at least 25 companies working on nuclear weapons development and maintenance held significant contracts for their work. These companies earned at least $38 billion in the year for nuclear weapons related activities and hold at least $394 billion in outstanding contracts. In 2025, new contracts worth around $2.5 billion were awarded to these companies. The companies identified in this report paid lobbyists in France and the United States more than $138 million to represent their interests last year. 2025 Nuclear Weapons Spending Reaches $119 billion, ICAN, June 2026

These sums represent a massive failure on the part of our species. A big part of the problem is that there's no obvious way in which ordinary people - the part of humanity that hopes nuclear weapons will never be used - can channel our wishes into opposing their continued development and deployment. There are bodies, such as ICAN, dedicated to campaigning for the abolition of nuclear weapons, but their resources are pitiful in comparison to the sums wielded by the companies working to develop them. The financial rewards to those companies, and the incentives to acquire them, vastly outweigh organised opposition to t heir deployment and use. Incentives are crucial and we need to offer meaningful and effective incentives for people to do everything they can to deter the acquisition and use of nuclear weapons.     

What I propose is that we offer incentives for people to explore more ways of reducing the likelihood of nuclear conflict as efficiently as possible. I suggest that we put in place a system that encourages and rewards people for researching, refining and implementing the most promising activities that would ensure sustained nuclear peace. 

Nuclear Peace Bonds would be an ideal application of the Social Policy Bond concept, which is a way of rewarding the more efficient achievement social and environmental outcomes. In this instance, the targeted outcome could be nuclear peace sustained for thirty years. 'Nuclear peace' could be defined as something like 'the detonation of a nuclear device that directly kills more than 50 people' (with added provisos about any electromagnetic pulse effects). The bonds would reward those who achieve such a sustained period of nuclear peace, whoever they are and however they do so: only the outcome would be stipulated. For a short piece on how Nuclear Peace Bonds would work, please click here. For essays about applying the bonds to conflict in general, click here.

As well as pursuing activities the exact nature of which we cannot anticipate, investors in Nuclear Peace Bonds could do things that cannot be done by existing organisations, constrained as they are by precedent, and their perceived need to maintain their existence and so satisfy the bodies that fund them. So, for example, in today's world, nobody would have any incentive to bribe people close to decision makers in politics or the military to advocate nuclear disarmament. Likewise, an existing body is unlikely to try to get religious extremists to tone down their rhetoric, even if it believed that were the most efficient way of reducing the probability of nuclear conflict. The risk and consequences of exposure and backlash are too great for current institutions to bear. Holders of Nuclear Peace Bonds, however, would not be deterred from whatever actions they think most effective: funds to redeem their bonds could be held in escrow. Once nuclear peace had been achieved and sustained, their reward would be guaranteed. Nuclear Peace Bonds could run in parallel with existing efforts. Indeed, it's likely to channel more resources into those existing bodies whose activities are most promising. It would also encourage new approaches, the precise nature of which we cannot and need not know in advance.

A Nuclear Peace Bond regime would reward those who achieve peace, whoever they are and however they do so. It’s an admittedly novel approach, but the relevant question is 'what is the alternative?'. The Doomsday Clock is currently at 85 seconds to midnight....

Outcomes and accountability

George Monbiot writes about the UK:

Our entire political system is premised on the idea of accountability. Brilliant theory: just a shame it bears no relation to reality. Nothing sums up the death of accountability like the prospect of Nigel Farage in No10, 'the Guardian', 20 May 2026

Under the current system, people rarely monitor the distance between what politicians say and what they do. Even less frequently do we identify links between what they say and what actually happens. This is not just because of short attentions spans; it's also because society is far too complex for such relationships to be obvious. Things might have been different in the past, when there were fewer variables, fewer people, and time lags between a politician's statement and its consequences were shorter. Then, choosing between electoral candidates would have felt more meaningful, and politicians could be held more accountable. We became used to the idea of framing policy goals in terms of the ideas and personalities of the people who enunciated them. But those days are over, and people are now far more cynical not only about politicians, but about elections and democracy itself. 

To change this, I suggest that we frame policy in terms of broad outcomes that are meaningful to ordinary people, rather than, as now, funding arrangements, institutional structures and legalisms. So, instead of politicians focusing on where society's scarce resources should go, they would instead concentrate on things that, in democratic countries, they are actually good at: articulating society's wishes and raising the revenue for their achievement. Under a Social Policy Bond regime, investors in the bonds who would decide how our goals would be best achieved. They would be constantly motivated to find the most efficient ways of doing so. The bonds, being tradable, could target long-term goals, so that holders need not hold them to redemption to benefit from any increase in value that would arise from their working to make the goals' being achieved more quickly. The bonds would channel the market's incentives and efficiencies into solving our social and environmental problems. By focusing on broad, meaningful outcomes, our policymaking would be more transparent and bring about more public engagement in the process. There'd be more buy-in, less blaming and less cynicism. The role of politicians would change; they'd be more concerned with society's wishes, and less with power: they'd have effectively contracted out the achievement of social goals to bodies beyond their control. As well as the greater efficiency with which our goals would be achieved, the people attracted to politics would be less driven by the possibility of exercising power while overseeing process, and more by representing the informed views of their constituents as to the social and environmental outcomes they wish to see. 

Complexity

James C Scott writes:  

[T]he very strength of scientific agricultural experimentation— its simplifying assumptions and its ability to isolate the impact of a single variable on total production—is incapable of dealing adequately with certain forms of complexity. It tends to ignore, or discount, agricultural practices that are not assimilable to its techniques. James C Scott, Seeing Like a State, (Chapter 8), 1998

As in agriculture, so with society and the environment. Society is too complex for simplistic goals, such as maximising food production, necessarily to improve net societal well-being. We'd do better to target the outcomes we wish to see, rather than the supposed means of getting there. In a Social Policy Bond regime, we might ignore 'agricultural policy' (notoriously inefficient and corrupt) and explicitly target broader goals as the physical health of the population. Subsidising farmers might be one way of getting there, but it would be up to bondholders to work out whether there are more efficient ways of achieving that goal. (There probably are.) Societal complexity has risen hugely since relatively simple goals and policies could adequately anticipate all its variables and time lags, and their effects on well-being. 

Social Policy Bonds would target the outcomes we wish to see, rather than the alleged means of reaching them. As well as efficiency and transparency about what government is trying to achieve, other advantages of a bond regime would arise from its ability to target long-term goals, and so encourage research, experimentation and refinement of a diverse and adaptive array of approaches to solutions to our social and environmental problems. Though the concept has been in the public arena for decades, it  hasn't advanced very far. I think this is partly because the left doesn't like anything to do with markets and elements of the right doesn't want to think in terms of government intervention of any sort (though a bond regime would shrink the role of politicians). Most institutions of any sort, public- or private-sector, are mainly concerned with self-perpetuation, and would fell threatened by Social Policy Bonds, which would prioritise efficiency most of all.  

Misaligned incentives

Tadeusz Patzek writes: 

Humans did not unknowingly create climate breakdown; they proceeded with eyes open, repeatedly prioritizing immediate growth over long-term habitability. The subsequent failure to restrain fossil-fuel use was therefore not a failure of science, measurement, or foresight; it was a failure of political economy. Decision-makers understood that the benefits of fossil-fuel expansion were immediate, concentrated, and readily monetized, while the damages were delayed, diffuse, probabilistic, and politically externalizable, and that institutional power flowed toward those who maximized short-term growth. Thermal Power and Climate Change: A Data-Driven Analysis of Cause and Effect, 1800-2100, Tadeusz W Patzek, February 2026 (This is a preprint available for free download from here. My ellipses indicate citations.)

The last sentence sums up much of the human predicament. Most of us, including policymakers, are offered incentives that reward short-term thinking. There are few financial incentives that would reward such crucial goals such as the survival of humanity. Too much human ingenuity is channelled into activities that, given the urgency of our challenges, are trivial or worse. 

Social Policy Bonds are an attempt to re-orientate the incentives, to encourage solutions to our urgent, long-term problems. They aim to inject the market's incentives and efficiencies into the achievement of such outcomes as disaster prevention, conflict reduction, nuclear peace or climate stability. Historically, at the national level, such outcomes have been neglected, or have been the subject of ad hoc arrangements. At the global level, the resources available to the dedicated staff of NGOs working for peace, for example, are orders of magnitude lower than those that would adequately reflect the diffuse wishes of humanity. A bond regime would divert funds into the most efficient of these organisations, allowing them not just to raise the salaries of their employees, but to attract more expertise and more resources. 

Foreign billionaires: the real beneficiaries of agricultural policy

Government's involvement in agriculture in the rich countries has a long history. Its subsidies, originally well intentioned and (to some extent) rational, have created powerful interests that resist change. They've led to farming at an intensity that degrades the soil, water, and animal welfare. One of their - stated - aims was to preserve the family farm, which they haven't done. They are capitalised into farmland values, making entry into agriculture almost impossible for those who don't inherit. They raise food prices, while barriers to food imports stifle the prospects of food-rich developing countries and transfer money from taxpayers and consumers to the wealthy: 

UAE’s ruling royal family benefits from more than €71m in EU farming subsidies

The United Arab Emirates’ ruling royal family is benefiting from tens of millions in EU subsidies to grow crops destined for the Gulf, it can be revealed. A cross-border investigation by DeSmog and shared with the Guardian found subsidiaries controlled by the Al Nahyans collected more than €71m (£61m) in six years for farmland it controls in Romania, Italy and Spain. The Al Nahyan family is the second richest in the world, with an estimated wealth of more than $320bn (£235bn), mostly derived from the Emirates’ vast oil reserves. Subsidies under the common agricultural policy (Cap) make up a third of the EU’s entire budget, paying out about €54bn each year to farmers and rural areas across the bloc. UAE’s ruling royal family benefits from more than €71m in EU farming subsidies, Clare Carlile, 'The Guardian', 7 May 2026

These subsidies have been widely challenged for decades (I wrote about them in 2001), but still they continue....

All of which points to the need to be very clear about what are the actual intentions of government policy. If, for instance, it's to achieve self-sufficiency in food production, then we need to look beyond outputs to inputs - especially oil. If it's to help smaller farmers, then target the incomes of small farmers, rather than subsidise land ownership. If it's to raise the cost of food so as enrich billionaires, then come clean and tell us that that is your intention. 

A Social Policy Bond regime would oblige policymakers to be clear about the outcomes they wish to see. This should be a starting point for all policies, in contrast to today, where stated intentions are vague, incoherent, uncosted and deceptive. Politicians can get away with such obfuscation because we are used to policies being framed in terms of funding arrangements, legalisms and institutional structures. The connections between what politicians say, what they do, and outcomes are too obscure to be identified. A bond regime, though, would have explicit, verifiable goals, which the public could help prioritise and with which ordinary citizens could engage - necessary to generate buy-in to policies that invariably create losers as well as winners. Transparency, efficiency and buy-in are just some of the advantages of a Social Policy Bond regime, about which there is much more on SocialGoals.com. 

Aim for nuclear peace first

PANews reports: 

In April 2026, a hair dryer was used to heat a meteorological sensor at Paris Charles de Gaulle Airport, causing abnormal temperature spikes. The attacker exploited rule vulnerabilities in Polymarket's prediction market, winning $34,000 in prizes. Polymarket relies on a single data source and does not revise data after settlement, making physical intervention possible. After the incident was exposed, Polymarket quietly changed the data source without publicly acknowledging the vulnerability. This is known as a 'physical oracle attack,' with low cost but high returns. A hair dryer "blew" $34,000 away from Polymarket, PANews, 23 April 2026

Campbell's Law states that as soon as you use a specific number to judge people's success, people will start "gaming the system" to make that number look good, even if it ruins the actual quality of the work. The hairdryer is a relatively trivial example; a more serious one is 'teaching to the test'. It's a problem that afflicts current policymakers and could, potentially, derail a Social Policy Bond regime, which depends entirely on the definition and targeting of quantitative variables. A solution would be to target goals that are, or are inextricably lined to, what we actually want to achieve. This could be made to work well for bonds that target broad goals at a highly aggregated level and in the long term. Take literacy: if we want to see improvements in the literacy of, say, 7-year old children in a country over the next decade, we could sample children of that age over a wide area, waiting until the end of the decade to take the sample. Nobody would know in advance the identity of those children, so only a genuine improvement in the national literacy level of 7-year olds would signify that the goal had been achieved. 

A current preoccupation of mine is the urgent need for conflict reduction. Coming up with a range of indicators that we could target for world peace, or even regional (such as the Middle East) peace could be done: I envisage an array of indicators, including: numbers of people killed directly by conflict; people seriously maimed; people made homeless; expenditure on weaponry; numbers in armed forces; numbers of schoolbooks inciting hatred; and many others. All these indicators could be debated, then rigorously defined for targeting purposes. This would take time, but would be worth doing, given the payoffs that we would target, such as peace in the world (or region) sustained for at least thirty years. But simpler, and only slightly less ambitious, would be to target nuclear peace: detection of a nuclear explosion is a relatively simple matter: from Wikipedia:

There are many different ways to detect a nuclear detonation, these include seismic, hydroacoustic, and infrasound detection, air sampling, and satellites. They have their own weaknesses and strengths, as well as different utilities. Each has been used separately, but at present the best results occur when data is used in tandem, since the energy caused by an explosion will transfer over to different mediums. Source

I've written about Nuclear Peace Bonds here. I'd hope that, once nuclear peace were targeted, we could then begin the more arduous work on defining exactly what we'd want World Peace Bonds or, say, Middle East Peace Bonds to target. 

Documenting conflict isn't helping

Author and Middle East correspondent, Charles Glass, writes about the current conflict in Lebanon:  

I hear and sometimes see this war, but I’m not covering it. What good would it do? You, dear reader, don’t give a damn. Nor do the Israeli invaders, their American enablers or Hizbullah’s aspiring martyrs. ...Would anything I write compel the arms dealers and ultra-high-tech digital warfare providers to deprive their managers and shareholders of the profits accruing from their wizard new methods of taking human life? Like the rest of Lebanon, I wake in the night at the sound of every loud bang, unsure whether it is thunder, an Israeli naval shell, a drone explosion or a jet dropping a two-thousand-pound bomb to destroy an entire city block. Diary: Beirut, now and then, Charles Glass, 'London Review of Books', 23 April 2026

It's a sad fact that writing about conflicts, and even showing gruesome videos, does little to stop them. Such documentation cannot oppose the formidable coalition of 'warfare providers' on the other side: the arms merchants, the ideologues, the religious zealots and all their corrupt or gullible hangers-on. Most of us don't want any of that. But the politicians' relentless focus on the short term means that ceasefires and truces are merely pauses in the action that allow parties to stoke resentments and re-arm. A lasting peace is more likely to be a just peace, and we need to create a constituency that is rewarded for achieving it. 

World Peace Bonds, or a variant of more modest focus, could be the solution. They would reward a sustained absence of conflict: I suggest a minimum period of thirty years. This long-term focus would encourage investors in the bonds to research, experiment and refine approaches to ending conflict. Such activities would probably include sparing the next generation the neuroses and resentments of their parents - something that good people are doing nowadays (see here, for example), but with a pitifully limited  command of resources. A bond regime would channel funding and expertise into the most promising of these activities. If financed by philanthropists, with contributions from NGOs and the public, it could bypass politicians whose narrow short-termism does much to keep conflict going. 

World peace is an ambitious goal, about which I have written here, with my book on the subject available here (downloads are free of charge). More modest goals about which I have also written include Middle East Peace Bonds and Nuclear Peace Bonds. 

Processism

Stephen Bush writes about Sir Keir Starmer, the UK Prime Minister: 

Instead Starmer believes that the combination of the right process and hard work is enough to solve more or less any problem, and that mobilising the right amount of institutional memory will result in a better standard of government. This, then, is Starmerism: the belief that process can, in and of itself, lead to better outcomes. The trouble is that this approach is wrong...[t]he job of prime minister isn't to follow process; it is to navigate and advocate for trade-offs. The Mandelson fiasco reveals true nature of Starmerism, Stephen Bush, 'Financial Times', 21 April 2026

In today's policymaking world, the notion of tradeoffs is largely absent from debate. It's a world in which vague promises can be made and nobody dare publicly identify the people who will inevitably lose out from any particular policy. There's no long-term strategy: faith in the legislative process is what passes for strategy and vision. Government bodies, politicians and their paymasters in the large corporations - or their lawyers - are the only people who can understand, follow and manipulate the policymaking process, which they do to their advantage. 

A Social Policy Bond regime would be different: policy would be expressed in terms of long-term outcomes rather than process. This would bring more public participation into the policymaking process - an end in itself as well as generating more of the buy-in that is essential when policy goals have to be prioritised and costed. Goals would be explicit and stable and achieved with maximum efficiency. Discussion would centre on what vision and strategy, rather than process. 

For more about Social Policy Bonds, see here. 

Focusing on health outcomes

 Dr Vernon Coleman compares healthcare in the UK today to how it used to be in the 1970s:

The main single advance in medicine [in the 20th century] has been the (accidental) discovery of penicillin and other antibiotics. The discoveries of insulin, steroid hormones and a few other pharmaceutical products made a difference. But most of the essential and useful discoveries were made in the first half of the twentieth century. Since then the pharmaceutical industry has produced very little of consequence. Vaccines have been incredibly profitable for drug companies and a disaster for patients. There has been no heart drug as effective as digitalis (from the foxglove) and no pain killers as useful or as safe as aspirin (from the willow tree) and morphine (from the opium poppy). 

On the other hand the practice and management of health care has become incredibly complex, bureaucratic and expensive and patients are provided with much poorer care than their parents, their grandparents and their great grandparents. In the UK, the National Health Service has far too much money but most of it is wasted on administration, meetings, paperwork and pointless regulations. Trade unions and disciplinary bodies seem to me to be little more than outposts of the drug industry and seem to serve their interests rather than the interests of patients. Why doctors now do more harm than good, Dr Vernon Coleman, 18 April 2026

Given the widespread distrust of pharmaceutical companies, it would seem that this is the time to move towards rewarding those who achieve favourable health outcomes, rather than those who merely engage in activities purporting to deliver those outcomes. Those currently employed in healthcare are reacting rationally to the incentives on offer, to the detriment of our physical and mental health. And those incentives encourage over-screening and over-treatment, and the neglect of commercially nonnviable preventive interventions. It's the same, or worse, in the US:

The system is deemed broken, consuming 17% of GDP yet ranking last among high-income nations in life expectancy, maternal mortality, and preventable deaths, with 26 million uninsured and 43 million underinsured. Employer costs rose 160% in 20 years, driving wage stagnation and ER overuse; premiums for Obamacare and employer plans are surging in 2026 amid subsidy expirations. Shortages loom for providers, especially in rural areas, amid corporatized care and underfunded public health. US healthcare system is in crisis, James K Elsey 5 February 2025

It's time for a new approach. My suggestion is that, rather than policymakers' focusing on the means by which they think good health can be achieved, they instead focus on targets for good physical and mental health, and provide incentives for people to achieve those targets. The Social Policy Bond concept, applied to health, would do this, and more: it would inject the market's incentives and efficiencies into all the processes necessary to improve a nation's health. Health Bonds would channel our scarce resources into the most efficient means of improving our health, including those currently neglected or not even considered by our current healthcare bodies, most of which have little incentive or capacity to consider broad health outcomes that fall outside their increasingly specialised remit.

Health Bonds wouldn't stipulate how our health goals shall be achieved, nor who shall achieve them. This allows a broader approach. For example: our current compartmentalised accountancy-driven policy approach would not take into consideration the adverse health impacts of subsidising advanced driving courses for young owners of motorbikes or cars. But holders of Health Bonds would look at such measures, investigate their possible health impacts, and make an informed decision as to how any improvement they might bring to the nation's health compares to other possible interventions.

Nuclear peace; not much else matters

It's difficult to write about social problems when war looms so large, especially the possibility of nuclear conflict. Even global environmental concerns like climate change, or the destruction of fishing grounds, would fade into the background if the taboo against the use of nuclear weapons were ever to be broken. I've written copiously about the sustained nuclear peace, urged the issuing of Nuclear Peace Bonds to achieve it, mainly because the need for it is so great, but also because it would make an ideal target for a Social Policy Bond regime: 

• Existing policies don't appear to be doing anything to reduce the likelihood of a nuclear conflict;
• Nuclear peace sustained for at least 30 years is the sort of long-term goal that will require a lot of groundwork with many different approaches that will need winnowing out to find the most promising;
• Verifying whether the goal has been achieved would be easy; 
• The range of possible approaches is big, and there are complexities and feedback loops that make conventional policymaking, limited as it is by the imaginations and time horizons of its practitioners, useless; diverse, adaptive approaches are needed; and 
• There are few financial incentives to those people or organisations trying, or pretending to be trying, to achieve nuclear peace. 

The last of these requires some explanation: financial incentives are not solely about making the people who work for nuclear peace better off (which is not in itself an ignoble outcome), but also about attracting resources into what is currently a policy goal as unglamorous as it is urgent and necessary. With more funding, organisations working to achieve nuclear peace could employ more people and more resources, giving them a better chance of advancing the goal. 

All my work on Nuclear Peace Bonds and, more broadly, conflict reduction, can be found via this page. It is all available free of charge, including the text of my book on World Peace Bonds, though printed copies can also be purchased. 

The legibility of complex societies

The late Professor James C Scott wrote: 

Throughout the book I make the case for the indispensable role of practical knowledge, informal processes, and improvisation in the face of unpredictability. From the Introduction to Seeing Like a State, May 2020

From the summary of the same book, on the Lies are Unbekoming website:

James C. Scott’s “Seeing Like a State” offers a penetrating analysis of how modern states attempt to make complex societies legible and controllable, often with catastrophic consequences for the people they claim to help. Scott examines the fundamental tension between the state’s need for simplified, standardized information—cadastral maps, census data, permanent surnames, geometric city plans—and the intricate, locally adapted practices that actually sustain human communities. These “state simplifications” are not inherently evil; they enable taxation, public services, and citizenship itself. The danger emerges when states...attempt to impose their simplified maps onto reality, destroying the complex social and ecological relationships that make life possible. Unbekoming, 26 March 2026

All this points to the need for diverse, adaptive approaches, and a policymaking system that encourages them. The legibility that Professor Scott discussed is a self-entrenching way of looking at the world, and it applies at all levels of government. There are many aspects to it, but one is that it takes existing institutions as a given: what they cannot see or do not wish to see, is ignored or regarded as a threat. Government bodies have their own agendas, primarily self perpetuation, and the practical knowledge, informal process and improvisation that Professor Scott mentions do not fit in with them. 

A Social Policy Bond regime would be different. Taking a long-term view, it would target the outcomes that we wish to see and encourage diverse, adaptive approaches to achieving them. Any institutions that would arise from a bond regime would have as their one over-arching goal that of achieving social and environmental goals as quickly and efficiently as possible. In such a way, we'd combine the better aspects of 'state simplifications' with the practical, diverse and adaptive knowledge of the people actually working to achieve society's goals. The best of both worlds. 

Why Social Policy Bonds have gone nowhere

I used to think that Social Policy Bonds, which aim to bring about socially desirable outcomes, would please all policymakers, no matter their ideological bent. The bonds would inject market incentives (pleasing the 'right) into the solution of social and environmental problems (pleasing the 'left'). They'd improve efficiency and stimulate promising innovatory approaches. But - apart from adoption of the non-tradeable version - the concept hasn't taken off. Partly, I think, this is because the bonds are mainly about achieving long-term goals, such as the slashing of crime rates or improved water and air quality, and policymakers do not think that far ahead. Other reasons are:

• Social Policy Bonds would require politicians and bureaucrats to relinquish their powers to allocate funding. The exercise of this power is often an end in itself, but it also allows politicians to channel resources into activities or people that they favour, regardless of their efficiency.   

• Many in power are constrained by their ideology. An idea that combines market incentives and government intervention to solve social problems was, I realise now, never going to appeal to the idealogues.  
• 
  
• There's also a particular strain of leftism that disdains anything that smacks of profit, capital gains or financial incentives more generally. It's not always articulated, but it's a sort of subterranean contempt for commerce; a contempt that can survive only in the public sector and its offshoots in broadcasting and academia. Something like Social Policy Bonds, where people can get rich by helping others isn't ideologically pure enough for those who think that way.

There is also the fact that Social Policy Bonds aren't a perfect solution: there could be friction caused by free riding, and there are other criticisms - see here for more. That said, I do think that they are better than current policymaking systems, trapped as they are by their short-term focus and the whims and limitations of those in control. They're also better, in my view, than those ideology-driven programmes that are still occasionally propounded. 

My view now is that government is never going to look into anything as radical and threatening as Social Policy Bonds. The way forward is for those outside government with a long-term perspective and enough in the way of motivation and access to seed funding, to carry the torch. I've tried that approach with those philanthropic organisations that deign to give out email addresses, with little success. 

See also this web page.

Targeting sustained peace

How can humanity reliably target the peace that almost all of us we wish to see? The absence of conflict, expressed in terms of such objective measures as numbers of deaths or serous injuries caused by violence, or people made homeless sounds like a desirable goal. But I think it points to a qualitative difference between short- and long-term goals, and why we must have a policymaking system that targets the latter. 

A short-term peace can be the precursor to a long-lasting peace, but it can also be a period within which opposing sides of a conflict merely pause to catch breath, re-arm and prepare for another bout of hostilities. Current policymaking, in conflict reduction as in many other policy areas, is mostly geared toward the ceasing of current hostilities. There are groups doing heroic work that looks at the longer term (see here and here, for lists of such organisations), but their influence is vastly outweighed by those powerful bodies, in governments and elsewhere, that think only in the short term and for whom conflict is just another tool that they can deploy for in their own interests. As well, organisations working for long-term peace or their employees are rarely financially rewarded for success. 

Which is why I suggest that we issue Conflict Reduction Bonds, or some variant, that would explicitly target peace sustained for at least, say thirty years. The bonds would create a protean coalition of interests, all aiming at long-term peace. Their motivation would come from the increase in the value of their bonds that would result from their successful reduction in the probability of future conflict. Rewards would not only take the form of paying hard-working, dedicated employees more: efficient peace-building bodies would attract more funding and so be able to achieve far more. I've written extensively about Conflict Reduction Bonds and their variants; all my writing is downloadable free of charge via links here. 

 

Emergent properties in war - and peace

Charles Hugh Smith is writing about the models we use to plan war, but I think his argument applies as well to society and the environment: all are too complex to be modeled effectively:

Our models for planning and understanding war are inherently linear because there is no way to project what emergent properties the war will generate, or anticipate all the second-order effects (consequences generate their own consequences) unleashed by these dynamics. What emergent properties describe is the way that complex interactions generate dynamics that have their own separate properties that are different from the initial conditions. We start with systems we think we understand--military forces, logistics, political structures, etc. To manage these complex systems, we distill them into models that enable us to control the systems. But once these complex systems interact, the interactions generate knock-on effects which manifest properties that operate outside the models. Iran, En-Lai, Napoleon, Mike Tyson and Model Collapse, Charles Hugh Smith, 9 March 2026

Policymaking might have been simpler in former times; now the interactions and complexities are too great for the sort of top-down, one-size-fits-all approach that is inevitable when power is centralised. All this points to the need for a system that allows for adaptive approaches to solving our social and environmental problems. Social Policy Bonds could be the solution: they would target broad long-term outcomes, and stimulate approaches that can adapt readily to changing circumstances and to diverse circumstances of different regions or populations. Unfortunately, any initiative to introduce a bond regime or something like it would be hobbled by the interests of existing institutions, whose entire raison d'etre would be threatened by a policymaking system that subordinates institutional structures and funding to desirable social goals. Current policies and are dictated by the private- and public-sector bodies we already have; it should be the other way round. See here for how a Social Policy Bond regime could bring about such a reversal. 

Betting on outcomes

The current controversy over prediction markets reminds me of how the idea of Social Policy Bonds originated. If you hope for a particular outcome and put a sufficiently large bet on it, then at some point it would be in your interests to make that outcome happen. Applying that to desirable social and environmental goals, and of course restricting any goal-achieving activities to those that are legal, is the underlying principle of the bond concept. Perhaps one way forward for, say, environmental groups is collectively to bet on something verifiable, and something that a counterparty thinks unlikely, such as a less-than-consensus projection of the proportion of greenhouse gases in the atmosphere in five years. They could then strive to achieve that goal, using their own funds and the possibility of that payoff as collateral for projects that will cut greenhouse gas emissions. In principle it could work. In practice, since most of our important social and environmental goals are long term in nature, it could be helpful only if there were a secondary market for the bet. If there were, then as with Social Policy Bonds, people could trade in and out, without having to wait till the goal is achieved before they can realise a gain: they'd make a profit if the market sees quick attainment of the goal as more likely. 

Without a secondary market, prediction markets would be as limited, and for the same reason as Social Impact Bonds, which aren't tradeable. I've written about the need for tradeability here and here. Essentially, it greatly expands the time-frames of the goals we can target, and allows for research, experimentation and channeling resources into only the most promising projects. For our most challenging goals, we need these activities, and they can take years.