Social Policy Bonds

What are Social Policy Bonds?

Social Policy Bonds are non-interest bearing bonds, redeemable for a fixed sum only when a targeted social objective has been achieved. The bonds would be backed  by government or private bodies, floated by auction, and freely tradable at all times.

 

A Social Policy Bond regime would:

 

· Inextricably link rewards to outcomes rather than inputs, outputs, activities or institutions; and

 

· Inject the market’s incentives and efficiencies into the achievement of social and environmental goals.

 

The effect of a Social Policy Bond regime is to contract out the achievement of social and environmental goals to the private sector. Because they do not prejudge how objectives shall be achieved, the bonds would encourage diverse, adaptive solutions. Social Policy Bonds could target any quantifiable social and environmental goal: less pollution, less crime, better health and education outcomes, and higher literacy rates, for example. At the global level, Social Policy Bonds could address climate change and violent political conflict (war, civil war and terrorism). A Social Policy Bond regime would enhance the efficiency, stability and transparency of policymaking.

 

For detailed descriptions of the Social Policy Bond principle, see below. For essays about how to apply Social Policy Bonds to different policy areas, click on “Applications” in the navigation bar. To see how Social Policy Bonds would address current policy issues and to make comments, visit the Social Policy Bonds blog. Site last updated 15 August 2008.

by Ronnie Horesh

Policy as if outcomes mattered

Social Policy Bonds in 600 words

 

Social Policy Bonds in 2400 words

Social Policy Bonds in 4200 words