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, auctioned on the open market, 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 most efficient operators - private or public sector. Because Social Policy Bonds do not prejudge how objectives shall be achieved nor who shall achieve them, they would encourage diverse, adaptive solutions.
Social Policy Bonds could target any quantifiable social and environmental goals, such as less pollution, less crime, better health, and universal literacy. At the global level, Social Policy Bonds could reduce the consequences of natural or man-made disasters and bring about an end to violent political conflict. Because a Social Policy Bond regime would enhance the efficiency, stability and transparency of policymaking, it could encompass goals that are currently thought to be beyond the scope of deliberate action.
For summaries of the Social Policy Bond principle, see under the Overview link in the navigation bar. For essays about how to apply Social Policy Bonds to different policy areas, click on Applications. For news of, and media reaction to, the concept see News. To read about some more detailed aspects and implications of the bonds see Features. To buy the print or Kindle versions of the definitive book about Social Policy Bonds and to read excerpts, click on The Book, where you will also see links to pdf files of the book's chapters, all of which can be freely downloaded. To see why I am ambivalent about Social Impact Bonds, click here, here or here. Answers to this and other questions can be found on the FAQs page.
People other than governments can issue Social Policy Bonds and the Issue your own page links to a paper explaining how. To keep up to date with my most recent thoughts on the bonds and policy, go to the Social Policy Bonds blog. To contact me, please see Blog/Contact me in the left-hand menu.