Social Impact Bonds: Implementation, Evaluation, and Monitoring

Abstract

Traditional approaches to public policy increasingly fail to resolve social challenges, particularly in the field of criminal justice. High rates of juvenile recidivism, for example, are often linked to inequality in education and persistent, long-term unemployment-factors which, while complex, are nonetheless conducive to preventative strategies. Social impact bonds (SIBs) are pay-for-success programs that attract private-sector, upfront funding for social interventions. If the program achieves agreed targets, taxpayer funds repay the investor. If the program fails to meet agreed targets, investors take the loss. This innovative form of social finance through public-private partnership has helped spur efficiencies and improvements in the provision and outcomes of criminal justice services. However, the success of a SIB depends on careful implementation, evaluation, and monitoring.