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Social impact bonds: a wolf in sheep’s clothing? 26 April 2014

Posted by cooperatoby in Social enterprise.
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Very good critique of social impact bonds from a team at Glasgow Caledonian University.

Basically:

• It is difficult to agree outcome indicators – potential for disputes
• How to document mechanism – attribution difficulty – risk of simplistic cause-effect model ignoring other factors
• Unintended consequences – diverts 3rd sector activity from what is need to what is measurable, creaming of ‘easy’ clients
• Distorts definition of social enterprise – smokescreen for privatisation
• Most SEs too small to use social investment – concentration of provision in oligopoly of large corporations that have the capital to manage cashflow. Local needs will be left behind
• Public accountability obscured as intermediary chooses providers. Asymmetric information accumulates in hands of provider, preventing oversight & facilitating fraud
• Financial language buries the important distinctive basic principles of SE – drift towards profit-making so-called ‘social enterprises’
• Attacks independence of 3rd sector
• Moral dimension – is it right to profit from social need? Change in ethos
• Instability as derivative market develops

Now also in Italian (thanks Flaviano).

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Comments»

1. armelleprade - 29 April 2014

Thanks Toby, very interesting article and worrying analysis of the deadweight and displacement effects… The 3rd sector distinctive features, among which independance, are really vital.


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