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Social Service, Private Gain
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Social Service, Private Gain

The Political Economy of Social Impact Bonds

Jesse Hajer and John Loxley
University of Toronto Press, 2021

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Editorial Rating

8

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  • Overview
  • For Experts
  • Eloquent

Recommendation

Social impact bonds are all the rage among financiers who argue that the profit motive can help nations and municipalities tackle such thorny issues as dysfunctional families and chronic crime. Balderdash, say authors Jesse Hajer and John Loxley, although they make their argument in a far more measured way. The professors detail the rise of social impact bonds, noting that this new financing mechanism is necessary only because governments have gutted social programs. Their well-argued case may not convince all readers, but their work offers important food for thought.

Take-Aways

  • Social impact bonds (SIBs) have emerged as a new way of financing social services.
  • SIBs are complicated contracts involving multiple participants, including government agencies, service providers and investors.
  • Most SIBs have been issued in the United Kingdom and the United States.

About the Authors

Jesse Hajer is an economics professor at the University of Manitoba. The late John Loxley was also an economics professor there, as well as a fellow of the Royal Society of Canada.

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