Social Impact Bonds in Nonprofit Health Care: New Product or New Package?

Mark Pauly and Ashley Swanson

No 18991, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This note considers a relatively new form of financing for social services, the "Social Impact Bond." Proponents of Social Impact Bonds argue that they present a solution to several problems in funding social services, including performance measurement and the distribution of risk. Using a simple model, we demonstrate that Social Impact Bonds have many features present in standard financing arrangements. They will lead to greater program success when investors' effort can positively influence outcomes, but are unlikely to do so otherwise. We conclude that the value of this funding innovation will be strongly context-dependent.

JEL-codes: H0 H51 I1 I10 I13 I18 (search for similar items in EconPapers)
Date: 2013-04
New Economics Papers: this item is included in nep-hea, nep-ppm and nep-soc
Note: EH PE
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