Social Impact Bonds (SIBs) are a new mechanism for delivering public services. This article reviews the emerging SIB literature in high‐income settings. It identifies three distinct narratives: a public sector reform narrative; a financial sector reform narrative; and a cautionary narrative. These are analyzed relative to three themes: public versus private values; outcomes contracting; and risk allocation. The first two narratives are complementary and offer a ‘win‐win’ portrayal of SIBs. The third narrative challenges this dominant commentary by highlighting potential risks. There is limited empirical evidence on active SIBs to support these narratives. SIBs may have the potential to align public and private interests while improving outcomes for people affected by entrenched social problems, but this is yet to be established and appears less probable than the third more cautionary narrative. More empirical research is needed to consider the potential risks, drawbacks, benefits and alternatives of SIBs in different settings.

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Social Impact Bonds (SIBs) are a novel financing mechanism for public services delivery. This special issue about SIBs in the UK argues that they necessitate closer examination to understand the implications for all stakeholders. This introductory paper critically explores and challenges dominant practitioner narratives of SIBs as "win-win" solutions for governments and service providers. While SIBs may foster innovation it is unclear if they deliver better value given the complexity of public services. SIBs are a strategically ambiguous policy tool and policymakers should be cautious about SIBs due to contractual complexity and issues with ethics, governance, accountability and transparency. ARTICLE HISTORY• Social Impact Bonds are a nascent area of academic research that merits further multidisciplinary analysis. • SIBs are a strategically ambiguous policy tool. • There is insufficient evidence as to whether and how SIBs deliver better outcomes than conventional forms of financing.

Social Impact Bonds (SIBs) offer an opportunity to explore the use of evidence to inform public policy and commissioning decisions in both discursive and practical terms in what are frequently highly politicized contexts. We identify three potential mechanisms by which SIBs may promote evidence use and explore these through empirical findings drawn from a three-year evaluation of SIBs applied to health and social care in the English NHS. IMPACT This paper highlights three mechanisms by which SIBs may encourage evidence-informed policy-making. First, the ability of SIB financing to promote specific interventions for which a positive evidence base already exists. Second, the opportunities that SIB-financed programmes offer for the promotion of evidence use through improved local data collection practices. Third, the opportunities that SIB-financed interventions offer for formal evaluation. The authors tested these mechanisms; the implications of the results for policy-makers, public managers and other interested parties are presented in the paper.

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