New development: Are social impact bonds (SIBs) viable in Italy? A new roadmap

Abstract

This article discusses the viability of social impact bonds (SIBs) in Italy. Over the past few years, SIBs have been promoted as new form of privatepublic partnership (PPP) to finance social programmes (Jackson, 2013). SIBs are not conventional bonds (Warner, 2013); they are hybrid tools with elements of either equity or debt, aimed at supporting preventative interventions through a pay-by-results contract (Liebman and Sellman, 2013). Investors, through a financial intermediary, pay for a given social service which a government considers a priority. If the service achieves the social goals agreed upfront, the government will remunerate the investors; if not, they lose their investment. The best-known SIB is the UK's Peterborough Prison SIB, which was launched in 2010 by Social Finance. The target in this case was to reduce the recidivism rate among exoffenders by 10% over a five-year period. If these performance goals are reached, the savings achieved in terms of reincarceration will be used to pay back the investors with a rate of return. If not, the investors will lose some or all of their money.

How impact investing funds invest in social‐purpose organizations: A cross‐country comparison

“…In fact, this type of sector disregards the influence investor's risk‐adjusted return and propensity to take on risk. IIFs have to focus on sectors with higher need and social development challenges, as well as areas where the public sector is less active or effective (Bengo & Calderini, 2016). This principle also applies to the focus on the geographical area.…”

SIBs and the implications on the relationship between social enterprises and the public sector: a case study from the Netherlands

“…As Wilson et al (2020) emphasise, "broader perspectives" are crucial, and this research responds by examining the SIB experience through the lens of social enterprises themselves. Furthermore, while the role of SEs in SIBs is often limited to service providers, and their experiences marginalised (Ormiston et al, 2020), their involvement can contribute significantly to market development (Bengo and Calderini, 2016). Therefore, this research seeks to redress this imbalance in the current academic discussion by providing the perspective of SEs.…”

“…Nevertheless, as predominantly expressed by different scholars (see, for example, Clifford and Jung, 2016 or the last call from Broccardo et al, 2020; or generally the work done by GO Lab in terms of research of SIBs), SIBs as research subject needs more analysis and understanding. Specifically, the role of social provider is often marginalised in the scholarly debate (Ormiston et al, 2020), as well as the voice and perspective of the third sector movement are neglected (Patetta and Enciso Santocildes, 2022) despite the demand for SIB schemes from the social sector can contribute to the development of this market (Bengo and Calderini, 2016).…”

Past, present and future of impact investing and closely related financial vehicles: a literature review

“…George et al , 2020), the USA (e.g. Heinrich and Kabourek, 2019), while in other areas, such as Italy (Bengo and Calderini, 2016), development has been hindered.…”