New Zealand’s social investment experiment

Abstract

The notion of prioritising ‘productive’ social investments over ‘consumptive’ social spending has long been advocated but only sporadically applied. Since 2011, however, New Zealand governments have implemented an ambitious, multi-agency social investment agenda that promises to overhaul public social spending through analyses of citizen-derived data. This commentary focuses on the development and features of the social investment agenda. In doing so, it discusses the apparent primacy of fiscal outcomes over social outcomes, and the practices and politics of data-driven governance.

Bringing finance inside the state: How income-contingent loans blur the boundaries between debt and tax

“…Research in comparative political economy has advanced understandings of different types of state-instituted marketisation in the ‘varieties’ and ‘worlds’ of welfare capitalism. The internalisation of financial ways of calculating and organising by states in higher education, and potentially in other domains via the ‘social investment’ model (Baker and Cooper, 2017; Morel et al., 2012), without necessarily involving private capital markets, signals the need for further political economic research to account for the financial reconstitution of fiscal sovereignty.…”

Investable poverty: Social investment states and the geographies of poverty management

“…For a time, the post-1990s variety of social investment state was largely an abstract notion: part of elite policy consensus, but fitfully applied. Since the Global Financial Crisis of 2008, however, a number of conditions have crystallised – including programs of fiscal austerity and resulting crises of social reproduction, combined with enduring public expectations for social programs, and new-found data analytics capacities – moving social investment from the realm of abstract, elite consensus and increasingly toward actual policy experimentation and institutionalisation (Baker and Cooper, 2018).…”

“…Social investment discourse draws a distinction between different forms of social expenditure, with 'productive' social investments distinguished from 'consumptive' social spending (Baker and Cooper, 2018). Social investments are viewed as productive when the type and/or method of social expenditure develops human capital and, thus, generates returns-on-investment (e.g.…”

“…On maturity, ‘[p]roceeds from the realization of the value of a life bond would be electronically deposited into the registered bank account of the bond owner’ (Attard, 2012; see also Kish and Leroy, 2015). Third, in 2011, the New Zealand government committed itself to reducing the ‘forward fiscal liability’, or life-time public cost, of the welfare-recipient population through an actuarial ‘investment approach’ (Baker and Cooper, 2018). The approach involved focusing on initiatives – such as benefit sanctions, behavioural conditions and targeted services – that might reduce the life-time public cost of the welfare-recipient population, thereby offering fiscal returns-on-investment, absorbed into public coffers.…”

Measuring Māori children’s wellbeing: A discussion paper

“…Currently, wellbeing is conceived by the Treasury as consisting of financial, social and human capital within the context of natural capital. This signals a broadening of the social investment agenda of the previous government, which was solely focused on fiscal returns to the exclusion of social wellbeing (Baker & Cooper, 2018). However, wellbeing is still not being seen within the context of a Treaty of Waitangi partnership that acknowledges Mäori rangatiratanga.…”