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Paying for outcomes through social impact bonds

New alternatives for addressing complex and enduring policy challenges


Paying for outcomes through social impact bondsMany Australians look to government to provide leadership in solving the most complex issues in our society, ranging from reducing crime to educating our youth. Vast sums of taxpayer’s dollars are invested in addressing these areas every year yet measurable outcomes, in some cases, can be elusive.

This report examines one new approach being trialled to better fund and measure the success of policy initiatives. ‘Social Impact Bonds’ (SOIs) are at heart a means to enable governments to transfer the cost of implementing initiatives from taxpayers to private investors. By tying payment to delivery of outcomes the ‘risk’ of policy failure is transferred to investors. Only successful intervention guarantees payment.

For those making and implementing policies and programs touching issues which have proved ‘resistant’  to previous approaches this paper will be of interest for detailing:

  • How SOIs must be structured to work
  • The benefits and challenges associated with SOIs
  • Checklists for government departments and agencies considering implementing SOIs.

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