IDEAS home Printed from https://ideas.repec.org/a/rse/wpaper/v8y2014i2p141-150.html
   My bibliography  Save this article

Challenges for European welfare systems. A research agenda on social impact bonds

Author

Listed:
  • Giulio Pasi

    () (Institute for Advanced Study of Pavia)

Abstract

First, the Social Business Initiative of the European Commission and then the G8 Social Impact Investment Taskforce: these are meaningful indicators of a novelty overlooking the scene of European public policies. While many advocate the numerous benefits that social finance, and especially Social Impact Bond (SIB), will bring in the welfare systems, it seems useful to point out a considerable and comprehensible confusion. The complexity of the instruments at issue and the difficulties arisen in the first trials, require designing a depth exploration, in particular with regard to SIBs. A SIB is a financial transaction that brings together seemingly contrary forces that turn out to be uniquely capable of producing new life forms when taking advantage of their interdependencies: through a complex partnership between investors, social service providers and public administrations, SIBs develop a contractual structure that provides reimbursement and remuneration of investments by virtue of potential savings related to the social outcomes reached by social service providers. Therefore, at the same time SIB may acts as leverage for social service providers, a tool for the sustainability of public spending and an asset class for investors. The implementation of these financial instruments raises a number of important challenges to deal with, both from the point of view of its economic features and the related legal issues. The main goals this paper aims to pursue are: (i) find the socio-economic rationale of SIBs, (ii) outline an introductory and theoretically acceptable framework for the study of SIBs, (iii) indicate a possible agenda of the crucial and outstanding problems to be addressed. In other words, the aim of this paper is to sketch a possible road map to meet the challenges that Europe is facing, in the belief that an essential contribution will come from socio-economic research.

Suggested Citation

  • Giulio Pasi, 2014. "Challenges for European welfare systems. A research agenda on social impact bonds," Review of Applied Socio-Economic Research, Pro Global Science Association, vol. 8(2), pages 141-150, June.
  • Handle: RePEc:rse:wpaper:v:8:y:2014:i:2:p:141-150
    as

    Download full text from publisher

    File URL: http://reaser.eu/RePec/rse/wpaper/REASER8_16Pasi_P141-150.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Jade Wong & Andreas Ortman & Alberto Motta & Le Zhang, 2013. "Understanding Social Impact Bonds and Their Alternatives: An Experimental Investigation," Discussion Papers 2013-21, School of Economics, The University of New South Wales.
    2. Esty, Benjamin C. & Megginson, William L., 2003. "Creditor Rights, Enforcement, and Debt Ownership Structure: Evidence from the Global Syndicated Loan Market," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 38(01), pages 37-60, March.
    3. João Pinto, 2014. "What is Project Finance?," Working Papers de Economia (Economics Working Papers) 01, Católica Porto Business School, Universidade Católica Portuguesa.
    4. Benjamin C. Esty, 2004. "Why Study Large Projects? An Introduction to Research on Project Finance," European Financial Management, European Financial Management Association, vol. 10(2), pages 213-224.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    social impact bonds; social finance; impact investing; project financing; public-private partnership; welfare system; social service; public policy.;

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • K12 - Law and Economics - - Basic Areas of Law - - - Contract Law
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship
    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rse:wpaper:v:8:y:2014:i:2:p:141-150. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Manuela Epure). General contact details of provider: http://edirc.repec.org/data/pgsaaea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.