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In the wake of austerity: social impact bonds and the financialisation of the welfare state in Britain

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  • Emma Dowling

Abstract

This paper provides an analysis of the financialisation of the British welfare state. In a continuation of neo-liberal privatisation and labour market activation, the financialised welfare state pursues a policy of welfare retrenchment, while engaging in forms of social engineering aimed at producing self-responsibilised individuals and communities who are financially literate, ‘investment-ready’ and economically productive. New financial instruments such as social impact bonds are deployed to these ends, both to ‘solve social problems’ and enable cost saving. Through the use of such financial instruments, the implementation of regulatory infrastructures and tax incentives, the financialised welfare state becomes a vehicle for the transfer of wealth from the public to private investors, while subjecting the domain of social policy to the vicissitudes of global financial markets. This paper offers a critique of these developments, situating the case of Britain within the broader global context and with regard to the implications for understanding the current political economy of the welfare state.

Suggested Citation

  • Emma Dowling, 2017. "In the wake of austerity: social impact bonds and the financialisation of the welfare state in Britain," New Political Economy, Taylor & Francis Journals, vol. 22(3), pages 294-310, May.
    • Handle: RePEc:taf:cnpexx:v:22:y:2017:i:3:p:294-310
    DOI: 10.1080/13563467.2017.1232709
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    References listed on IDEAS

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    1. Blyth, Mark, 2013. "Austerity: The History of a Dangerous Idea," OUP Catalogue, Oxford University Press, number 9780199828302.
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    Cited by:

    1. Mario La Torre & Annarita Trotta & Helen Chiappini & Alessandro Rizzello, 2019. "Business Models for Sustainable Finance: The Case Study of Social Impact Bonds," Sustainability, MDPI, vol. 11(7), pages 1-23, March.
    2. Florence JANY-CATRICE, 2020. "Une économie politique des mesures d’impact social," CIRIEC Working Papers 2014, CIRIEC - Université de Liège.
    3. Albertson Kevin & Fox Chris & O’Leary Chris & Painter Gary, 2020. "Towards a Theoretical Framework for Social Impact Bonds," Nonprofit Policy Forum, De Gruyter, vol. 11(2), pages 1-10, July.
    4. Eleonora Broccardo & Maria Mazzuca & Maria Laura Frigotto, 2020. "Social impact bonds: The evolution of research and a review of the academic literature," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(3), pages 1316-1332, May.
    5. Shaukat Ansari, 2022. "Cash Transfers, International Finance and Neoliberal Debt Relations: The Case of Post‐apartheid South Africa," Development and Change, International Institute of Social Studies, vol. 53(3), pages 551-575, May.
    6. Walker, Thomas & Goubran, Sherif & Karami, Moein & Dumont-Bergeron, Adele & Schwartz, Tyler & Vico, Kalima, 2023. "Mainstreaming social impact bonds: A critical analysis," Finance Research Letters, Elsevier, vol. 53(C).
    7. Golka, Philipp, 2023. "Impact investing and the politics of leverage: towards a meso-level perspective on derisking," SocArXiv 9uvzw, Center for Open Science.
    8. Florence Jany‐Catrice, 2022. "A political economy of social impact measurement," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 93(2), pages 267-291, June.
    9. Gareth Bryant & Ben Spies-Butcher, 2020. "Bringing finance inside the state: How income-contingent loans blur the boundaries between debt and tax," Environment and Planning A, , vol. 52(1), pages 111-129, February.
    10. Hulya Dagdeviren & Ewa Karwowski, 2022. "Impasse or mutation? Austerity and (de)financialisation of local governments in Britain [Regul(ariz)ation of fringe credit: Payday lending and the borders of global financial practice]," Journal of Economic Geography, Oxford University Press, vol. 22(3), pages 685-707.
    11. Paweł Mikołajczak, 2023. "Comparative study of social impact bonds – capital per beneficiary and scheme duration," Bank i Kredyt, Narodowy Bank Polski, vol. 54(2), pages 191-220.
    12. Rosella Carè & Riccardo De Lisa, 2019. "Social Impact Bonds for a Sustainable Welfare State: The Role of Enabling Factors," Sustainability, MDPI, vol. 11(10), pages 1-23, May.
    13. Rosella Carè & Stella Carè & Nathalie Lévy & Rabia Fatima, 2023. "Missing finance in social impact bond research? A bibliometric overview between past and future research," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(5), pages 2101-2120, September.
    14. Mario La Torre & Helen Chiappini (ed.), 2020. "Contemporary Issues in Sustainable Finance," Palgrave Studies in Impact Finance, Palgrave Macmillan, number 978-3-030-40248-8, December.
    15. Muñoz, Pablo & Kimmitt, Jonathan, 2019. "A diagnostic framework for social impact bonds in emerging economies," Journal of Business Venturing Insights, Elsevier, vol. 12(C).
    16. Harvie, David & Lightfoot, Geoff & Lilley, Simon & Weir, Kenneth, 2021. "Social investment innovation and the ‘social turn’ of neoliberal finance," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 79(C).
    17. Paul Langley, 2020. "The folds of social finance: Making markets, remaking the social," Environment and Planning A, , vol. 52(1), pages 130-147, February.

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