A diagnostic framework for social impact bonds in emerging economies

• Published in: Journal of Business Venturing Insights Vol. 12; p. e00141
• Main Authors: Muñoz, Pablo, Kimmitt, Jonathan
• Format: Journal Article
• Language: English
• Published: Elsevier Inc 01-11-2019
• Subjects: Emerging economies; Outcome-based commissioning; Social economy; Social enterprise; Social impact bonds; Social investment; Emerging economies; Social impact bonds; Outcome-based commissioning; Social enterprise; Social investment; Social economy
• ISSN: 2352-6734; 2352-6734
• DOI: 10.1016/j.jbvi.2019.e00141

A social impact bond (SIB) is a new type of outcome-based social investment mechanism for enterprises operating in the social economy. They have grown across the developed world, yet its complexity may prevent from fulfilling their promises. This is particularly the case when SIB-pertinent regulatory frameworks, actors and social problems are ill-defined as in the case of emerging economy contexts. In this paper we ask, how can policy agents better identify, prioritize and weight social issues in the early design of a social impact bond? We tackle this issue by applying design methods in the co-development of a SIB diagnostic framework for emerging economies. This is both a conceptual and an actionable artifact. As a conceptual framework, it provides a holistic picture of the contextual circumstances influencing the emergence of a SIB. As a policy tool, it allows policy agents to assess and prioritize social issues and target groups and subsequently guiding policy decisions regarding investment allocation on social economy enterprises.
•Social Impact Bonds are a new alternative investment financing tool to support social enterprises, yet they are highly complex to implement.•Design specifications and assessment of unique local circumstances are problematic in emerging economies.•We apply design methods in the co-development of a SIB diagnostic framework for emerging economies.•The framework provides a holistic picture of the contextual circumstances influencing the emergence of a SIB as a social investment vehicle.•It allows policy agents to assess and prioritize social issues and target groups in the design of a SIB.•It can guide policy decisions regarding investment allocation on social economy enterprises.