Three upbeat stories for Bastille Day – the smell of revolution is clearly in the air – one from Western Australia outlining how the state government is looking at recidivism being tackled by SIBs while there is news from our emerging market cousins DIBs and a third article which actually refers to SIBs as SIBs as opposed to one of its many derivative names!
WA Government Looks To Private Investment To Address High Re-Imprisonment Rates
Jessica Strutt – ABC
The Department of Corrective Services is hoping private investment can help address WA’s high re-imprisonment rates.
Corrective Services Commissioner James McMahon confirmed he engaged not-for-profit organisation Social Ventures Australia to assess the feasibility of social benefit bonds, which are already used in the UK, the USA and are being trialled in New South Wales.
Under a social benefit bond, the Government contracts a company to deliver a program, for example diversionary or rehabilitation programs aimed at reducing re-offending.
The company raises money from private investors and pays a not-for-profit organisation to run the program.
If the program proves successful and delivers agreed targets – in this case reducing reoffending rates – the Government pays the company. The better the results, the higher the return to investors.
WA is spending more than ever on the prison and justice system but Inspector of Custodial Services, Neil Morgan, said rates of re-offending remained high, particularly for Aboriginal and juvenile offenders.
He said it was time for WA to start looking for new ways to tackle the issue.
“I don’t think we have a choice,” he said.
A New Way To Finance Aid To Developing Countries
Anne Field – Forbes
There’s a new form of pay-for-success financing out there and it’s called the Development Impact Bond (DIB). And a DIB to improve the sorry state of girls’ education in government-run schools in India recently was announced.
DIBs are based on Social Impact Bonds (SIBs), which I’ve written about here and here, but they’re focused on developing countries and international development. Like SIBs, DIBs seek to address a particular social problem. They include an outcome payer—usually a foundation or government agency focused on international development—which enters into a contract for specific, measurable social outcomes (i.e. a reduction in recidivism or improvement in maternal health). A service provider then works to make the results happen, using working capital from investors. An intermediary organization manages relationships between the various players and an independent evaluator assesses the outcomes. Payment is contingent on successfully meeting agreed-upon measures.
Social Impact Bonds Emerge
Molly Young – Our Weekly
Social programs have always had a number of problems working against their success. Efforts to finance healthcare, education, and prison reform often lack sufficient funds, and the bureaucratic red tape that can interfere with—if not completely stalemate a program’s effectiveness—are the most common walls such programs often run into.
A new method of financing these programs that could change all that by streamlining funds and cutting back on the bureaucracy has been initiated internationally. This new financing method involves using Social Impact Bonds (SIBs).