Forbes contributor Carrie Sheffield is spot on in both her commitment to free minds and free markets but also in appreciating how SIBs can revolutionise the provision of services, improving society and stopping dumb government spending which fails to achieve its aims. An excellent article to enjoy in today’s SIB News:
If conservatives want to help bring private sector mentality to public affairs, one place to explore is an interesting approach first conceived across the pond.
A raft of new states and cities are experimenting with the idea of SIBs, financial products that hold intriguing promise, offering private capital in exchange for measurable, permanent progress addressing societal problems. These are typically chronic problems that exacerbate the government and could eventually be shifted onto private shoulders.
Think of it a bit like crowd sourcing or Kickstarter for social problems. Instead of funding an indie band you’re helping stop homelessness. There is risk involved; in many ways investors could view the setup potentially as a pure donation they can kiss goodbye. If a SIB project outcome isn’t met by a certain date—in many cases saving a certain amount of taxpayer dollars—the government pays nothing back to investors. But if the project achieves its goal, then the government pays investors back with a financial return. And of course the monetary reward is on top of intangible social benefit investors help create, a win-win all around.