Social impact bonds

[archerships]

http://www.nytimes.com/2011/02/09/business/economy/09leonhardt.html?_r=2&scp=1&sq=social+finance&st=cse

"Lately, both American and British policy makers have been thinking about how to bring some of the competitive discipline of the market to government programs, and they have hit on an intriguing idea.

David Cameron’s Conservative government in Britain is already testing it, at a prison 75 miles north of London. The Bloomberg administration in New York is also considering the idea, as is the State of Massachusetts. Perhaps most notably, President Obama next week will propose setting aside $100 million for seven such pilot programs, according to an administration official.

The idea goes by one of two names: pay for success bonds or social impact bonds. Either way, nonprofit groups like foundations pay the initial money for a new program and also oversee it, with government approval. The government will reimburse them several years later, possibly with a bonus — but only if agreed-upon benchmarks show that the program is working.

If it falls short, taxpayers owe nothing."

Posted via email from crasch's posterous

Comments

[selfishgene.livejournal.com]

'If it falls short, taxpayers owe nothing' - and if private banks go bust taxpayers don't pay to bail them out, right? The benchmarks will be revised whenever it is politically convenient to do so. Assuming they are even non-subjective in the first place.

[pentomino.livejournal.com]

I wonder if Republicans are serious enough about budget cuts, that they'll go in and sabotage these programs specifically so they don't meet their goals and get defunded.

But no, they actually like deficits. Gives their message of budget-slashing a sense of urgency, even as it makes it more nonsensical.

[selfishgene.livejournal.com]

Exactly. What benefit does a politician derive from fixing a problem compared with creating the perception he is trying to solve it? Fixing problems is hard and creates temporary gratitude. Promising to fix them is easy and inspires perpetual campaign donations, because 'this time we are serious'.

[denshi.livejournal.com]

That's pretty cool.