“Private Capital for Public Good”: Social Impact Bonds and the New Market-Based ‘Public Responsibility’ Initiatives

Presentation by Robert Ogman, Doctoral Researcher at De Montfort University (U.K.)

March 10, 2015
6:00 to 8:00 p.m.
Sociology Lounge, Graduate Center, CUNY.

This presentation focuses on Social Impact Bonds (SIBs) as part of an emerging crisis governance strategy. Against many expectations, post-2008 developments did not follow a “postneoliberal” trajectory (Brand and Sekler 2009), but rather deepened modes of market governance through the policies of fiscal austerity (Peck 2012) and the associated insulation of public authority in a “post-democracy” (Jessop 2013; Crouch 2011). However, this has exacerbated the social crisis and further eroded political legitimacy. As a result, we’re witnessing the growth of policy focused on “social impact” and “public responsibility”, yet, not through the roll-back of markets, but through the development of a “social investment market”. This presentation focuses on a critical example of this, the “Social Impact Bond” (SIB), as a “new [initiative] of ‘public responsibility’ within market modes of governance” (Sprague 2010).

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Introduced in 2010, more than 100 SIBs now exist across the globe, concentrated mostly in the U.S. and U.K. These promise to “blend fiscal and social returns” through a financial product based on the performance of targeted social policy interventions. In times of austerity, these claim to leverage private capital for public good, by offering private returns to investors when programs effectively lower levels of recidivism, unemployment, homelessness, and hence lower government expenditures.

This presentation takes a Cultural Political Economy approach (Sum and Jessop 2014) to situate SIBs within the processes by which hegemony is restored and reshaped. I will describe therefore both institutional structure of this policy instrument and its associated discursive repertoire, and consider its broader political significance as a crisis governance strategy. SIBs will be situated as part of a “hegemony project” (Kannankulam and Georgi 2014) that explicitly responds to the problems of “trickle-down economics”, yet which simultaneously rejects a politics of redistribution and decommodification. My presentation will therefore focus on how SIBs construct “crisis narratives” and “imagined recoveries” (Sum and Jessop 2014), and shape and limit the institutional “corridors” for political action (Brand 2014).

Robert Ogman is a doctoral researcher at the Department of Politics and Public Policy at De Montfort University (Leicester, U.K.), where he focuses on Social Impact Bonds as part of an emerging crisis governance strategy in the U.K. and U.S. He previously focused on social movement responses to the crisis, and published a study for the Rosa Luxemburg Foundation (Berlin), “The U.S. Occupy Movement – Since the Eviction from the Squares” (http://www.rosalux.de/publication/40331/the-us-occupy-movement-since-the-eviction-from-the-squares.html). He received his MA in Political Science from The University of Potsdam, and his BA from The New School. Originally from the U.S., he now resides in Berlin, Germany.

 

One thought on ““Private Capital for Public Good”: Social Impact Bonds and the New Market-Based ‘Public Responsibility’ Initiatives

  1. Oona Houlihan

    “… exacerbated the social crisis …” I am at a bit of a loss: “austerity” policies means that the government takes lees money from the available funds in the “market” that could finance jobs etc. in other words, if the government taxes less and/or issues less government bonds, by and large, more money remains in the “real” economy, no? If, on the other hand, the government “skims” off such monies via taxes and/or bond issuance, then this money flows into the government’s coffers, only to be redistributed along rather mostly arbitrary lines. However, in collecting and then redistributing, the government, which is not a not-for-profit run by people doing “pro bono” jobs but pays considerablv wages to the tax COLLECTORS as well as the REDISTRIBUTORS of such monies, “wastes”, by design, some of that money. How on earth can, with this reduced input, you expect the economy to be better off than if you left the moneys there in the first place?

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