ABSTRACT
Social Impact Bonds (SIBs) are contracts that have been suggested as a cost-beneficial alternative to public-private partnerships to support social services. The arrangements involve lenders who invest a significant amount of upfront capital in preventive interventions whose established effectiveness mitigates the risk of financial loss. They have been implemented worldwide with success, but they are novel constructs within the context of public health interventions. Against a backdrop of fiscal constraints, the investment of significant capital to generate significant cost-savings with the risk disproportionately held by lenders-with the possibility of significant returns on investment as a cut in response to those savings-is a potentially quite lucrative venture. Additionally, this involves a transfer of risk from the taxpayer, to whom the government is not liable for any ineffective or inefficient rendering of services, to a third party lender who disproportionately bears the financial risk.
