ABSTRACT
Social impact bonds (SIB) emerged in the early 2000s in the United Kingdom. This chapter provides an overview of the historical use of SIBs, their growth in use throughout the world and the prospects of SIBs playing a role as a social policy tool. An SIB is a policy tool structured to bring several actors together. The key actors are a government, a non-profit service provider, investors, an external evaluator, and the facilitating intermediary. Unlike traditional bonds, as political risks increase, governments are less likely to offer large enough incentives to encourage proper investment. This leads to multiple reactions by both markets and governments. Both government and philanthropic capital have been used to secure private investment. SIBs are not without their supporters, and those supporters make many claims.
