Social Impact Bond assetization struggles: A comparative case study of the United Kingdom and Germany

Abstract

Assetization has become a promising analytical lens in the field of economic sociology and related disciplines. It highlights the creation of reliable income streams for investors instead of competition, tradability and the short-term nature often highlighted in the analysis of (financial) marketization. The Social Impact Bond (SIB) is a noteworthy phenomenon to explore the potential development of assetization. The SIB developed from an original idea, wherein the risk for social programme delivery was supposed to transfer from the state to private investors, to a scheme, where the state increasingly de-risks private investors, particularly in the United Kingdom. We present a comparative case study of two SIBs from a SIB-hesitant institutional environment (Germany) and the United Kingdom, a country that supports SIBs through government investment funds. In both cases, we find assetization not being a straightforward process, which is why we focus on assetization struggles. We find assetization struggles along two dimensions: first, we observe actors struggling in relation to the investor return element of the SIB, second, we observe actors struggling in relation to the question of how, and to what extent the SIB framework should change the organization and practices of social work on the ground.

Keywords:

• financialization
• marketization
• social work
• public asset
• public sector reform

Acknowledgements

Both the authors wish to thank Barbara Brandl, Veit Braun and Ute Tellmann for their support, patience and encouragement of this work. We would also like to thank the anonymous referees and the Economy and Society editor for comments that improved the paper. Finally, we thank Debra Hevenstone for her conversations, constructive feedback, and her overall leadership of the project from which we draw our data. The authors remain solely responsible for the findings and claims.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Ethical approval

This study received ethical clearance from the ethics review panel at the London School of Hygiene and Tropical Medicine in 2019. Ref: 16119.

Additional information

Funding

We would like to thank the Swiss Network for International Studies for funding part of this research. https://snis.ch/projects/new-public-policy-financing-models-innovative-or-ineffective/

Notes on contributors

Lisa Knoll

Lisa Knoll is a sociologist working at the Faculty of Arts and Humanities at the University of Paderborn, Germany. Her research focuses on sustainable and impact finance, carbon trading and social impact bonds, in particular. Currently, she works as a principal investigator at the joint BMBF-funded project Climate Finance Society (ClimFiSoc) at the University of Paderborn.

Alec Fraser

Alec Fraser is a Senior Lecturer in Public Policy and Management at King’s Business School, King’s College London, United Kingdom. His research focuses on the use of evidence in policymaking and practice across the public sector. He has researched the development of social impact bonds and outcomes-oriented reforms in public service delivery in the United Kingdom and internationally over recent years.