Social impact bonds and public service reform: back to the future of New Public Management?

Figures & data

Table 1. Distinctions between NPM and NPG governance logics, adapted from Osborne (2006, 2010).

	Governance mechanisms	Inter-organizational dynamics	Performance emphasis
NPM	The market and classical or neo-classical contracts	Competitive: independent contractors within a competitive market-place	Intra-organizational processes and outputs
SIBs as NPM	Interactions structured as hierarchical principal-agent relationships	SIB creates a marketised environment for contractors to compete based on performance data	Outcome targets incentivise improvements in service efficiency
	Coercion and payment used to motivate behavior change	Collaborative dynamics structured on contractual obligations and characterized by a lack of trust in relational incentives	Focus of innovation centered on intra-organizational improvements
NPG	Trust or relational contracts	Collaborative: preferred suppliers, and often inter-dependent agents within ongoing relationships	Inter-organizational processes and outcomes
SIBs as NPG	Creation of structures for dynamic interrelation and horizontal influence	SIB provides a vehicle for long term purposive collaboration	Outcomes incentivise collaborating actors to focus on service user value creation
	Long-term relational bonds develop trust and negotiate adjustments amongst collaborating actors	Collaborative dynamics characterized by attention to relationship quality, trust and inter-organizational connections	Outcomes free providers to innovate across organizational boundaries

Table 2. Interviewees 2015–2019.

Interviewee	Interviews at stages
SPV Board Chair	S1, S2, S3
SPV Board Member	S3
SPV Manager	S1, S2, S3
Provider #1	S1, S2, S3
Provider #2	S1, S2,
Provider #3 (exited at S3)	S1, S2, S3
Provider #4 (exited at S3)	S1, S2
Investor	S1, S2, S3
SIB development consultant #1	S1
SIB development consultant #2	S1
SIB development consultant #3	S1
Performance Information System Manager	S1, S2, S3
Government SIB funder	S1
Commissioner #1	S1, S2, S3
Commissioner #2	S1, S2, S3

Table 3. Summary of findings.

	Governance mechanisms	Inter-organizational dynamics	Performance emphasis
Stage 1 governance logics	Detailed contracts structuring transactional relationships between partners based on the achievement of pre-determined KPIs (NPM)	Contracts mandate detailed KPIs and inspection by SPV of providers (NPM)	Inter-organizational relations managed through detailed contract management and process-oriented KPIs at provider level (NPM)
	Trust and shared values a key factor driving SIB design and investor / provider recruitment (NPG)	Development of collaborative meeting space for providers (NPG)	Investors take on outcome risk to create space for innovative outcome-focused partnership (NPG)
Governance logic relationship	Reinforcing: contractual basis for relationships formalizes and strengthens relational dynamics through long-term financial commitment	Co-existing: two understandings of inter-organizational dynamics entertained: as subcontractors in competition (investors and SPV board), and as partners and collaborators (SPV staff and providers)	Reinforcing: Intra-organizational process-focused management supports transition to outcome-focused working
Stage 2 governance logics	Increasing provider scrutiny and interventionism as PIS becomes better developed (NPM)	SPV efforts to promote partnership with providers confounded by agonistic contract management role (NPM)	Providers managed based on extensive process KPIs, excluded from relevant data for improvement of own practice (NPM)
	SPV manager resists investor demands for intervention, fostering relational dynamics with providers (NPG)	Providers lobby for removal of unhelpful KPIs (removal of 20-day Well-being Star completion target) (NPG)	Accommodation between contract management and improvement needs—referral targets met (NPG)
Governance logic relationship	In tension: Availability of performance data through PIS used for performance control, prompting SPV to protect relational NPG elements	In tension: focus of inter-organizational collaboration moves from sharing and joint working to opposition and resistance	In tension: detailed performance management enables inter-organizational operation and growth, however associated administrative burden crowds out value creation emphasis
Stage 3 governance logics	SPV buffer role overturned through investor insistence on performance control (NPM)	Collapse of provider forum and loss of two providers greatly reduce opportunities for inter-organizational collaboration (NPM)	Introduction of outcome-basis for provider payment, justified as a performance control tool (NPM)
	Exit of two providers following target-based management and low margins from payment structure, diminishing opportunity for relational working (NPM)	Provider exit considered positive development by investors/SPV board since it improved operational efficiency (NPM)	Administrative burden for providers does not decrease despite translation to outcomes basis and development of the PIS (NPM)
Governance logic relationship	Segregating: investor power enforces clear principal-agent relational structure as SIB reaches stable operation	Segregating: SIB moves to a stronger transactional basis for inter-organizational working with collaborative opportunities removed	Segregating: performance management emphasis experienced as intra-organizational despite shift to outcome payments for SIB and providers; little autonomy for adaption extended to providers

Osborne, S. P. 2006. “The New Public Governance?” Public Management Review 8(3):377–87. doi: 10.1080/14719030600853022.

 Web of Science ®Google Scholar

Osborne, S. P. 2010. The New Public Governance?: Emerging Perspectives on the Theory and Practice of Public Governance, 1st ed. Abingdon, Oxfordshire: Routledge (doi: 10.4324/9780203861684.).

 Google Scholar