Social impact bonds

Abstract

Government of India spends billions of dollars every year in social projects to address serious social and environmental problems (e.g., school dropout rate, infant mortality, environmental pollution, rural electrification etc.). The major challenge for the government is to assess the effectiveness of the programmes. What is the guarantee that the money disbursed actually reaches the beneficiary? How do you ensure the outcome of a project? Several laudable experiments, on social issues, fail and taxpayers legitimately question government not to spend their money on ‘failed’ experiments. The pragmatic governments, therefore, would want to spend money on successful experiments. Tax payers also would not mind that spending.