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The ethical status of social impact bonds

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  • Morley, Julia

Abstract

I develop a framework for assessing the ethical status of social impact bonds (SIBs), drawing on evidence from UK and US SIBs that address recidivism, education, homelessness and healthcare. I extend work on the ethics of markets by Debra Satz to render it suitable for application to SIBs, highlighting informational weaknesses, power imbalances and the generation of harm. Ethical issues observed include the lack of informed consent, denial of care, prioritisation of profit over therapeutic effectiveness and unfair contracting. I find that SIBs are morally permissible in principle but are at great risk of becoming unethical in practice.

Suggested Citation

  • Morley, Julia, 2019. "The ethical status of social impact bonds," LSE Research Online Documents on Economics 100426, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:100426
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    File URL: http://eprints.lse.ac.uk/100426/
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    References listed on IDEAS

    as
    1. Mildred E. Warner, 2013. "Private finance for public goods: social impact bonds," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 16(4), pages 303-319, December.
    2. Satz, Debra, 2010. "Why Some Things Should Not Be for Sale: The Moral Limits of Markets," OUP Catalogue, Oxford University Press, number 9780195311594.
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    Cited by:

    1. Eleonora Broccardo & Maria Mazzuca & Maria Laura Frigotto, 2020. "Social impact bonds: The evolution of research and a review of the academic literature," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(3), pages 1316-1332, May.
    2. Rosella Carè & Riccardo De Lisa, 2019. "Social Impact Bonds for a Sustainable Welfare State: The Role of Enabling Factors," Sustainability, MDPI, vol. 11(10), pages 1-23, May.

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    More about this item

    Keywords

    Ethics; social impact bonds; civil society;
    All these keywords.

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook

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