Social Impact Bonds: A Magic Tool for Financing Innovation?

Have you heard about social impact bonds (SIBs) yet?  If not there are a lot of resources and discussion out there regarding this magical fix of financial woes of government.  While many have viewed these as too good of an opportunity to pass up (for example, see here and here), others have been slightly more skeptical. Here is a nice summary of three common mistakes about SIBs to provide some additional background, like they are not bonds. What are SIBs?  Well basically they are a form of impact investing, which allows for increased investment in social programs from the private sector.  A private financing is used to implement a new program that is intended to address specific social outcomes for marginalized or at risk populations.  The goals (or outcomes) are determined before the intervention and if they are not met by the program than the government does not have to repay the investors.  If they are met (i.e., the pay for success) than the government pays back the investor and a return for the private sector (who is motivated to do this by profit and social good).  So in essence it allows for the public sector to take risk and