Government budgets are tight during the recession, with cuts to
public health budgets being announced on almost daily basis.
What strategies are available to enhance revenues for public
welfare programs–for the kinds of health and education expenses
that won’t “pay for themselves”(at least in the short term), and
therefore are often the first to get slashed in hard times?
Raising tax rates among the wealthy, and introducing new taxes
like a Robin Hood Tax, have been widely discussed. But some
researchers have also studied entirely new revenue-generating
strategies for social welfare programs that don’t rely on
taxes—including a popular pay-for-performance scheme based on
“social impact bonds” (SIBs). How they work A SIB is one of many
“payment by results” plans. Just like other types of bonds (for
instance, the municipal bonds we invest in to fund a local
community college), SIBs involve private investors paying for a
particular program that funds some social welfare operation. But
SIBs are organized such tha