Outcome-based contracting metrics targets and incentives

: the case of portuguese social impact bonds

Abstract

Over the past decade, Social Impact Bonds (SIBs) emerged as an innovative outcome-basedfinancing solution for social programs. Despite the general benefits associated with themechanism, there are concerns regarding the appropriate metrics and evaluation methods touse. The analysis has considered two major aspects which may affect SIB success anddiffusion: the definition of outcome metrics and its underlying incentives. To shed some lighton these issues, six contracts were considered and discussed based on interviews with keystakeholders, providing an analysis of the challenges in the implementation of outcome-basedmechanisms, mostly SIBs, in Portugal. The main findings highlight: (1) the need to developfurther incentives for all stakeholders through more sophisticated metrics; (2) to decrease theadministrative complexity of outcome reporting processes; and (3) to formally structure apotential integration of the intervention's methodologies and insights into public policy,supported by more robust evaluations. Overall, the dissertation confirms the main advantagesand struggles faced by practitioners worldwide, with additional operational challengesresulting from the unique nature of the Portuguese SIB ecosystem. In particular, the existingconstraints associated with the use of European Funds by the public outcome payer.

Date of Award	27 Jan 2021
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Francesco Longo (Supervisor)