Social Impact Investing

SOCIAL IMPACT INVESTMENT: BUILDING THE EVIDENCE BASE
Figure 4.4. Degree of Publicness
Source: OECD.
4.24 Social goods have different characteristics than pure private or public goods insofar as they
would not completely exclude benefits accruing to non-target beneficiaries, but there are barriers which
limit the opportunities for non-target beneficiaries to access the good without incurring any additional cost
(important for the profit-principle). On one hand, goods and services that are excludable could more
efficiently be provided under a fully private model. On the other hand, goods and services for which it is
very difficult to exclude potential beneficiaries tend to be provided under a public delivery approach. In a
list of SII attributes, each social good or service can be categorised according to its “degree of publicness"
(see table 3).
Table 4.3. List of attributes for Good\Service Characteristics
CHARACTERISTICS Attributes of the Characteristic Eligibility *
3. Good\Service
Degree of
publicness
* Eligibility used in the OECD definition for the purpose of this report.
Source: OECD.
Public
(SII)
Private
4.25 The practical use of this attribute for defining SII goods is to some extent limited, because it is
challenging to accurately measure the “degree of publicness” of a good\service and fully identify the scope
of the spillover effects of providing such good\service. However, this characteristic is crucial for devising
policy because while a fully public good should be provided within a public model, private goods should
be left for the private initiative, without any intervention of public sector authorities beyond acting upon
the regulatory side.
4.26 The hybrid nature of some social goods\services might require some forms of public-private
collaboration, in which some SII-like models of provision fit. The decision of whether a good is public or
private or semi-public will be left to policymakers.
4.27 Table 4.4 depicts a matrix that provides a framework for further clarifying why the SII approach
should be defined as between the pure public and pure private models of provision. The table builds on the
expectation of SII to produce social benefits, and measures these as social outcomes (the two rows
distinguish social impacts at the individual and society levels) and cost benefits, or efficiency gains (the
two columns distinguish economic efficiency at the individual level from systemic/society efficiency
gains). 10
OUT
IN
OUT
10 . Please note that these should not be regarded as dichotomous but rather as vectors flowing from the
individual to the societal\systemic levels. There is also a parallel deliberately implied here with spillovers
and externalities as well as with macro and micro impacts.
© OECD 2015 49