Social Impact Investing

SOCIAL IMPACT INVESTMENT: BUILDING THE EVIDENCE BASE
5. CONTEXT SETTING: DIFFERENCES IN SOCIAL NEEDS AND SERVICE DELIVERY
ACROSS SELECTED COUNTRIES
This chapter looks at the context for social impact investment across the G7 and
Australia. This includes looking at changes in social needs and direct public sector
provision over time as well as a discussion of the different models of social service
provision in each country. This chapter covers: a review of trends in social needs in
key service sectors (health, employment and education, housing, criminal justice and
family services); trend changes in public spending in the above areas; models of
social services provision; evidence of best practice in this area; and, methods and
issues for measuring social impact.
5.1 Introduction
5.1 The contexts in which Social Impact Investment (SII) takes place, country-to-country, will have
a significant bearing on the potential for SII to have a lasting and positive role in society. Key contextual
factors include: the extent to which present legislation and financial regulation plays a role in facilitating
social impact investment; the extent of social need by sector; the evolving size and role of public
intervention, also by sector; varying models of social service provision in each country, stakeholders and
their present effectiveness; and, the political economy of private intervention. 18
5.2 The variation in these contexts can inform how different SII approaches may be more appropriate
in some sectors than in others, and easier to implement in some countries than in others. The purpose of
this chapter is to contribute to the discussion of how SII could fit in to present forms of social impact
investment by mapping key social-contextual factors in the G7 and Australia.
5.2 Social outcomes and social spending
5.3 The space in which SII could take a positive role in social development provides further
contextual information for assessing the need for SII, and its likelihood to have a meaningful and lasting
effect. Understanding how different countries achieve preferred social outcomes, relative to the extent of
public social interventions, is important for gauging this ‘SII market space’. Of course, the final ‘market
space’ will also be determined by the extent to which SII might want to go ‘above and beyond’ the public
efficiency and effectiveness, but because governments are the largest investor in social causes in every
country, the specific role of public spending relative to key social outcomes is the most appropriate starting
point for such an estimate.
5.4 Below, two sections will discuss trends in social outcomes and public expenditure from across a
range of social sectors, with a focus on what these data might mean for SII.
18. Historical factors also play a role, but are beyond the scope of this paper.
58 © OECD 2015