Social Impact Bonds: Challenges and Success

In this chapter, we discuss SIBs with the objective of enriching the research agenda on social finance. Starting from the emerging challenges in the world of SIBs, we focus on three issues: i) starting points for developing a theoretical framework for SIBs; ii) characteristics of SIBs that positively contribute to their effectiveness/success; and iii) factors that contribute to the enhancement of SIBs’ financial returns. To examine these issues, we first point out the few theoretical contributions to date. Then, using the financial lens, we critically discuss the factors that could affect the SIBs’ success and financial returns. With the aim to provide a promising future outlook on SIBs, we suggest some future research questions both from a theoretical and empirical point of view.