New development: Complexity and rhetoric in social impact investment

Existing public policy approaches to the social impact investment market take a linear view of both social innovation and economic markets. This article analyses the rhetoric of the market to explain both the persistence of a linear view and its inadequacy for dealing with the complexity of bridging social and financial goals. It then outlines complexity-sensitive theories of social innovation and economic markets and their import for social impact investing. IMPACT: Social Impact Bonds (SIBs) and similar public policy approaches to social impact investment have fallen short of expectations for large-scale social change and financial savings. This article highlights the role that neoclassical assumptions about the dynamics of both economic markets and social innovation has played in this failure. It explains the need for practitioners to operationalize a more contemporary and complex understanding of markets and social change by crafting adaptive ability into social impact investment instruments.