Research Papers

Feasibility Analysis of Pay-for-Success Investment Strategies in Road Safety

Version 1
Date added June 26, 2017
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Category 2017 CARSP XXVII Toronto
Tags Policy and Practice, Session 1C
Author/Auteur Mark Hearson
Stream/Volet Policy and Practice

Slidedeck Presentation Only (no paper submitted)

1C_1_Hearson

Abstract

Pay-for-success (PFS) contracts or Social Impact Bonds (SIBs) represent one of a number of financial tools in the rapidly evolving social sector and can be characterized as multiple stakeholder agreements that catalyze impact-seeking or return-seeking investment capital for publicly aligned, outcome-driven activities. Pay-for-success contracts emerged in the late 2000s, creating new investment strategies between a) large-scale government programs that face the challenges of constrained capital budgets, suboptimal service delivery, and organizational inertia, and b) non-profits and other types of organizations that have proven track records for delivering social outcomes, yet find it difficult to secure investment capital to scale their impact. Since the first deployment of PFS in the UK in 2010, there have been over 50 contracts established internationally and the results from the earliest are now becoming available. However, the majority of these contracts focused on public health, recidivism, and education. The objective of the research for the presentation is to identify innovative PFS investment strategies with a specific focus on road safety. The presentation is primarily targeted at ministers, transportation engineers, road safety professionals, CAOs, and other finance professionals at provincial transportation ministries in Canada and state DOTs in the US. The presentation team will be composed of both individuals from Fireseeds North Infrastructure (a civil engineering consultancy based in Winnipeg that specializes in road safety and asset management) and Purpose Capital (an investment advisory firm based in Toronto that specializes in impact investing). Together, the two firms will review case studies of all PFS contracts and SIBs through Canada, the US, the UK, and Australia since the first example in 2010. The team will then perform a feasibility analysis of PFS-based investment strategies to be pursued by public transportation agencies that focus on the reduction of fatal and injury collisions. The outcome of the feasibility analysis will be a shortlist of recommended PFS-based investment strategies that may be piloted by Canadian provincial transportation ministries.

Mark Hearson