Social impact bonds and recidivism: a new solution to an old problem?

Recidivism is not a topic that has traditionally been associated with the world of high finance. Yet, in recent times, recidivism and other intractable social challenges have become the subject of Social Impact Bonds (SIBs); a novel form of investment that makes use of private funds to address pressing public concerns. In July 2016 the NSW Government entered into its third SIB and Australia’s first recidivism SIB, known as On TRACC (Transition, Reintegration and Community Correction). On TRACC funds intensive support services to parolees, particularly in the first four months after their release, in order to facilitate their successful reintegration into the community. This paper provides an overview of SIBs. It defines recidivism, and considers the extent and costs of recidivism in NSW. The effectiveness of overseas SIBs designed to reduce recidivism is examined. The paper concludes by discussing NSW’s nascent experience with SIBs, including its new On TRACC recidivism SIB