Social Impact Investing

SOCIAL IMPACT INVESTMENT: BUILDING THE EVIDENCE BASE
Figure 5.6: Social protection, health, housing and education account for over 60% of total public spending
Structure of general government expenditures by function (2011)
Note: ‘General public services’ includes general services, and spending on defence, economic affairs, environmental protection, and
recreation, culture and religion. Canada is missing due to incomplete expenditure data. OECD average is for 30 countries (Chile,
Mexico and New Zealand also missing).
Source: Government at a Glance, 2013e analysis of OECD National Accounts Statistics (database). Data for Australia are based on
Government Finance Statistics provided by the Australian Bureau of Statistics.
5.32 An idea of the ‘openness’ of public services by sector to third party interventions can be gleaned
from available estimates of the extent to which the public sector is co-producing 20 in these sectors. An
OECD survey of 26 countries in 2011 (OECD 2011b – Brazil, Egypt, Russia and the Ukraine plus
22 OECD countries) mapped ‘significant’ civil society involvement in the delivery of public series and
showed that of 58 examples of co-production, 19% were in social protection, 16% were in housing and
community amenities, and 10% were in each of the areas of environmental affairs, economic services,
education and health. In each sector, co-production in service delivery was found at all levels of
governance (local, state and federal or national levels - ibid: 23).
5.2.2.2 Trends in social protection spending in cash and in-kind
5.33 The following section explores the evolving market space for SII by breaking down available
government expenditure trends in total social protection, housing and health spending in terms of service
provision and cash spending. The purpose here is to get a better idea of changing demand for social
services, as it is in this area that SII might be possible for entrepreneurs from small, medium and large
enterprises alike. 21
5.34 Figure 5.7 maps the trends in cash spending and service expenditures in each of the G7 countries
and Australia between 1996 and 2011. Across all OECD countries, on average, cash spending was falling
20 . The OECD report defines co-producing as “a way of planning, designing, delivering and evaluating public
services which draw on direct input from citizens, service users and civil society organisations” (OECD,
2011b). This definition differentiates between voluntary involvement citizens and services users and civil
society organisations (including via contractual and semi-contractual obligations) and formal contracting or
outsourcing, services to the private sector (which are not included here).
21 . Although there may be a role for SII in the provision of cash transfers (pensions, social insurance
[maternity pay or hospital costs for childbirth] or micro-credit) these are high-risk large-scale areas more
suitable for larger social enterprises.
68 © OECD 2015