Derivative Character Investments: Social Impact Bonds as Path-Changing Devices

Since 2010, social impact bonds (SIBs) have invited investors to ‘do well by doing good’: injecting capital into social welfare projects, and gaining returns based on successful attainment of impacts. A foregrounded interest in behavioral change typifies much of this market (with SIBs aiming to reduce recidivism, truancy, and addiction, for example). Commentators have situated these behavioral concerns within debates on nudging, ‘caring capitalism’, and the financialization of social welfare. Lesser attention has been paid to how SIB promotional materials transpose behavioral interests into narrative and representational terms. Given their role in fabricating consent for social impact investing, this article questions how promoters narrate SIBs’ construction of behavioral changes as objects of investment, both drawing from and reshaping conventions for representing character in the process. Analyzing three examples, I argue that behavior-focused SIB promotional videos depict societal improvement as ‘improved character’ at scale. By depicting beneficiaries as better able to morally direct their lives, they represent SIBs as path-changing devices, threading more fulfilling life paths through society. They encourage derivative character investments in bundles of bettered behavior, narratively linked to changed life paths at scale.

This article draws from literary studies, critical finance studies, valuation studies, visual cultures, and SIB literature to analyse how promotional images of character lend narrative coherence to SIBs’ varied interests in behavioral reform, neocommunitarian values, and human capital. The argument’s ambition – currently developing into a larger project – is to complicate the presumed separation between social investment products and the promotional images used to justify them. Since SIBs are structurally indifferent to the underlying lives they supposedly improve (given their reliance on derivative performance data), promotional images of bettered lives are arguably not secondary to SIBs, but rather their primary objects of investment. Fundamentally, SIBs enable investment in images of bettered lives: derivative investments in character.