Doing Well by Doing Good

BERKELEY – If you get most of your ideas about government from speeches by America’s Republican presidential candidates, it’s easy to believe that the US federal government is incapable of doing anything right. But not even the Republicans actually believe it.

The proof is just beneath the surface, where a remarkable bipartisan consensus is emerging around an approach to America’s most serious social problems – including homelessness, criminal recidivism, preschool education, and chronic illness – that combines the best principles of conservatism and progressivism. It is a strategy that is playing out in Republican states such as Utah and Kentucky and Democratic ones like Massachusetts and California.

This nationwide trend is being catalyzed in part by the federal government. But it is being implemented mainly at the community level through partnerships among local governments, community groups, philanthropic organizations, and for-profit investors.

These are, in a sense, pay-for-success projects, sometimes structured as social impact bondsformal contracts that tie payments to actual results. Private investors and philanthropic organizations finance the upfront costs of the pilot projects, and local or state governments (sometimes supplemented with federal money) pay the investors only if the project produces the promised results.