Leveraging Social Value: Multiple Valuation Logics in the Field of Social Finance
Lead Research Organisation:
London School of Economics and Political Science
Department Name: Accounting
Abstract
The proposal builds on research conducted during my PhD. My interests lie in investigating how financial actors, instruments, and models advance into the field of social policy. The empirical focus is social impact investment, a form of investing in social programmes with the intent of pursuing social (and environmental) impact alongside financial return and yielding innovative financial instruments such as social impact bonds (SIBs), social stocks, or community bonds. I argue that instead of this being a case of simply applying existing financial technologies upon non-financial areas, it generates its own set of dynamics.
The research focuses on these dynamics from the perspective of the valuation processes underpinning them: i.e., how social value is conceived, created, and accounted for. It looks at how finance, as it engulfs this field, creates a hybridised form of value: blended (socio-financial) value. The implication is that this hybridisation comes to create space of shielding where social value creation is safeguarded and measured through specific metric tools but also specific social practices. The result is an explosion in social value metrics and measurement frameworks which come not to replace, but to support financialisation. Through the pursuit of blended value creation, capital accumulation can indeed advance in non-financial domains, but only whilst being concomitant and in an intimate relation with particular types and degrees of social value creation (e.g. reduction in prisoner re-offending, increased employment, improved educational attainment, improved health outcomes, reduction in homelessness, etc.). Social entrepreneurs operating within impact investment programmes can thus pursue the augmentation of social value to various degrees: sometimes they are completely unimpeded by financial actors, at times they need to negotiate with the latter, whilst other times they might find themselves following strictly the instructions of the project funders.
The twin contributions that result from this insight are a theoretical one about some of the mechanisms underlying the process of financialisation, and an empirical one about the creation and establishment, through engaging in valuation work, of blended value as a foundation for a financialised social policy sector: social impact investment. It thus contributes to and expands the literature on the financialisation of the social policy sector and advances an original framework for looking at accounting practices as channels of financial investment but also as opportunities for non-financial practices to create shielding mechanisms for protecting and fostering non-financial forms of value.
The research focuses on these dynamics from the perspective of the valuation processes underpinning them: i.e., how social value is conceived, created, and accounted for. It looks at how finance, as it engulfs this field, creates a hybridised form of value: blended (socio-financial) value. The implication is that this hybridisation comes to create space of shielding where social value creation is safeguarded and measured through specific metric tools but also specific social practices. The result is an explosion in social value metrics and measurement frameworks which come not to replace, but to support financialisation. Through the pursuit of blended value creation, capital accumulation can indeed advance in non-financial domains, but only whilst being concomitant and in an intimate relation with particular types and degrees of social value creation (e.g. reduction in prisoner re-offending, increased employment, improved educational attainment, improved health outcomes, reduction in homelessness, etc.). Social entrepreneurs operating within impact investment programmes can thus pursue the augmentation of social value to various degrees: sometimes they are completely unimpeded by financial actors, at times they need to negotiate with the latter, whilst other times they might find themselves following strictly the instructions of the project funders.
The twin contributions that result from this insight are a theoretical one about some of the mechanisms underlying the process of financialisation, and an empirical one about the creation and establishment, through engaging in valuation work, of blended value as a foundation for a financialised social policy sector: social impact investment. It thus contributes to and expands the literature on the financialisation of the social policy sector and advances an original framework for looking at accounting practices as channels of financial investment but also as opportunities for non-financial practices to create shielding mechanisms for protecting and fostering non-financial forms of value.
Organisations
- London School of Economics and Political Science (Lead Research Organisation)
- Global Climate Forum (Collaboration)
- ETH Zurich (Collaboration)
- Hebrew University of Jerusalem (Collaboration)
- University of York (Collaboration)
- Victoria University of Wellington (Collaboration)
- University of Bath (Fellow)
People |
ORCID iD |
Andrei Guter-Sandu (Principal Investigator / Fellow) |
Publications
Guter-Sandu A
(2021)
The Eurozone's Evolving Fiscal Ecosystem: Mitigating Fiscal Discipline by Governing Through Off-Balance-Sheet Fiscal Agencies
in New Political Economy
Guter-Sandu A
(2021)
The Governance of Social Risks: Nurturing Social Solidarity through Social Impact Bonds?
in New Political Economy
Guter-Sandu A
(2022)
Accounting infrastructures and the negotiation of social and economic returns under financialization: The case of impact investing
in Competition & Change
Description | Please note that this project is still ongoing and it is still too soon to tell what the key findings are/will be. More detailed reporting will be made available as the project progresses further. On a preliminary level though, the project identifies a few mechanisms regarding how social impact investing programmes operate, and which are currently developed as part of a published paper, two papers under review, and another working paper that will be submitted to academic journals. The first paper provides a more nuanced understanding of Social Impact Bonds than the current literature, highlighting both opportunities and risks in terms of their impact on conventional social policy and the welfare state. The second paper tentatively finds that impact investing accounting instruments are more malleable than financial accounting instruments and rely more on stakeholder input, suggesting that these could potentially be more participatory and foster a higher degree of democratic involvement on the part of the target population of the programmes. The third paper identifies an increasing use of off-balance-sheet vehicles for pursuing public policy objectives. The fourth is at earlier stages, but looks at how governments increasingly rely on blended finance for producing environmental impact. |
Exploitation Route | The preliminary findings which are developed in academic publications will be disseminated at various academic research seminars, conferences, and international workshops (e.g. Interdisciplinary Market Studies Workshop), and could lead to further collaboration including with non-academic entities (public policy research centres, policy-makers, social impact investing organisations etc.). |
Sectors | Communities and Social Services/Policy Financial Services and Management Consultancy Government Democracy and Justice |
Description | The findings for some of the papers I've been working on during this award have started contributing to public debates about pursuing social and public policy objectives through the integration of actors from private finance and hybrid governance arrangements. For instance, a spin-off essay based on the insights from a paper won an award at the Hertie Essay Competition and was published in a business weekly with a circulation of >150,000 (Wirtschaftswoche), thus contributing to the public debate on capitalism and democracy. The same findings were integrated in the Memorandum sent to the EU by the EuroMemo Group which outlines policy proposals based on cutting-edge political-economic research, and is now part of high-level discussion in the EU on policies to combat the climate crisis. |
First Year Of Impact | 2021 |
Sector | Government, Democracy and Justice |
Impact Types | Societal Policy & public services |
Description | Global Climate Forum |
Organisation | Global Climate Forum |
Country | Germany |
Sector | Charity/Non Profit |
PI Contribution | Collaboration on research, organisation of events, developing papers, developing further research grants. |
Collaborator Contribution | Collaboration on research, organisation of events, developing papers, developing further research grants. |
Impact | Working paper entitled Monetary Architecture and the Green Transition |
Start Year | 2022 |
Description | RegGov ECN |
Organisation | ETH Zurich |
Country | Switzerland |
Sector | Academic/University |
PI Contribution | Together with colleagues, I have founded the Early Career Network (ECN) of the European Consortium for Political Research (ECPR) Standing Group on Regulatory Governance (RegGov), with the aim to serve as an international platform for early career researchers (ECRs) specialising in regulatory governance to engage in career-related conversations such as publishing and developing personal profiles in the field of regulatory governance; networking, collaborating, and co-authoring with senior academics; navigating the increasingly competitive job market (in academia), and engaging in conversations about complementary and alternative job markets; managing pressures associated with academic work, including those impacting on academic staff wellbeing; promoting positive social and collective action, including for issues related to equality/diversity. Furthermore, the ECN aims to contribute to the generation of new ideas through activities such as: scanning the 'research horizon' and articulating emerging research themes; revisiting orthodoxies in the field in a constructive manner; collaborating with actors outside of academia, from the private, non-governmental, and civil sector; fostering dialogue with cognate fields. As part of this initiative, I contributed to organising an online conference for early career researchers, which took place on Monday, 7th December 2020 and included 40+ participants. |
Collaborator Contribution | The partners were essential in the organisation of the conference, the networking with senior members of RegGov who were asked to participate as mentors to ECRs, and in acting as discussants of ECRs' papers. |
Impact | The RegGov ECN conference programme can be found at the following links: https://reggovecn.wordpress.com/2020/11/17/ecn-conference-programme/. The conference was not recorded. |
Start Year | 2020 |
Description | RegGov ECN |
Organisation | Hebrew University of Jerusalem |
Country | Israel |
Sector | Academic/University |
PI Contribution | Together with colleagues, I have founded the Early Career Network (ECN) of the European Consortium for Political Research (ECPR) Standing Group on Regulatory Governance (RegGov), with the aim to serve as an international platform for early career researchers (ECRs) specialising in regulatory governance to engage in career-related conversations such as publishing and developing personal profiles in the field of regulatory governance; networking, collaborating, and co-authoring with senior academics; navigating the increasingly competitive job market (in academia), and engaging in conversations about complementary and alternative job markets; managing pressures associated with academic work, including those impacting on academic staff wellbeing; promoting positive social and collective action, including for issues related to equality/diversity. Furthermore, the ECN aims to contribute to the generation of new ideas through activities such as: scanning the 'research horizon' and articulating emerging research themes; revisiting orthodoxies in the field in a constructive manner; collaborating with actors outside of academia, from the private, non-governmental, and civil sector; fostering dialogue with cognate fields. As part of this initiative, I contributed to organising an online conference for early career researchers, which took place on Monday, 7th December 2020 and included 40+ participants. |
Collaborator Contribution | The partners were essential in the organisation of the conference, the networking with senior members of RegGov who were asked to participate as mentors to ECRs, and in acting as discussants of ECRs' papers. |
Impact | The RegGov ECN conference programme can be found at the following links: https://reggovecn.wordpress.com/2020/11/17/ecn-conference-programme/. The conference was not recorded. |
Start Year | 2020 |
Description | RegGov ECN |
Organisation | University of York |
Country | United Kingdom |
Sector | Academic/University |
PI Contribution | Together with colleagues, I have founded the Early Career Network (ECN) of the European Consortium for Political Research (ECPR) Standing Group on Regulatory Governance (RegGov), with the aim to serve as an international platform for early career researchers (ECRs) specialising in regulatory governance to engage in career-related conversations such as publishing and developing personal profiles in the field of regulatory governance; networking, collaborating, and co-authoring with senior academics; navigating the increasingly competitive job market (in academia), and engaging in conversations about complementary and alternative job markets; managing pressures associated with academic work, including those impacting on academic staff wellbeing; promoting positive social and collective action, including for issues related to equality/diversity. Furthermore, the ECN aims to contribute to the generation of new ideas through activities such as: scanning the 'research horizon' and articulating emerging research themes; revisiting orthodoxies in the field in a constructive manner; collaborating with actors outside of academia, from the private, non-governmental, and civil sector; fostering dialogue with cognate fields. As part of this initiative, I contributed to organising an online conference for early career researchers, which took place on Monday, 7th December 2020 and included 40+ participants. |
Collaborator Contribution | The partners were essential in the organisation of the conference, the networking with senior members of RegGov who were asked to participate as mentors to ECRs, and in acting as discussants of ECRs' papers. |
Impact | The RegGov ECN conference programme can be found at the following links: https://reggovecn.wordpress.com/2020/11/17/ecn-conference-programme/. The conference was not recorded. |
Start Year | 2020 |
Description | RegGov ECN |
Organisation | Victoria University of Wellington |
Country | New Zealand |
Sector | Academic/University |
PI Contribution | Together with colleagues, I have founded the Early Career Network (ECN) of the European Consortium for Political Research (ECPR) Standing Group on Regulatory Governance (RegGov), with the aim to serve as an international platform for early career researchers (ECRs) specialising in regulatory governance to engage in career-related conversations such as publishing and developing personal profiles in the field of regulatory governance; networking, collaborating, and co-authoring with senior academics; navigating the increasingly competitive job market (in academia), and engaging in conversations about complementary and alternative job markets; managing pressures associated with academic work, including those impacting on academic staff wellbeing; promoting positive social and collective action, including for issues related to equality/diversity. Furthermore, the ECN aims to contribute to the generation of new ideas through activities such as: scanning the 'research horizon' and articulating emerging research themes; revisiting orthodoxies in the field in a constructive manner; collaborating with actors outside of academia, from the private, non-governmental, and civil sector; fostering dialogue with cognate fields. As part of this initiative, I contributed to organising an online conference for early career researchers, which took place on Monday, 7th December 2020 and included 40+ participants. |
Collaborator Contribution | The partners were essential in the organisation of the conference, the networking with senior members of RegGov who were asked to participate as mentors to ECRs, and in acting as discussants of ECRs' papers. |
Impact | The RegGov ECN conference programme can be found at the following links: https://reggovecn.wordpress.com/2020/11/17/ecn-conference-programme/. The conference was not recorded. |
Start Year | 2020 |
Description | Accounting, Organisations, and Society at the LSE |
Form Of Engagement Activity | Participation in an activity, workshop or similar |
Part Of Official Scheme? | No |
Geographic Reach | Local |
Primary Audience | Other audiences |
Results and Impact | Presented a working paper based on the project at a London School of Economics workshop attended by academics and PhD students. |
Year(s) Of Engagement Activity | 2020 |
Description | IASS guest post |
Form Of Engagement Activity | Engagement focused website, blog or social media channel |
Part Of Official Scheme? | No |
Geographic Reach | International |
Primary Audience | Other audiences |
Results and Impact | Wrote a guest post (short article) together with a colleague for the Institute for Advanced Sustainability Studies, a research institution based in Germany and dealing with sustainability-linked issues. The institution has a high profile in Germany and is implicated in debates about the green transition and sustainability, and as such has a significant degree of public visibility. |
Year(s) Of Engagement Activity | 2020 |
URL | https://www.iass-potsdam.de/en/blog/2020/10/financing-green-transition-through-balance-sheet-fiscal-... |
Description | LSE Blog |
Form Of Engagement Activity | Engagement focused website, blog or social media channel |
Part Of Official Scheme? | No |
Geographic Reach | International |
Primary Audience | Public/other audiences |
Results and Impact | PI was co-author of this blog post meant to assess the growth of off-balance-sheet fiscal agencies in the European Union and argue that they can be used as channels for democratising the EU and its way of pursuing public policy objectives. |
Year(s) Of Engagement Activity | 2020 |
URL | https://blogs.lse.ac.uk/europpblog/2020/11/24/putting-off-balance-sheet-fiscal-agencies-under-the-co... |
Description | LSE blog |
Form Of Engagement Activity | Engagement focused website, blog or social media channel |
Part Of Official Scheme? | No |
Geographic Reach | International |
Primary Audience | Public/other audiences |
Results and Impact | PI was co-author of a blog post analysing the increased demand for good and timely data in the wake of the COVID-19. It outlines particular risks that governments face in these circumstances. |
Year(s) Of Engagement Activity | 2020 |
URL | https://blogs.lse.ac.uk/covid19/2020/05/19/governments-are-demanding-more-and-faster-data-than-ever-... |