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What the Government can do to promote social impact investment markets

Elements for Action

In my previous blog on the role of government I argued that the Turkish government has a stake in promoting social innovation and that there was a strong economic rationale for public policy intervention to promote social innovation and build social impact (investment) markets. Here I would like to look at different elements for an effective policy framework for social innovation, social entrepreneurship and social investment by raising a few questions:

  • Strategy: Where does the government want to go? What is the Government’s assessment of the existing situation, its opportunities and barriers for social innovation? Who are key stakeholder, what are their needs and preferences? What is the government’s vision on how a mature and developed social impact market in Turkey would look like? Based on the analysis of the existing situation, what are the necessary steps to get there? What overall role should the Government play? How does the new strategy relate to other policy fields including innovation policy, entrepreneurship policy or engagement strategies? How do the strategies of regional (e.g. regional development agencies) and local agencies (e.g. municipalities) fit into the national government strategy?
  • Institutions: Who should take the lead in government? Who would develop strategies for social innovation, build internal capacity in this new field, consolidate existing government activities across government departments and between the local, regional and national level? Who would act as interface between government, the private sector, social venures, civil society and what are institutional structures that create the necessary space for such a forum? What is the best institutional set up at the regional and local level? And who is or who are the reform champions driving the process forward within the Turkish Government?
  • Tools: What should be done? Which tools should be used and how should they be designed? Tools include for example, the creation of financing instruments and investment vehicles; the adjustment of or design of public procurement to include social and environmental criteria and open up the process for social organisation; capacity building programs; reform of legal structures, fiscal reforms or new investment rules and regulations to attract private (philanthropic) capital into this space.
  • Process: How should it be done? How should policy be developed and implemented to ensure its effectiveness and to build momentum for social innovation in Turkey? Important policy process and design principles include, for example, stakeholder engagement, transparency, predictability as well as the clarity of purpose (and I will talk more about these in the next weeks).

Figure 1: Ingredients for a framework for government action

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