Pay for Success: Diffusion of Policy Innovation for Social and Economic Stability

Across the United States, communities struggle with numerous social and environmental issues, while the funding to address these issues continues to diminish. Therefore, actors inside and outside of government are seeking new policy solutions to persistent social problems. Significant hurdles to new policies exist, however, including a lack of funding and a reluctance to take on the risks inherent in implementing new programs. A recent innovation in the policy sphere, pay-for-success (PFS) financing, has been able to overcome these hurdles. Policy innovation does not come easily, though, and change within government is often slow and methodical. What catalyzes jurisdictions to engage with PFS? By developing an understanding of the mechanisms and processes of PFS, diffusion scholars and practitioners can facilitate innovation within jurisdictions. Such innovation, which the federal government has an opportunity to facilitate, is necessary to shift business-as-usual service provision and enable greater social, environmental, and economic stability.