The city council of Westminster incorporated social impact bonds into a new social contract with its citizens and businesses.
“The government’s economy in public spending and other social and economic changes demand a new approach from local government. We see this as being guided by a new sense of civic responsibility, fairness and opportunity. Our principle of responsibility is about recognising the value of public contributions to contribute to making it a successful place.
JP Morgan’s impact investment research team released its second report on the nascent industry.
http://www.thegiin.org/cgi-bin/iowa/resources/research/334.html
Biggest investment are in housing.
See spreadsheet below. If Table 8 in the report is reformatted and sorted by average investment type, we see that the largest investments are made in housing, the second largest in education. Average housing investment is $5 million, and the average education investment is $0.7 million. The average overall impact investment is around $2 million.
https://docs.google.com/spreadsheet/pub?hl=en_US&hl=en_US&key=0AoRYN7f_7ejDdEtUNTJhQnEzZno4UVlUUE13TkxBS1E&output=html
Interesting insights about government efforts to spur impact investment (pp. 7-8 of the report):
What do impact investors expect from their investments?
“We find that 84% of investments into non-profit companies or funds were made with concessionary return
expectations (relative to similar non-impact investments). Similarly, 93% of investments made with competitive return expectations went into for-profit companies or funds.”
What return do impact investors expect?
Return on debt investments into nonprofits was 3-4%.
Return on debt investments into for-profits was 7-8%.
The corporate form of the investee shaped investors’ perceptions more than did the investors’ goals for the investment (i.e., concessionary versus competitive expectations).
Returns on impact investments into for-profits do not exceed expectations.
Investors expected returns on the range of 2-7% into developing markets and 8% for emerging markets. They realized returns of 3-8% in developing markets and 2-6% in emerging markets. (Tables 10, 11) And this result is likely to be more stark in reality because reporting bias probably inflates reports of realized returns and suppresses reports of returns that fell short of expectations.
I think the extent to which North Korea engages in externally-oriented violence depends on the extent to which Kim Jong-un feels that he needs to prove himself to solidify his rule.
http://www.nytimes.com/2011/12/19/world/asia/kim-jong-il-is-dead.html
http://www.nytimes.com/2011/12/20/world/asia/china-moves-to-ensure-stability-in-north-korea.html
Interesting historical footnote about George Romney, Mitt Romney’s father, using computers to identify and track voters in New Hampshire in 1968.
The Census Bureau blog Random Samplings reported on an interesting trend resulting from the economic downturn. About 7 million people have moved in to live with their relatives or friends. About a million of those are young adults living in their parents’ houses. They either could not get a job to move out, or lost their job and moved back in, or just decided that the economics of paying for housing, or buying a house, do not make sense.
It’s interesting that the trend in the over-leveraged pre-recession American society has been for kids to move out of their parents’ homes as soon as they can afford to do so. In much of Europe and Asia the trend is the reverse. In South Korea, for example, the norm is to live with your parents until you get married. The same holds in Russia. There is a cultural norm there, but also an economic reality of pricey real estate. The economic crisis here rubs against a cultural norm in an interesting way. There is more household tension, sure, but also larger and more social households. I wonder if there’s a benefit in that somewhere.
http://www.nytimes.com/2011/11/20/opinion/sunday/sorry-strivers-talent-matters.html?hpw
Argument: Talent determines success to a greater extent than does hard work, at least at the top levels of intelligence.
Exhibit A is a landmark study of intellectually precocious youths directed by the Vanderbilt University researchers David Lubinski and Camilla Benbow. They and their colleagues tracked the educational and occupational accomplishments of more than 2,000 people who as part of a youth talent search scored in the top 1 percent on the SAT by the age of 13. (Scores on the SAT correlate so highly with I.Q. that the psychologist Howard Gardner described it as a “thinly disguised” intelligence test.) The remarkable finding of their study is that, compared with the participants who were “only” in the 99.1 percentile for intellectual ability at age 12, those who were in the 99.9 percentile — the profoundly gifted — were between three and five times more likely to go on to earn a doctorate, secure a patent, publish an article in a scientific journal or publish a literary work. A high level of intellectual ability gives you an enormous real-world advantage.
Obviously the first assumption is that desire to reach those academic goals – doctorates, patents, published articles – is similar among the 99 percent-ers. And the other is that everyone among these categories works equally hard. This second assumption could be wrong; it could be that students of equal intelligence reach the 99.9 percentile through an extra bit of hard work. The SAT is, after all, an imprecise test, and small movements on the margin can move the needle. So we could be observing harder work, rather than greater talent, and mistaking one for the other.
But even if that were not the case, it could still be true that harder work yields more return to success on the margin — meaning that an additional amount of studying, practicing, staying up late, etc., is more beneficial to any given individual than some magical addition of gray matter. If the 99.9 people are 5x more “successful” than the 99.1 people, then it could still be the case, if hard work yields high returns, than a 99.1 person working extra hard could offset the “success gap” — or even dwarf it entirely.
A friend was reading a draft of my case on Google.org and asked why we did cases at the Kennedy School. I realized I had no idea where cases come from, so decided to dig a little and – voila! – found this great article.
http://harvardmagazine.com/2003/09/making-the-case-html
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The Law School led the way. A newly appointed dean began to teach with cases in 1870, reversing a long history of lecture and drill. He viewed law as a science and appellate court decisions as the “specimens” from which general principles should be induced, and he assembled a representative set of court decisions to create the first legal casebook. To ensure that class time was used productively, he introduced the question-and-answer format now called the Socratic method.
The Business School followed 50 years later. Founded in 1908, it did not adopt cases until 1920, when its second dean, a Law School graduate, championed their use. After convincing a marketing professor to create the first business casebook, he then provided funding for a broader program of casewriting, built around real business issues and yet-to-be-made decisions. That program produced cases in multiple fields and their use in virtually all courses by the end of the decade.
The Medical School began using cases only in 1985. All were designed to cement students’ understanding of basic science by linking it immediately to practical problems—typically, the case histories of individual patients. These cases formed the foundation of the school’s revolutionary “New Pathway” curriculum that shifted students’ pre-clinical years away from lectures toward tutorials and active learning.”
“In New Jersey, more than a half a million customers were without power on Sunday, and the state’s largest utility, the Public Service Electric and Gas Company, estimated that it could take as long as a week to restore electricity to all its customers. Connecticut Light & Power said 267,000 customers had lost power.
“Before long, spending four years in a lecture hall with a hangover will be revealed as an antiquated debt-fueled luxury good.”
College Doesn’t Create Success – Room for Debate – NYT
Michael Belinsky 