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During 2021, as the Government Outcomes Lab celebrated our first five years, we increasingly found ourselves witness to a critical debate of the day: should public and private interests be kept separate, or can they align?

Popular culture likes to tell us how simple the world used to be. There was just one type of Cornflakes in the supermarket, and everyone watched the same Friday night talk show. In this version of the world, businesses made money, governments looked out for the public interest, and charities filled in the gaps. Whether this halcyon world ever existed is of course debatable, but most people seem to agree that it is not the world we live in today – and not just because we are spoilt for choice when it comes to breakfast cereal and evening light entertainment. The once reliable boundaries between the private sector, government and civil society seem to be slowly dissolving.

But even if we agree this is happening, there is no consensus on whether it should be welcomed. The Social Outcomes Conference 2021 gave us a flavour of the debate. Opening the conference, Nobel laureate Joseph Stiglitz sounded a warning bell about allowing private interests to encroach on public spaces. Using the example of microfinance, he lamented how its original goal of financial empowerment for poor and marginalised communities (usually women) was undermined when the model was co-opted for commercial gain. Stiglitz’s cautious tone was mirrored in the conference’s closing debate. The Blavatnik School of Government’s Professor Karthik Ramanna agreed with author and multiple blue-chip corporate board member Dambisa Moyo that it was not for companies to step in to compensate for the state’s failings, not least because they are accountable to shareholders, not citizens.

On the other hand, a growing movement of thinkers suggest that the blending or ‘hybridisation’ across sectors is to be welcomed. Economist Mariana Mazzucato (Professor in the Economics of Innovation and Public Value at University College London) is well known for her concept of the ‘entrepreneurial state’, whereby public money is used to make big bets on goals so ambitious that the private sector would never tolerate the up-front risk. And thinkers such as Colin Mayer (Professor of Management Studies, Saïd Business School, University of Oxford) suggest that corporations are rediscovering their purpose: to profit from meeting society’s needs and wants, not to profit at any cost. COP26 provided the perfect illustration that these views are more than idealism. Renewable energy in Europe would be decades behind its current trajectory if it weren’t for government investment. Yet many citizens say their governments are still not doing enough to tackle climate change, and so expect the companies they buy from to step into the gap.

The debate in public procurement – a phenomenally overlooked segment of the economy, accounting for 12% of GDP in the OECD – mirrors this broader debate. Habitually, government purchasers have prioritised the supplier who can meet a clearly defined set of requirements for the lowest price. And yet increasingly, many governments, such as the UK’s, have started asking more of their suppliers, to help drive towards a broader set of objectives in the name of ‘social value’. Classical economics would suggest this is inefficient, and yet the sheer economic force of public procurement makes it a tempting lever for governments to pull in pursuit of political commitments like ‘levelling up’ in Britain and ‘building back better’ in the US. Early extracts from the GO Lab’s Global Systematic Review suggests the practice may already be more common than we might think.

Nested within these big-picture debates is a service delivery tool that is niche but familiar to many of our audiences: impact bonds. In international development, some are asking what new private investment can offer above and beyond financial instruments that are already well-established. In the UK, where SIBs were born, the debate has moved on from whether to allow private investment in public service delivery (a practice that predates SIBs and will survive them). Discussion now focuses on whether the private player can help to seed much sought-after, but seldom-found, collaboration around complex needs. At the GO Lab, we are leading two big pieces of work to inform these discussions and the broader debates they sit within: a high-quality evaluation of the UK government’s Life Chances Fund, and an international network of data stewards co-funded by the Children’s Investment Fund Foundation (CIFF).

Should we be strengthening the guardrails that prevent private power undermining the public interest, or should we be openly inviting private interests to help society tackle some of its most intransigent problems? Our five-year report published earlier this year describes how we have hosted and participated in these discussions and many others, how we have helped to bring new evidence to bear, and what we have learnt along the way. We look forward to picking up the threads with you all in 2022.

The Call for Papers and Presentations for the Social Outcomes Conference 2022 will be published in January.