Instructions
The assignment is based on Oxfam’s annual accounts and report for 2018. (I attached it)
The overall maximal length of your answers is 3,000 words (excluding the list of references).
The main text for the assignment is in the set of accounts, but you will also need to identify and use other sources.
As you develop your answers, consider that better answers make effective use of materials from the module reading material and lectures and other literature that you identify as relevant during your research work on the assignment.
Questions
You are heading a team of securities developers in a large investment bank. Your team has been given the task of developing a social impact bond for Oxfam. As a first step, you need to write a report that will introduce to the trustees of Oxfam the bond. The report should include the following sections, which discuss:
the ‘theory of change’ you identify for Oxfam (note that the organisation has a few goals. So select the goal or goals the social impact bond will help promoting);
the indicators used to measure the inputs, activities and outcomes that are related to the goals you selected (pay attention also to ‘deadweight’ issues and negative impacts);
how to quantify the impact of the organisation, based on the indicators selected and how to monetise the impact;
potential risks and weaknesses associated with the bond, the securitisation process and its trading.
You should write the report in clear, managerial language, but include references to sources using academic conventions (references in the text and a bibliographic list at the end of the assignment).
+ «Theory of change» part should explicitly describe inputs/activities/outputs of the social impact bond. I attach a few lecture notes on the process of designing Social impact bond
(60 marks)
Linda, the Chief Risk Officer in the investment bank where you work as the head of a securities development team has approached you about your input regarding where it would be better to offer the bond. Linda asked, ‘would it be better for it to be traded in a face-to-face exchange where there are market makers, or is it better to offer it in an automated exchange, where the market makers have very little power to intervene and trading algorithms are quite dominant? Remember that this is a product that has a lot of social implications and so we need to take the social structure of the market into account, as well as the potential involvement by the government. I remember that you told me once that you had studied about this in university. Can you send me a report with your views?’ Write the report for Linda and discuss the issues relevant to face-to-face vs. automated trading, as these would affect the newly presented social impact bond.
Here too, you should write the report in clear, managerial language, but include references to sources using academic conventions (reference in the text and a bibliographic list at the end of the assignment
(20 marks)
A few weeks before the launch of the social impact bond you went to a lecture about the economics of social impact bonds. The lecturer argued that the buyers of such products are motivated more by a motivation to improve social conditions in the area related to the bond and less by the will to make a high return on their investment. Because of this, the lecturer concluded, prices of social bonds are not correlated with their financial performance, but with the ideological beliefs of the investors, which makes social bonds to be, at least initially, over-priced. On your way back home from the lecture, you began to wonder if the concept of performativity may have some relevance to the phenomenon the lecturer described. Discuss this and explain the potential connections you identified between performativity and the different motivations investors may have in relation to social impact-based products.
+ I attached lecture notes on performativity.
(20 marks)