You correctly imply something worth restating clearly: despite their initial framing, impact markets are not a way to achieve public goods per se, they are a way to efficiently achieve funder goals in contexts where the path to that goal is uncertain, there are many plausible options, and there is lots of information that can be potentially priced into the market about those options.
With some impact market designs decentralized self interest can in fact come into play, perhaps in the form of bounty pools pledged into escrow by some subset of the people who would benefit from the existence of the public good they are offering the bounty for. In this case funders have a vested interest in what is achieved, and will evaluate based on such. Maybe in the long run markets that enable such a design will gain reputability relative to markets solely funded and assessed by fly-by philanthropists.
I agree with you that disinterested funders often end up having counterproductive goals, although not in all domains. The above example of generic pharmaceutical repurposing trials might be such, where the market can bear useful information about which of many interventions would have the highest impact and chance of success, but the work to achieve that goal is kind of hard to do serious harm with, given that the risk profiles of those drugs is already well quantified. In such cases I see especially little risk to encouraging philanthropy.
If some funder intentionally wishes to achieve nefarious goals with impact markets, I admit the existence of impact market infrastructure might facilitate that. But we have legal and social tools to counteract bad ends and I don’t think that impact markets are so powerful as to enable an end run around these.
You correctly imply something worth restating clearly: despite their initial framing, impact markets are not a way to achieve public goods per se, they are a way to efficiently achieve funder goals in contexts where the path to that goal is uncertain, there are many plausible options, and there is lots of information that can be potentially priced into the market about those options.
With some impact market designs decentralized self interest can in fact come into play, perhaps in the form of bounty pools pledged into escrow by some subset of the people who would benefit from the existence of the public good they are offering the bounty for. In this case funders have a vested interest in what is achieved, and will evaluate based on such. Maybe in the long run markets that enable such a design will gain reputability relative to markets solely funded and assessed by fly-by philanthropists.
I agree with you that disinterested funders often end up having counterproductive goals, although not in all domains. The above example of generic pharmaceutical repurposing trials might be such, where the market can bear useful information about which of many interventions would have the highest impact and chance of success, but the work to achieve that goal is kind of hard to do serious harm with, given that the risk profiles of those drugs is already well quantified. In such cases I see especially little risk to encouraging philanthropy.
If some funder intentionally wishes to achieve nefarious goals with impact markets, I admit the existence of impact market infrastructure might facilitate that. But we have legal and social tools to counteract bad ends and I don’t think that impact markets are so powerful as to enable an end run around these.