Investor Orientation and Commitment in Outcomes‐Based Public Service Contracts

Outcomes‐based contracts (OBCs) organize public service delivery around measurable results, yet little is known about how different investors engage with these instruments. This article examines how investor orientation (social, financial, or dual‐purpose) shapes investor commitment in OBCs worldwide. Drawing on a global dataset of 338 contracts, we combine descriptive analyses, regression models, and qualitative interviews to investigate how investor orientation relates to investment scale. We hypothesize that OBCs involving socially oriented investors are associated with higher levels of investment than those involving financially or dual‐purpose investors. Consistent with this prediction, socially oriented investors consistently commit larger amounts, whereas financially oriented and dual‐purpose investors typically participate with smaller contributions. These patterns challenge a central premise of OBCs: that such instruments would mobilize significant mainstream private capital for public services. Interview evidence points to reputational risks, limited familiarity with local conditions, and outcome measurement complexity as key deterrents.