A growing number of states and local governments are turning to an unconventional method of financing possible fixes to big social problems, motivated by tight budgets and little incentive to take a chance on initiatives without a guarantee of results. On Tuesday, officials in Connecticut, South Carolina and Colorado announced new public/private arrangements to fund so-called "pay for success" projects that aim to help families struggling with drug addiction, improve health outcomes for poor mothers and their children and reduce chronic homelessness. The concept, often referred to as "social impact bonds," involves a government entity teaming up with a private...