Community Currencies as Crisis Response: Results From a Randomized Control Trial in Kenya

This paper presents the results of what may be the world’s first randomized control trial on community currencies, focusing on Grassroots Economics Community Inclusion Currency (CIC) model run on the xDAI blockchain. Beneficiaries in Nairobi, Kenya were sent the equivalent of $30 in cryptocurrency tokens, enabling a level of impact evaluation usually unfeasible for most cash and mobile-money based transfer programs. Results show that CIC transfers of $30 are associated with $93.51 increase in beneficiaries wallet balance, a $23.17 increase in monthly CIC income, a $16.30 increase in monthly CIC spending, a $6.31 increase in average trade size and a $28.43 increase in expenditure on food and water. However, the difference in treatment effects for males versus females suggests gender imbalances persist. This study serves as an important prototype for novel cash transfer models and presents some of the first quantitative evidence in the area of “crypto for good.”

Processes of normative regulation in spaces of “solidarity economy”: a comparative case study analysis

PurposeThis research article addresses the role of processes of normative regulation, driven by distinct approaches to collective action and underlying narratives of social change, in the construction of “solidarity economy” initiatives as parallel spatialities to that of the mainstream economy.Design/methodology/approachThis article is based on a comparative case study analysis, informed by aspects of the Grounded Theory and Extended Case Study methods, of an ecovillage, an alternative commercialization network and an “integral cooperative”. The analysis is illustrated with fieldwork data on food production, commercialization and consumption, given its centrality in the construction of human livelihoods and lifeworld.FindingsThe resulting conceptual framework identifies three methodologies of normative regulation: Prefigurative social technologies and capitalizing upon power and reputation to exert influence over other economic actors; being part of a wider class-based emancipatory political project; mobilizing online peer-to-peer platforms and community currencies to construct an alternative institutionality.Research limitations/implicationsThis article constitutes an exploratory analysis. Further research, based on the application of mixed methodologies to larger samples, will further expand the setup and applicability of these concepts.Practical implicationsThis analysis will allow scholars and practitioners alike to gain a deeper understanding of how different approaches to collective action, based on distinct structural standpoints and narratives of change, constitute alternative economic spatialities to those of the mainstream economy.Social implicationsThe comparative approach used in this article, as well as the resulting concepts, have the potential of contributing to the convergence of “solidarity economy” strategies between initiatives and movements with different approaches to collective action, therefore contributing to improve their capacity to exercise influence upon incumbent institutional regimes, as well as promote socio-economic change.Originality/valueThis article aims to bridge a significant gap in the understanding of how “solidarity economy”-based parallel spatialities emerge and coexist with the mainstream economy: It analyses how processes of normative regulation result from narratives of change with distinct approaches to collective action, based on the standpoint of actors located differently within structural power relations.

Economic Advantages of Community Currencies

Community currencies are only sometimes economically advantageous. We focus on seasonal changes in money supply and assume that community currencies stabilize the money supply in a local community. This leads to additional transactions during seasons of insufficient supply of national currency. We hypothesize community currencies are therefore economically advantageous in a surrounding of seasonally insufficient money supply. We test the hypothesis qualitatively with two case studies, the German Chiemgauer and the Kenyan Sarafu Credit. We find community currencies are only economically advantageous in an environment of insufficient liquidity.

Convertible local currency and trust: ‘It’s Not You, It’s Me’ – A field experiment in the French Basque Country

We present a field experiment investigating the mechanism by which community currencies enhance trust. Our question is the following: do I trust more when using a community currency because I am a trusting-type person or because I think that you are trustworthy? We call the former preference-based trust; while the latter is belief-based trust. We apply a modification of the standard trust game from the experimental economics literature to disentangle these mechanisms. Player A has to choose whether or not to trust player B, and player B can either reciprocate that trust or not. Our innovation is in experimentally separating the currency in which the game is played ( effective currency), from the currency preferred by the participant ( preferred currency). If the mechanism is preference-based, then preferred currency will determine trust more than effective; if it is belief-based, then the effective currency will be determinant. We find strong evidence of the preference-based mechanism of community currencies on trust, and only weak evidence of the belief-based mechanism.