The Impact of Community Currencies : A Systematic Review E-Book

Arnaud Michel

• Herausgeber: Renaissance du livre
• Kategorie: Fachliteratur
• Sprache: Französisch
• Veröffentlichungsjahr: 2015

Seitenzahl: 84

Beschreibung

Mémoire présenté en vue de l’obtention du Master en Ingénieur de Gestion, à finalité Advanced Management

Das E-Book The Impact of Community Currencies : A Systematic Review wird angeboten von Renaissance du livre und wurde mit folgenden Begriffen kategorisiert:

Leseprobe

Acknowledgments

I would like to express my gratitude to ProfessorMarekHudon, my research supervisor, for his aspiring guidance and his constructive suggestions during the development of this Master thesis.

I wouldalsolike to acknowledgeMr.Max Bentinckfor the re-reading ofthe English text.Finally, I would like to offermy special thanks tomy family and friends for their patience andconstant support.

Abstract

Community currency systems have been promoted as tools to foster sustainable development. However, the analysis on their actual outcomes has been mostly limited to individual studies due to the absence of global impact assessment standards.

Based on a systematic review of the pertinent literature, this paper aims to fill the gap by exploring whether community currencies contribute to the three pillars of sustainable development. The extent to which four main types of community currencies – mutual exchanges, service credits, local currencies and barter markets – achieve their stated goals has also been evaluated.

The main findings suggest that community currencies mostly contribute to social sustainability, and that their economic benefits are somewhat limited due to their small scale and a lack of awareness about their scope. Consequently, their overall impact on sustainable development seems to remain relatively marginal.

Additionally, this review reveals limitations in current methods for impact assessment in this field. Therefore it encourages more standardisation to provide greater accuracy and strengthen the legitimacy of community currencies in order to foster their continued development.

Introduction

Over the last few decades, a growing number of green movements have turned their attentions to the challenges of globalisation and its impact on sustainable development. Moreover, concerns have been raised about the conventional monetary system notably that it is unsustainable because of the constant transfer of financial resources from poor to rich segments of the population, and the obsession for economic growth as the overriding economic philosophy. All of this amplifies economic disparities and sends local economies into decline (Robertson, 1999; Strange &Bayley, 2008).

In response, the movement of new economics argues that sustainable development needs a revision of priorities away from the principal objective of economic growth and towards thewell-beingof society and the environment (Jackson, 2009). All three pillars of sustainability need to be addressed and given the same importance.

In parallel with this approach, and inspired by green movements, community currencies have been developed worldwide by non-governmental organisations (NGOs) and non-profit organisations (NPOs). As a matter of fact, although they were historically established in response to crisis situations to protect local livelihoods, community currencies are now emerging more and more deliberately as grassroots innovations aimed at promoting sustainable development (Colacelli& Blackburn, 2009;Douthwaite, 1996;Meechuen, 2008; Robertson, 1999). Over the last decades, the number of community currency projects has experienced dramatic growth around the world (seeLietaer, 2001). During one of their studies,Seyfang&Longhurst(2013) recorded a total of 3,418 projects across 23 countries and six continents.

Given the large number of papers studying this movement, the terminology of these new forms of exchange remains confusing and contested. Amongst others, they are alternately called local currencies, alternative currencies, parallel currencies, community currencies or complementary currencies. However, for reasons of clarity, only the term “community currency (CC)” will be used in this paper.

Typically, CC designates the broad family of currency systems that exist alongside conventional currencies, circulate within a defined geographic region or community, and are used in exchanges of goods and services without bearing interest. Some of the most famous examples of CCs are Time Banks, IthacaHours, Local Exchange Trading Systems (LETS)1,WIR and the Red deTrueque. They vary impressively in design: some are physical paper-based currencies while others are simply debit and credit lines recorded in registers or electronic databases (Evans, 2009). They also differ in scale and objectives. (A typology will be presented in a later section of this paper.)

However, despite this diversity CCs have some common characteristics. Grounded by the rejection of the capitalist debt-based system, they do not seek to replace conventional money but rather to act as a complement and execute functions that conventional money does not fulfil in order to revitalise local communities (Lietaer, 2001;Stodder, 1998). Firstly, they attenuate the gap between favoured and less-favoured regions by building new local circuits of exchange and offer additional liquidity to localities when the traditional money is in short supply by connecting unmet needs with under-utilised resources (Lietaer& Kennedy, 2008;Nishibe, 2001). Secondly, they stem for more social inclusion. By rewarding informal work and valuing skills otherwise not valued by the traditional labour market, CCs provide a more equitable community that allows the participation of all regardless of the incomes in conventional money. As a result, CC’s also aim to resolve unemployment (Nishibe, 2001;Seyfang& Pearson, 2000), and to enhance relations of confidence and cooperation, not just simple interactions based on monetary exchange by setting up reciprocal exchange based on trust. Finally, they favour ecological attitudes and promote consumption respectful of the environment (Buron& Franck, 2013).

The CC field is currently on its way to developing as a solid discipline, discussed in an increasing number of studies (Place, 2013). However, while the majority of the existing papers have extensively researched and highlighted the diversity, motivations and potentials of CCs, few have so far evaluated their concrete impact. Moreover, publications assessing outcomes of these systems are generally individual studies of one particular CC project (e.g., Jacob et al., 2004;Pacione, 1997) or national studies evaluating similar exchange systems (e.g., Birch &Liesch, 1997;Seyfang, 2002). To date, it would seem that no study has comprehensively assessed the global impact of CCs.

Still, impact evaluation and proof of positive outcomes is needed for different reasons. First, asDeMeulenaere(2008) discovered in his study, CCs rely mostly on external financing, so convincing governments and financial institutions could help to win more support. Second, while CCs are generally small-scale systems,McBurnie(2012) found a positive correlation between the awareness of community and environmental benefits and the willingness of non-members to start using the currency. As a result, more people and businesses might join CC systems if evidence of positive impacts is correctly demonstrated.

For these reasons, this research attempts to draw a global picture of the actual impact of CCs and assess how successfully they achieve sustainable development. With this aim, a systematic review of the most comprehensive and available literature has been conducted. Moreover, despite their diversity, the CCs analysed were categorised into four main types according to their objectives, and the extent to which these objectives correlated with the actual outcomes for each type was also evaluated.

The remaining part of the paper proceeds as follows: the next section describes the theoretical context for the review, introducing the new economics approach, describing the link between the three pillars of sustainable development and community currencies, and presenting the typology used for the analysis. Following this, the particular methodology of this research is explained. Next I present the findings, including the characteristics of the studies analysed and impacts observed. A discussion of these findings is then provided. Finally, I conclude with some implications for the future.

Theoretical framework

Origins of community currencies

In the last few decades, the phenomenon of globalisation has radically changed our world. Improvements in the areas of transport and communication have widened the range of goods and services exchanged in national markets, boosted international trade and increased opportunities for commercial expansion. However, these possibilities are not equally available to all and somehow threaten the sustainable development of local regions (Strange &Bayley, 2008).

According to Robertson (1999) the current monetary system challenges sustainable development for two main reasons. First, resources are systematically relocated from poor to wealthy segments of the population. Kennedy (2001) referred to this as the “fairness misconception”, stipulating that, in fact, not everyone is treated equally in our monetary system. In his study comparing the interest paid and received by German households, he found that the mechanism of interest benefited only a small minority of rich people, while the majority (80%) paid almost twice as much as they receive. Second, Robertson (1999) denounces constantly higher levels of production, consumption and investment resulting from the money-must-grow imperative. What happens nowadays is that most governments and businesses are primarily concerned with growth and economic activity, at the expense of environmental and social issues. Moreover, as institutions become increasingly globalised to facilitate global trade, localities and communities experience a loss of autonomy over their economic and political destinies.

The new economics approach contrasts with the conventional economic approach by acknowledging economic growth as a misleading policy objective for sustainable development that systematically harms society and the environment (Robertson, 1999). The basic vision of sustainable development stipulates that our decisions should bear in mind the interconnection of the economic, social and environmental spheres. Actions in one sphere constantly impact the other two, and considering only one dimension at a time leads to unsustainable outcomes for the future (Strange &Bayley, 2008). As a result, the focus on growth has dramatic consequences on the environment and society; it also leads to higher pollution, the degradation of landscapes, the depletion of natural resources, unemployment, anupward transfer of wealth, the destruction of communities, and social inequalities (Giddings et al., 2002; Strange &Bayley, 2008).

Therefore, the new economics movement stresses the need for a new vision of economic development that moves away from the primary goal of economic growth, and is more oriented towards people and the well being of our planet (Jackson, 2009). Key principles include the systematic empowerment of people, the planned conservation of resources and the environment, the shift towards an ecologically sustainable multi-level economic system that also takes into account qualitative values, as opposed to an economic system that is based solely on quantitative values (Robertson, 1999).