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Have any research studies been published looking into localised alternative currencies, as to what their effects on the local market have been? For instance, do they really drive down food-miles, and increase trade at independent retailers at the expense of national and multi-nationals?

Some examples I know of:

  • The Wörgl scrip, 1932-3, Austria, an attempt to take the idea of company scrip (wages that can only be spent in the employer's own shop) and apply it to a whole community.
  • Swiss WIR, 1930s-present, electronic settlement and accounting unit, cannot be used for full transaction payment. This currency is national and business-to-business only, so is not really of interest to me for this question.
  • Thousands of Local Exchange Trading Systems (LETS) worldwide, probably the best known being Ithaca Hours, of New York state. Usually time-based e.g. one unit of currency represents one hour of work. Many systems have printed notes with anti-counterfeiting features.
  • BerkShares, 2006-present, paper-based, no electronic settlement facility
  • Various "Pound" currencies in the UK, 2006-present, paper-based with optional electronic point-of-payment facility
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    This isn't an answer to the question, but it is important to note that minimizing food miles isn't always the best sustainability choice, when picking your foods. Source. It would be, of course, if all else was held equal, but all else normally isn't. – Nate Jul 5 '13 at 21:51
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    I'm not sure why you think the fact that the WIR is national and B2B means that it is not really of interest to sustainable living: businesses would seem to be a pretty inevitable part of sustainability, except for those deepest greens who look forward to a return to neanderthal cave life. – EnergyNumbers Jul 9 '13 at 23:29
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    @user655 I think your answer (that you've deleted yourself) was okay. EnergyNumbers merely offered some advice to make it more valuable (in case the links go dead). – THelper Jul 10 '13 at 11:45
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    @CharlieBrown Carl likely pays for his oil to be shipped from arabia anyway - some leakage is inevitable, but if Carl bought it from Fred the Fracker's backyard well, then we'd be making progress! – Nicholas Shanks Jul 18 '13 at 15:26
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    @Nicholas I'm afraid Carl gets his fuel from Chevron or some other huge operation. However, tax $s stay in the community rather than who knows where. That was 1 surprising thing I learned. It rewards people to use local over multinational corporations so they have incentive to buy their latte at the 'coffee hut' rather than Starbucks, etc.! (this may very well have similar tax advantages as well). – Charlie Brown Jul 18 '13 at 15:34
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I made a literature search and just present here all the significant results I could find with small excerpts from the abstracts:

Growing green money? Mapping community currencies for sustainable development Link - 2013

Parallel sustainable monetary systems are being developed [..] to promote sustainable development by localising economic development, building social capital and substituting for material consumption, valuing work which is marginalised in conventional labour markets, and challenging the growth-based monetary system. [..] This paper [..] identifies the diversity, scale, geography and development trajectory of these initiatives, discusses the implications of these findings for efforts to achieve sustainable development, and identifies future research needs, to help harness the sustainability potential of these initiatives.

Means there are local currencies designed to enable sustainable living but if they really reach this goal? One would at least need to read the paper.

Working for the Fenland Dollar: An Evaluation of Local Exchange Trading Schemes as an Informal Employment Strategy to Tackle Social Exclusion Link - 2001

[..] Local Exchange Trading Scheme (LETS) [..] have been growing throughout the UK in recent years. [..] LETS was found to be successful at delivering new informal employment opportunities to socially excluded groups, boosting their income, and providing a forum for social interaction and community-building. However, there is scope for much greater participation. [..]

Means that informal employment and income (of socially excluded groups) can be boosted. However there are also problems of scale and adverse state policies.

Defending Communities: Local Exchange Trading Systems From an Environmental Perspective Link - 1999

[..] I consider the environmental credentials of local exchange trading systems (LETS) and assess their potential to build an alternative economic model at the local level. I conclude by discussing some of the obstacles which face LETS development and consider how they may be addressed.

Reading a bit in the article I gather that users of local currencies often are convinced that they fight globalisation and enhance sustainability. But if this is true...

Selective Spatial Closure and Local Economic Development: What Do We Learn from the Argentine Local Currency Systems? Link - 2008

[..]local currency systems as an instrument of selective spatial closure to mitigate impacts of externally induced changes and to promote endogenous local economic development. [..] local currency systems provided relatively protected economic spaces, thus enabling poor households—and especially women—to launch micro-enterprises and diversify income sources. They also supported existing enterprises by offering an emergency market outlet and, when combined with other measures, by building local trading and production networks. [..]

This seems to strongly support a possible link between local currency systems and local economies (especially offering chances for poor households) by a wall-like effect of local currencies.

The Moral Economy of Parallel Currencies Link - 2006

[..]I show (1) how strongly oriented LETS are to the formal market economy, from which, it is held, they detach themselves, and (2) that they do not effect a return to barter or an abolition of money, as is sometimes claimed. [..] LETS' members are motivated less by pecuniary gain than by the desire to build community and realize certain values. Participants have little motivation to expand LETS, which are therefore destined to remain small and ineffectual in offering an alternative to the unemployed and less well-off. Indeed, were LETS to grow in size, the moral commitment required of members would come into conflict with the growing financial interests at stake.

In other words: people who use LETS have certain values (which might for example include sustainability) but the more people use the same LETS the more difficult it is to keep the vision clear.

Community currency in the United States: the social environments in which it emerges and survives Link - 2005

[..]The major findings indicate that cities with local currencies are characterized by populations with lower household incomes, higher poverty rates, higher unemployment rates, and larger self-employment sectors. Evidence is also presented indicating that community currencies tend to survive in places with younger populations, higher educational attainment, fewer married people, and less residential stability. Implications concerning the future of the community currency movement and its ability to empower the marginalized are drawn.

Again it seems to be helpful for empowering the marginalized. Surely this takes place by adding some local not global economic activities.

Local currencies for purposive degrowth? A quality check of some proposals for changing money-as-usual Link - 2013

[..]LETS have been found to support alternative livelihoods under quite uncommon conditions, and contribute indirectly to eco-localization by moderately facilitating informal resale, repair, and sharing of commercially produced goods, although their burdensome management and confinement to small memberships limit their usefulness. Time banks help expand social networks, and are best at reaching the socially excluded. However, they are confined to unskilled personal services and dependent on grant funding. HOUR currencies do not stand out with regard to any criteria, but may have a minor capacity to promote local purchasing. CLCs are best at attracting local businesses, but no significant evidence of their said capacity to localize supply chains has surfaced as yet, and their business-friendly design works to the detriment of other criteria. In sum, existing research provides a very weak basis for advocating local currencies as tools for purposive degrowth.[..]

Is even rather about de-growth, but also only finds small effects of local currencies on anything. The author seems to prefer government-centred ecological reforms.


All in all a clear positive or negative impact of local currencies on local economic development does not seem to be sure. A certain amount of locality by improving the situation of marginalized people however seems to be included.

Sorry for not finding more explicit articles.

  • Disclaimer: I didn't read all these articles, just the abstracts. – Trilarion Jul 9 '14 at 17:40

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