Research

Abstract:

This prospective report introduces the pooling of commitments, as a mechanism for curating and fairly exchanging resources within communities. This approach hinges on the idea that commitments can be effectively pooled to create a more equitable and collaborative economic system, building on the efficacy of traditional mutual service practices. To operationalize this concept, the paper presents a protocol being piloted by Grassroots Economics called Commitment Pooling. The Commitment Pooling Protocol is designed to aggregate commitments (via digital systems) while facilitating the management and fair exchange of resources. The study describes the background, development, and potential impact of this approach, demonstrating how it can support autonomous, decentralized, non-monetary, and polycentric systems of Commitment Pooling. The emphasis is on fostering community well-being, aligning individual economic transactions with the ethos of mutual service and collective agency. Through practical use cases and analysis, the paper shows the versatility of this protocol in various socio-economic contexts, highlighting its potential in building more inclusive and resilient economic systems.

Abstract:

The study uses a network analysis method to examine the circulation of Sarafu, a digital community currency in Kenya, during the COVID-19 pandemic. Findings show circulation was geographically concentrated and involved diverse users. Local institutions acted as hubs, with early adopters and women being pivotal. This research provides insights for developing community currencies in underserved areas.

Abstract:

We describe a dataset of account information and transaction records for many digital community inclusion currencies aka community asset vouchers in Kenya as well as Cameroon and South Africa. One unit of each voucher is equivalent in value to a 10 Kenyan shillings of the issuers products. The Sarafu.Network system has existed since 2010 and began operating digitally via USSD feature-code cellular technology in 2017. This dataset includes pseudonymized account information for around 20,000 users and records of all voucher transactions conducted from 20/04/2022 to 04/07/2023. User transactions capture various economic and financial activities such as purchases, transfers, and participation in traditional rotational labor and savings and lending groups. So-called "chamas" are key to the operation of the Sarafu.Network system and clearly labeled in the data. This dataset will contribute to research on the operation of community inclusion currencies, monetary systems, and economic networks in underdeveloped areas.

Abstract:

Community Inclusion Currencies (CICs) have been piloted as alternative financial systems, studied and adapted into various contexts but haven’t yet been fully adopted into larger-scale institutions or state application. They have been designed as a financial instrument to support the development of circular local economies in marginalised communities, but have the potential for implementation in a wide variety of settings. This research paper sought out experts in various fields to point out potential solutions and risks to adoption and scale within potential implementation opportunity areas.

Abstract:

This paper proposes a complex dynamic system subpopulation model for the construction and validation of a novel form of local complementary currency, namely the Grassroots Economics Foundation’s Community Inclusion Currency (CIC) implemented recently in Kenya. First, we highlight that CICs can act as a local liquidity-provision institutional device in poor or isolated economic regions, thereby serving as a market-based mechanism to alleviate poverty. Second, we elicit 50 heterogeneous utility types according to observed transactions behavior in our rich data set, i.e., via revealed – and recorded – preferences, and build a corresponding model and simulation at a meso-economic level.

Abstract:

We describe a dataset of account information and detailed transaction records for a digital complementary currency in Kenya. This “Sarafu system” initially encompassed several local, physical community currencies, which began transitioning to a feature-phone mobile interface in 2017. One unit of “Sarafu” is roughly equivalent in value to a Kenyan shilling. The published data includes anonymized account information for around 55,000 users and records of all Sarafu transactions conducted from January 25, 2020 to June 15, 2021. Transactions totaling around 300 million Sarafu capture various economic and financial activities such as purchases, transfers, and participation in savings and lending groups. So-called “chamas” are key to the operation of the Sarafu system and many such groups are labeled in the data. Describing this data contributes to research on the operation of community currencies, monetary systems, and economic networks in marginalized, food insecure areas. The observation period includes the first year of the COVID-19 pandemic and several documented pilot projects and interventions.

Abstract:

The humanitarian sector has gone through a major shift toward injection of cash into vulnerable communities as its core modality. On this trajectory toward direct currency injection, something new has happened: namely the empowerment of communities to create their own local currencies, a tool known as Complementary Currency systems. This study mobilizes the concepts of endogenous regional development, import substitution and local market linkages as elaborated by Albert Hirschman and Jane Jacobs, to analyze the impact of a group of Complementary Currencies instituted by Grassroots Economics Foundation and the Red Cross in Kenya. The paper discusses humanitarian Cash and Voucher Assistance programs and compares them to a Complementary Currency system using Grassroots Economics as a case study. Transaction histories recorded on a blockchain and network visualizations show the ability of these Complementary Currencies to create diverse production capacity, dense local supply chains, and data for measuring the impact of humanitarian currency transfers. Since Complementary Currency systems prioritize both cooperation and localization, the paper argues that Complementary Currencies should become one of the tools in the Cash and Voucher Assistance toolbox.

Abstract:

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.”

Abstract:

325 Sarafu users in Kenya were sampled out of Frequent, Infrequent and non-trading registered. The survey and analysis found, among many things, that 44% of users were using Sarafu to buy household items and 41% used Sarafu specifically to access food. Strikingly the study found that 99% of users had no alternative to an alternative to Sarafu for trading with others when national currency was scarce.