Social money: How social capital affects community currencies
Shifts in modern society have caused an increasing amount of people to be financially excluded. Community currencies could provide a solution to this problem. Community currencies provide different positive effects for locals. Some of these effects are stimulating consumption and positive network building. However, social value created by community currencies far exceeds the economic value of each transaction. This is caused by the creation of social capital. Even though community currencies and social capital are closely linked, there is little knowledge of how they enhance each other. This research focuses on the role of social capital within community currencies and how it contributes to the success of these community currencies. From the literature, it is clear social capital is made up of trust and cooperation. In total, six different social mechanisms are found that generated trust and cooperation within community currencies. This research shows that all social mechanisms generate social capital. When more social mechanisms are triggered, the community currency seems to be more successful. Lastly, the research found that community currencies could actively generate social capital. To actively generate social capital, however, community currencies must have a lot of resources at their disposal.
Faculteit der Managementwetenschappen