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.
Highlights
It was time to try something new in delivering humanitarian and development aid.That is, modalities that build resilience in the long term, promote collective action among aid recipient communities, and increase effectiveness by using new technologies
That was the intention when the Red Cross partnered with Grassroots Economics (GE),1 a non-profit foundation operational for over 10 years in Kenya, and implemented a Complementary Currency (CC) system
In their study of trade data, Hausmann and Hidalgo (2011) claim to have found number of transactions were a sign of economic development, we would see a triana stylized fact of country or regional economic development—a negative relationship gle in the top left corner of our matrix plots in Figure 12, that goes from high to low intenbetween ubiquity and and diversity in exports
Summary
It was time to try something new in delivering humanitarian and development aid. That is, modalities that build resilience in the long term, promote collective action among aid recipient communities, and increase effectiveness by using new technologies. The introduction of new modalities of aid delivery addresses long-standing concerns among international organizations, such as the ways of targeting aid to recipients who need it the most and maximizing development impact and cost effectiveness for each dollar spent We conclude that the specific goals of ‘quality and localization’ of humanitarian funding by the Grand Bargain should look deeper into new solutions such as CC systems
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