Bath Papers in International Development and Wellbeing No. 56
Local currencies (LCs) are seen as a means of achieving greater local economic and environmental sustainability by keeping value circulating locally. However, there is weak evidence regarding their success on this score, not least because their achievement of scale is rare. There is rather more evidence that their social dynamics and role as "moral money" constitute their main appeal to users. Given the recent promotion of LCs in the UK as a step towards low-carbon economies, this presents an apparent contradiction since, in order to break out of their niche and reach scale, their promoters need to go beyond their proposed economic impacts to understand the incentives and reasoning involved in adopting and using them. We therefore employ realist evaluation to examine the adoption pathways of Bristol Pound (B£) users, the UK's largest LC. We find that Bristol's identity as a centre of alternative culture is a key context for adoption. Within this the values, image and identity of the B£ as alternative, along with the social networks that identify with these values, produces a nexus of potential users for the B£. At the same time, these factors also create strong boundaries to its use constraining the currency to a niche of ideologically committed and motivated users. The analysis also shows how even for some of these users shopping habits and financial security constrain use. Critically, these findings highlight the bind that LCs have to address if they are to reach scale and the economic impact to which they aspire.