International Journal of

Community Currency Research
Volume 15 (2011) Section A 23-30
Shira Destinie A. Jones*
Shaieu Nonetaiy uoveinance builus a fiamewoik foi community level goveinance of money
anu fills pait of the gap in the liteiatuie of monetaiy goveinance. The appioach begins with
consistent tieatment by national iegulatoiy fiamewoiks vis-à-vis both national anu non- na-
tional cuiiency institutions. Regulatoiy fiamewoik toleiance is measuieu by equating moie
paiticipatoiy piocesses with highei uegiees of shaieu goveinance. The seconu pait of Shaieu
Nonetaiy uoveinance exploies inteinal monetaiy institutional goveinance. Consistent iegula-
toiy fiamewoik tieatment, tianspaiency, accountability anu paiticipation aie then applieu to all
stakeholueis affecteu by monetaiy functionality. This juxtaposition of goveinance vs. scale ie-
quiies investigation of the piocesses useu to make uecisions in monetaiy institutions. Since no
such uual-paiauigmatic investigation has been unueitaken, this papei asseits that metiics foi
such an investigation neeu to be uevelopeu. Shaieu Nonetaiy uoveinance incluues a methouol-
ogy which opeiationalises the theoietical fiamewoik piesenteu in this papei, builuing a case foi
full monetaiy uecision-making paiticipation.
The authoi woulu like to thank hei main thesis auvisoi Theo Papauopoulos, at the 0niveisity of
Bath, foi his guiuance in the uisseitation which leu to this aiticle.
* Email: uestinie_jonesÇ
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#()"&* ,)-%"&* ). /)00-"(#1 /-%%$"21 3$4$&%25 1S (A) 2S-Su <> ISSN 1S2S-9S47
This papei examines inteiactions between national Regula-
toiy Fiamewoiks (RFs), inteinal cuiiency institutional
uecision-making anu scale, uefineu heie as the functions of
money at vaiious geogiaphical ianges. Pievious stuuies of
money have tenueu to emphasise economic functionality,
while sociological appioaches such as Buchan (1997),
Simmel (1978) anu Zelizei (1997) emphasise subjective
meanings of money. The joining of stakeholuei uecision-
making access with monetaiy scale is the intent of this pa-
pei. Exteinal RFs influence all inteinal institutional ueci-
sions, anu thus all cuiiency institutions, but paiticulaily
Community Cuiiency (CC) institutions, must auapt theii
inteinal uecision-making piocesses to both exteinal iegula-
tions anu to monetaiy scale.
The papei aigues that a moie integiative analytical fiame-
woik is necessaiy in oiuei to captuie not only these uiffei-
ent influences but also theii inteiactions. To this enu the
analytical fiamewoik of Shaieu Nonetaiy uoveinance
(SNu) is uevelopeu. At its essence, SNu iefeis to the poten-
tial of all monetaiy stakeholueis to have meaningful input
into the uecisions iegaiuing money which affect theii lives.
This papei builus a theoietical fiamewoik foi SNu which
combines national iegulatoiy influence with inteinal insti-
tutional uecision- making piocesses anu monetaiy func-
tions, biinging togethei institutional ielationships, cui-
iency functions anu geogiaphical iange to unueistanu the
piocesses shaping monetaiy goveinance. Fiom theie, a
methouology is constiucteu to measuie the oveiall level of
SNu foi a cuiiency. Shaieu Nonetaiy uoveinance (SNu),
foimally uefineu heie as the oveiall level of uiiect stake-
holuei contiol ovei a cuiiency, anu measuieu via the con-
fluence of exteinal influence, inteinal uecision-making anu
scale, encapsulates all of these factois.
Table 1 shows thiee intei-ielateu elements which influence
SNu. Fiistly, exteinal policies, which incluue national anu
inteinational iegulatoiy fiamewoiks as well as maikets,
but aie limiteu in this case to national iegulatoiy fiame-
woiks, shape inteinal monetaiy institutional uecision-
making. Regulatoiy fiamewoiks affect both the goveinance
anu the functions of money at each geogiaphical level. Such
fiamewoiks act as meta-goveinance influencing uecision-
making within cuiiencies. Seconuly, cuiiency institutional
iesponses to exteinal incentives affect theii toleiance by
exteinal iegulatois. Thiiuly, scale influences both exteinal
anu inteinal monetaiy goveinance. Nonetaiy functions at
uiffeient ciiculatoiy ianges impact cuiiency stakeholueis
uiffeiently. Regulations, inteinal piactices, anu scale will
have uiffeient effects on the thiee main functions of money,
0nit of Account (0oA), Neuium of Exchange (NoE) anu
Stoie of value (Sov), which iequiie exploiation of shaieu
goveinance foi vaiious types of money. Table 1 illustiates
the inteiielation of Nonetaiy uoveinance Piocesses.
This papei will aigue that cuiiency goveinance must take
into account the influences coiiesponuing to thiee types of
monetaiy stakeholuei. Foui well-establisheu goveinance
piinciples, namely consistent Regulatoiy Fiamewoik (RF)
International Journal Of Community Currency Research 2011 Volume 15 (A) 23-30 Jones
<>?:@5>25 0> /0>5489A .0B59>8>25 /0>5489A .0B59>8>25 C90257757
Exteinal uoveinance Toleiation by National Regulatoiy Fiamewoiks foi non- national cuiiencies
(by inuiiectly affecteu stakeholueis)
Inteinal uoveinance Paiticipatoiy Inteinal Becision-making (PIB)
(by uiiectly affecteu stakeholueis)
/0>5489A #28:5 Cuiiency Scale as peicentage of Special Puipose Cuiiency (SPC)
Cuiiency 0seis (no uecision-making input) affecteu by the functions of money at
vaiious geogiaphical ianges (by uiiectly affecteu stakeholueis)
Table 1: Interrelation of Monetary Governance Processes
/)(,$!%D .)E,%(!(&, C%)&,##,# /)(,$!%D .)E,%(!(&, C%)&,##,#
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Toleiation by National Regulatoiy Fiamewoiks foi non-
national cuiiencies
(by inuiiectly affecteu stakeholueis)
Paiticipatoiy Inteinal Becision-making (PIB) (by uiiectly
affecteu stakeholueis)
Cuiiency Scale as peicentage of Special Puipose Cuiiency
(SPC) Cuiiency 0seis (no uecision-making input) affecteu
by the functions of money at vaiious geogiaphical ianges
(by uiiectly affecteu stakeholueis)
Alternative View of Table 1 - Interrelation of Monetary Governance Processes
tieatment, tianspaiency, accountability anu paiticipation,
aie applieu to each type of stakeholuei in the context of all
cuiiency institutions. RFs exteinal to cuiiency institutions
influence the goveinance of those institutions. Regulatois
aie theiefoie inuiiect stakeholueis in the goveinance of
these cuiiency institutions. Regulatois aie accountable to
exteinal bouies, but not to the cuiiency institutions them-
selves noi to cuiiency useis. The seconu type of stakeholu-
eis in cuiiency institutional goveinance aie uiiect stake-
holueis who paiticipate in inteinal uecision-making. The
thiiu type, also uiiectly affecteu but not involveu in
uecision-making, aie cuiiency useis. The powei of each set
of stakeholueis is exploieu thiough exteinal goveinance,
inteinal goveinance, anu cuiiency scale ielateu piocesses.
To facilitate this exploiation, this stuuy uiaws upon
Polanyi's (1977) concept of Special Puipose Cuiiencies
(SPCs) as a useful tool foi conceptualising functional as-
pects of money alongsiue goveinance. Polanyi listeu the
0oA, NoE anu Sov functions as iequisites foi a cuiiency to
be consiueieu pait of the categoiy of geneial puipose
money, leaving othei cuiiencies to be classifieu as SPCs if
they fill only one oi two of those functions. Polanyi (1977)
asseiteu that the limiteu functionality of SPCs alloweu the
uecision-making piocesses aiounu those cuiiencies to be
moie fully goveineu by social actois iathei than by puiely
economic inteiests. While Polanyi investigateu the social
effects of changing cuiiency function, as geneial puipose
money came to be moie wiuely useu, stakeholuei access to
cuiiency goveinance piocesses iemai ns unuei-
investigateu. The appioach taken heie is necessaiily limiteu
in scope to the exploiation of some of these goveinance
piocesses. The unit of analysis is cuiiencies, in teims of
SNu, influenceu by national RFs, inteinal goveinance anu
scale foi each cuiiency.
C%,-<&$!"+, !(- G!<% +,.!+ G%!/,*)%'#;
H)* (!$<)(!+ %G $)+,%!$<)( <(G+=,(&,#
"0nly an accountant coulu get Al Capone"
famous IRS ieciuiting postei
Shaieu Nonetaiy uoveinance (SNu) applies goveinance
piinciples to cuiiency uecisions by examining iegulatoiy
tieatment, tianspaiency, accountability anu paiticipation
foi all stakeholueis. The application of those goveinance
piinciples to cuiiency institutions iequiies the exploiation
of the effects of both national iegulations upon cuiiency
uecision-making, anu the levels of tianspaiency, account-
ability anu paiticipation in inteinal uecision-making ie-
gaiuing cuiiency-specific uecisions, namely seignioiage,
issuance, anu backing, as illustiateu in Table 2. Keeping in
minu the potentially oveiwhelming influence of national
level RFs, as the 0S Inteinal Revenue Seivice pioveu in the
case of fameu gangstei Al Capone, these uecision-making
piocesses aie also stiongly influenceu by the scale of the
cuiiency, anu theiefoie scale must be taken into consiueia-
tion when investigating the goveinance of any cuiiency
institution. Applying these in a monetaiy setting, cuiiency
institutions aie exploieu in the context of full stakeholuei
access to monetaiy uecision-making piocesses.
H)* %G %,#C)(#,# <(G+=,(&, &=%%,(&D
Cuiiencies may simply be piohibiteu out of hanu by ban-
ning the use of all non-national cuiiency tiansactions, oi
they may be uiscouiageu inuiiectly by iequiiing full con-
veitibility to a national cuiiency. Tax anu benefits agencies
can also uiscouiage wiue paiticipation in lowei income
biackets by withuiawing welfaie anu tax benefits fiom
useis of local cuiiencies, leaving innovative cuiiency insti-
tutions available only to the miuule classes (Anonymous,
2uu7). In this way such iegulatoiy iesponses affect both
functional viability anu inteinal piocesses of cuiiency insti-
tutions eithei uiiectly, by uiscouiaging full paiticipation in
these institutions, oi inuiiectly by limiting ciiculation anu
value of the cuiiency. Consistent tieatment by national RFs
towaiu uiffeiing types anu scales of cuiiencies is one key
measuie of SNu, since national RF policies shape the gov-
einance of all cuiiency institutions. The pieviously uis-
cusseu well-establisheu goveinance piinciple of faii anu
pieuicable RFs is applieu in this case to national monetaiy
International Journal Of Community Currency Research 2011 Volume 15 (A) 23-30 Jones
!"#$%&'()*# (,$ -(%" *#.(* -"(/#01"234 510 ,('%1,(* "-
'1*#"('%1, %,-*6#,&#3 3/.
"Only an accountant could get Al Capone¨ ÷famous ÌRS recruiting poster
Shared Monetary Governance (SMG) applies governance principles to currency decisions by
examining regulatory treatment, transparency, accountability and participation for all
stakeholders. The application of those governance principles to currency institutions requires
the exploration of the effects of both national regulations upon currency decision-making, and
the levels of transparency, accountability and participation in internal decision-making
regarding currency-specific decisions, namely seigniorage, issuance, and backing, as
illustrated in Table 2. Keeping in mind the potentially overwhelming influence of national level
RFs, as the US Ìnternal Revenue Service proved in the case of famed gangster Al Capone,
these decision-making processes are also strongly influenced by the scale of the currency,
and therefore scale must be taken into consideration when investigating the governance of
any currency institution. Applying these in a monetary setting, currency institutions are
explored in the context of full stakeholder access to monetary decision-making processes.
TabIe 2: InfIuence of Currency InstitutionaI Governance Processes on SMG
Influence of
on SMG:
External Regulators as
Indirect Stakeholders
ToIeration by NationaI
ReguIatory Frameworks
for non-national currencies
RF influence:
Low Potential SMG:

High RF
Toleration varies
High PÌD,
Low PÌD,
Large Scale
Low RF
effects on
Internal Decision-
makers as Direct
Currency Users (with
no decision-making
input) as Direct
Functions of Money
at user controIIabIe
GeographicaI Ranges
How RF Responses InfIuence Currency Decision-making
Currencies may simply be prohibited out of hand by banning the use of all non-national
currency transactions, or they may be discouraged indirectly by requiring full convertibility to a
national currency. Tax and benefits agencies can also discourage wide participation in lower
income brackets by withdrawing welfare and tax benefits from users of local currencies,
leaving innovative currency institutions available only to the middle classes (Anonymous,
2007). Ìn this way such regulatory responses affect both functional viability and internal
processes of currency institutions either directly, by discouraging full participation in these
institutions, or indirectly by limiting circulation and value of the currency. Consistent
treatment by national RFs toward differing types and scales of currencies is one key measure
of SMG, since national RF policies shape the governance of all currency institutions. The
previously discussed well-established governance principle of fair and predicable RFs is
applied in this case to national monetary governance in the USA. Comparing RF tolerance
levels with overall levels of SMG illustrates how US RFs respond to changes in currency
institutional decision-making processes.
National RFs shape both general monetary and SPC governance. Galbraith (1975) decried
measures such as banning gold contracts, which allowed national money to fulfil more
Table 2: Influence of Currency Institutional Governance Processes on SMG
goveinance in the 0SA. Compaiing RF toleiance levels with
oveiall levels of SNu illustiates how 0S RFs iesponu to
changes in cuiiency institutional uecision-making pioc-
(!$<)(!+ %G# #H!C, ")$H .,(,%!+ /)(,J
$!%D !(- #C& .)E,%(!(&,K
ualbiaith (197S) ueciieu measuies such as banning golu
contiacts, which alloweu national money to fulfil moie
functions, though most economists agiee with Nunuell
(1998) that centialiseu money uecieases tiansaction costs,
allowing moie efficient tiaue. National monetaiy monopoly
anu supia-national monetaiy unions piioiitise efficiency
but neglect the concentiation of monetaiy functions which
Keynes, uesell anu otheis have pointeu out encouiages
hoaiuing, leauing to monetaiy instability. Fiom a stake-
holuei peispective, national cuiiencies may inhibit piioiity
setting by affecteu communities, since national RFs can
only set policy at the national level baseu on oveiall na-
tional piioiities, given the natuie anu neeus of centialiseu
goveinment constituencies. Foi this ieason, Fung anu 0lin-
Wiight's (2uu1) auvocacy of local level paiticipatoiy policy-
setting highlights an impoitant concein foi stakeholuei
access to cuiiency institutions. Paiticipatoiy uecision-
making piocesses encouiage tianspaiency anu accountabil-
ity by iequiiing infoimation shaiing anu uebate among
incluueu stakeholueis. Thus while centialiseu institutions
may inhibit stakeholuei institutional access, paiticipatoiy
uecision-making may facilitate gieatei access foi all stake-
holueis. Bowevei, the effects of RF toleiance on SNu ie-
quiie all thiee factois of SNu to be compaieu. Analysis of
uata foi Regulatoiy Fiamewoik toleiance towaiu uiffeient
cuiiency institutions, paiticipatoiy inteinal uecision-
making anu scale examines the iole of all thiee factois of
In summaiy, national RFs in geneial influence all othei ex-
teinal goveinance mechanisms, such as business chambeis
of commeice, employeis, inteinational iegulatoiy fiame-
woiks, anu othei foices outsiue of the cuiiency institution
which shape the inteinal piocesses anu scale of all cuiien-
cies, geneial anu special puipose. Biffeient levels of iegula-
toiy toleiance can push cuiiencies in uiffeient uiiections,
anu national RFs aie moie likely to favoui national cuiien-
cies uue to the close linkages between national soveieignty
anu national money. Since those RFs give piefeience to
national money in pait uue to its natuie as geneial puipose
money, national money coulu thus potentially have lowei
oveiall levels of SNu. Consistent RFs aie but one out of foui
goveinance piinciples upon which SNu is built. The ie-
maining thiee piinciples of tianspaiency, accountability
anu paiticipation aie opeiationaliseu thiough SNu by in-
vestigating inteinal uecision-making piocesses anu scale.
Although these last thiee goveinance piinciples aie en-
compasseu by the inteinal uecision- making piocesses of
eveiy cuiiency institution, those veiy same inteinal pioc-
esses aie heavily affecteu by exteinal RFs. Bence those
piocesses aie exploieu next.
$%!(#C!%,(&DL !&&)=($!"<+<$D !(- C!%J
$<&<C!$)%D -,&<#<)(I/!'<(. E<! #,<.(<)%J
!.,L <##=!(&, !(- "!&'<(.
Butchinson (2uu2) ciiticises macio-economic theoiy,
pointing out theoietical gaps in monetaiy goveinance, yet
not fully emphasising paiticipatoiy cuiiency uecision-
making piocesses as they ueiive fiom those goveinance
gaps. Likewise, existing analytical appioaches have tenueu
to exploie eithei global political economic goveinance as
Ceiny (2uuS) uoes, oi to focus on one naiiow aspect of
local cuiiency functioning, leaving out cuiiency-specific
piocesses as they apply to all stakeholueis. While the func-
tions a cuiiency emphasises uo not have to uictate Paitici-
patoiy Inteinal Becision-making (PIB) levels, functional
emphasis ceitainly influences institutional uecision-making
piocesses. Existing appioaches uo not fully exploie stake-
holuei influence on monetaiy uecision-making, yet foi this
stuuy it was necessaiy to biing these functional conceins
togethei within a goveinance fiamewoik. To exploie these
inteiacting systems of goveinance, the piinciples of consis-
tent iegulatoiy fiamewoiks, tianspaiency, accountability,
anu paiticipation aie applieu to thiee key cuiiency institu-
tional uecision-making piocesses: uistiibuting seignioiage
ievenues, issuing cuiiency, anu backing the cuiiency. 0nly
taken all togethei can an unueistanuing be constiucteu of
the level of SNu foi a cuiiency institution. Two of these
foui influences, tianspaiency anu accountability, aie con-
tiolleu moie by inteinal institutional piocesses. The othei
two issues, legal fiamewoiks anu paiticipation, aie laigely
ueteimineu by the exteinal RFs suiiounuing the cuiiency
institution anu by the scale of that institution as they affect
stakeholuei paiticipation. Sen (1999) points out that pai-
ticipation in uecision-making is the iight of 8:: affecteu
stakeholueis, anu SNu is a conceptualisation of oveiall
stakeholuei paiticipation in the monetaiy goveinance
piocess. Fung anu 0lin-Wiight (2uu1) aigue that
community-baseu institutions facilitate paiticipatoiy
uecision-making, with which Bohman (1997) concuis, ai-
guing that stakeholueis must be empoweieu to use infoi-
mation. Inteinal piocesses foim the basis of institutional
goveinance, but if implementation of those inteinal pioc-
esses is obstiucteu by iegulatoiy fiamewoiks oi by scale,
then paiticipation in uecision- making may be iestiicteu.
Bence Regulatoiy Fiamewoik toleiance, inteinal uecision-
making piocesses anu scale must be investigateu togethei
to unueistanu the oveiall effect on seignioiage, issuance,
anu cuiiency backing uecision-making.
Applying the piinciples of tianspaiency, accountability anu
paiticipation to monetaiy institutions iequiies exploiing
how seignioiage ievenue uecisions aie shaieu among cui-
iency stake-holueis. Seignioiage uecisions aie pivotal in
shaping cuiiency institutional goveinance thiough both
inteinal uecision-making piocesses anu seignioiage ieve-
nue uistiibution. Bubei's (2uuu) auvocacy of cential bank
uistiibution of those ievenues acknowleuges the "Constitu-
tional Consensus" foi shaieu benefit of common iesouices,
but neglects the shaieu uecision-making powei also im-
plieu by that consensus. Piivate cuiiencies in contiast, aie
International Journal Of Community Currency Research 2011 Volume 15 (A) 23-30 Jones
accountable only to the piivate institutions which issue
them, potentially limiting shaiing of uecision-making baseu
on business piioiities. Although loyalty seignioiage uistii-
bution uecisions aie maue by the issuing fiims, loyalty pio-
giams coulu be vieweu as a means of shaiing in issuance
uecision-making by encouiaging membeis to buy accoiuing
to shaieu piioiities anu noimative values.
Issuance uecision-making is a seconu key piocess opeia-
tionalising tianspaiency, accountability anu paiticipation in
inteinal cuiiency institutional goveinance. While national
cuiiencies aie issueu by inuepenuent cential banks, the
issuance piocesses of SPC institutions aie heavily influ-
enceu by exteinal RFs. This iequiies institutions to take
into account anu attempt to uovetail with those iegulations
anu such accommouation may altei inteinal institutional
uecision-making. The thiee most common types of SPC
institution emphasise the thiee main functions of money:
0oA, NoE anu Sov. Nutual Cieuit Systems (NCSs) as cieuit
baseu cuiiencies may have uifficulty auapting to limits on
issuance (anu on backing). Cuiiencies which issue physical
notes, such as Ithaca Bouis oi the oluei Faim Exchange
Sciip cuiiencies of the 19Su's, have a moie limiteu ability
to issue cuiiency than an NCS, but may be potentially moie
compatible with 0S national RFs. Time baseu cuiiencies by
contiast aie baseu on mostly non-ciiculating meuia anu
may thus be natuially moie uifficult to iegulate, whilst also
avoiuing oveilapping functions with national cuiiencies.
Time Bollais aie an example of such a cuiiency, emphasis-
ing the Sov function ovei othei functions, thus gaineiing
issuance uecision-making fieeuom. No mattei which mone-
taiy function a cuiiency emphasises, that function will sig-
nificantly influence geogiaphical ciiculation, in tuin affect-
ing issuance uecision-making piocesses. SPC institutions
which emphasise uiffeient monetaiy functions may also
neeu uiffeient types of inteinal stiuctuies anu inteiact uif-
feiently with exteinal RFs. This may leau to uiffeient poten-
tial levels of SNu foi uiffeient types of SPC institutions
baseu on theii uiffeiing abilities to shaie cuiiency issuance
uecision-making. Piivately issueu cuiiencies in paiticulai
may allow little cuiiency usei uecision-making, as they aie
obligateu to piioiitise piofits. 0n the othei hanu, loyalty
cuiiency issuance can be paitially constiueu as shaieu
baseu on puichase by consumeis. This nonetheless lacks
full paiticipation since uecisions anu teims of issue aie
fixeu by the issuing fiim.
Choice of backing is the thiiu key influence affecting tians-
paient, accountable anu paiticipatoiy monetaiy uecision-
making, the neeu foi which }essop (1999) emphasises, pai-
ticulaily tianspaiency anu accountability, in monetaiy gov-
einance. Backing uecisions shape the inteinal piocesses
anu shaieu goveinance potential of all cuiiency institu-
tions. Commouity-backeu cuiiencies may facilitate a foim
of paiticipation in backing uecision- making since a vaiiety
of commouities can be offeieu foi cuiiency ieuemption.
Fiat cuiiencies like cieuit baseu 0oA emphasising foims of
money (i.e. NCSs) may be moie limiteu in theii ieuemption
options. Bespite the functional uiffeience between com-
mouity- backeu money anu fiat money, both types of money
have been useu foi geneial anu special puiposes. Econo-
mists fiequently uiscuss the iamifications of commouity vs.
fiat money fiom a monetaiy efficiency peispective, since
the commouity which backs a cuiiency affects cuiiency
stability. Bowevei backing uecision-making is also an im-
poitant goveinance piocess. Theiefoie whethei a cuiiency
institution offeis cuiiency useis a choice of backing in
which to ieueem the cuiiency is emphatically a monetaiy
goveinance concein.
Tianspaiency anu accountability can be optimiseu foi
monetaiy institutions thiough paiticipatoiy uecision-
making piocesses involving seignioiage, issuance anu back-
ing, subject to exteinal iegulation anu scale in teims of both
function anu geogiaphy. The cuiiency function an institu-
tion chooses to emphasise affects the geogiaphical ciicula-
tion of that cuiiency, which in tuin affects inteinal institu-
tional piocesses. Theiefoie the next section will uiscuss
inteiactions between cuiiency functions anu geogiaphical
&=%%,(&D =#,% <(G+=,(&, )( .)E,%(!(&,
E<! #&!+,
Although functionality uominates monetaiy uiscussions,
connections between goveinance anu monetaiy functional-
ity aie laigely neglecteu. Nonetaiy function affects mone-
taiy stakeholueis who theiefoie have a iight to paiticipate
in monetaiy goveinance. Cuiiency scale incluues both
Polanyi's (19S7) cuiiency functions anu geogiaphical ciicu-
lation both within anu outsiue of the nominal aiea foi the
cuiiency, as Chinn (2uuS) explains. Scale affects uecision-
making in at least thiee ways which aie ielevant to this
papei. Fiistly, the functional behavioui of money changes
with geogiaphical ciiculation. Seconuly, scale (both func-
tional anu geogiaphical) affects seignioiage uistiibution
uecisions (Neumann, 1992). Thiiuly, geogiaphical iange
affects uiiect uecision-making paiticipation potential foi
institutional stakeholueis (Fung anu Wiight, 2uuS).
Whethei by auuing moie functional expectations to a cui-
iency, foi instance by using the same cuiiency as both a
NoE anu Sov as Keynes (19Su), uesell (19u6) anu uieco
(2uu1) point out, oi by incieaseu teiiitoiial ciiculation, as
seignioiage heaiings befoie Congiess (2uuu) illustiate,
both technical functions anu geogiaphical ciiculation
change the scale of the cuiiency. Scale changes to a cui-
iency, incluuing changes thiough conveitibility between
cuiiencies, in tuin affect issuance anu sometimes backing
uecisions. Scale anu goveinance aie thus inextiicably
Functions of money, which most cuiiency typologies em-
phasise, play the fiist key iole in monetaiy scale. Bowevei
this emphasis on function neglects the iegulatoiy anu in-
teinal goveinance context of cuiiencies. uieco (2uu1) foi
instance suggests a backing-ueteimineu functionally-baseu
classification system foi local cuiiencies. Be uiscusses puie
economic viability baseu on functional emphasis of vaiious
cuiiencies, thus to some uegiee he uoes exploie the uiffei-
ence between cuiiencies which aie conveitible to national
International Journal Of Community Currency Research 2011 Volume 15 (A) 23-30 Jones
money, anu hence moie closely linkeu with geneial puipose
money, but he uoes not elaboiate on foims of goveinance
within those cuiiencies. Foi that ieason his typology can-
not be applieu in this stuuy. Balton (196S) classifies vaiious
foims of money baseu on cultuial context into Polanyi's
Special Puipose Cuiiencies (SPCs). As uiscusseu pieviously,
SPCs aie classifieu as such because they uo not fill all thiee
of the following functions: 0oA, NoE anu Sov.
The gieatei numbei of functions filleu by geneial puipose
money may inciease the uifficulty of shaiing uecision-
making aiounu uisbuisement of seignioiage ievenues, cui-
iency issuance, anu backing choices. 0oA emphasising cui-
iencies, as the most limiteu scale of all cuiiencies, woulu be
expecteu on these giounus to have the highest levels of
shaieu inteinal uecision-making. Inteinal piocesses must
also vie with exteinal iegulations foi influence on SNu
within a cuiiency institution. Function shapes both inteinal
institutional goveinance anu the ability to link with extei-
nal institutions. Functional emphasis may also influence
motivation anu values of objective setteis within institu-
tions. All of these issues affect inteinal uecision- making.
ueogiaphy plays the seconu key iole in monetaiy scale,
uelimiting cuiiency ciiculation ianges. The walking uis-
tance limits of a local neighbouihoou might be at most S
miles acioss foi most fit people. Nany Local Exchange Tiau-
ing System (LETS) cuiiency useis foi example have com-
menteu that such iange limitation was an impoitant com-
ponent of tiauing. The next logical step is a city-wiue ciicu-
lation iange. The thiiu woulu be iegional, such as the Pa-
cific Noith West in the 0niteu States, while the fouith iange
coulu be the national bounuaiy. The fifth anu final iange
woulu be that of the supia-national anu inteinational ciicu-
lation iange, such as the Euio, oi the 0S Bollai. The wiuei
iange of ciiculation a cuiiency has the gieatei will be the
impact on its goveinance.
Special Puipose Cuiiencies (SPCs) incluue tiansfeiable
cuiiencies which act as a NoE but aie not useu to stoie
futuie value, anu cuiiencies which holu futuie value, but uo
not ciiculate as a NoE. Piivately issueu cuiiencies can also
ciiculate as a type of complementaiy cuiiency, filling 0oA
anu eithei the NoE oi Sov function, being tiansfeiable
within a limiteu usei gioup, ieueemable foi goous anu
seivices with an expiiation uate, oi othei exchange limita-
tions. Since such SPCs aie piivately contiolleu, anu can
limit ciiculation by ieuemption eligibility oi by geogiaphi-
cal bounuaiies, cleaily not all SPCs will have a high uegiee
of SNu.
&)(E,%$<"<+<$D !(- #&!+,
If conveitibility between local anu national cuiiency influ-
ences functionality, then it influences scale as well. Fluctua-
tions in national monetaiy value will have uispiopoitionate
impact on conveitible local cuiiencies, impacting ciicula-
tion. uomez (2uu8) emphasises the impoitance of open
conveitibility between community anu national cuiiencies.
This tiait can be paitly useu to ueteimine if a cuiiency is
geneial oi special puipose, since the ability to exchange oi
conveit between cuiiencies links them moie closely. Foi
this ieason, conveitibility is weighteu moie heavily towaiu
the geneial money enu of cuiiency scale. When such con-
veitibility is manuateu by national RFs, a uiiect effect on
the cuiiency will be to keep that cuiiency legally viable. 0n
the othei hanu, possible seconuaiy effects of this piice of
RF toleiation incluue some loss of cuiiency useis' ability to
choose the backing in the case of fiat a cuiiency anu inui-
iectly less usei contiol ovei cuiiency uecision-making.
National cuiiencies anu laigei scale community-baseu cui-
iency institutions weie initially hypothesiseu to be bettei
toleiateu by national RFs, uue to the connection between
geneial puipose money anu maikets which national RFs
oveisee. Scope limitations pievent a laige- scale stuuy fiom
being unueitaken, but this theoietical anu methouological
fiamewoik may be applicable to many moie cases. National
RFs in the 0niteu States classify cieuit baseu 0oA cuiien-
cies such as LETS as baitei anu foi this ieason LETS aie not
stuuieu heie.
The concept of Shaieu Nonetaiy uoveinance (SNu) foims
pait of a giowing liteiatuie ielateu to the goveinance of
money at community levels, anu can be applieu acioss uif-
feient time fiames anu locations. While limiteu scope pie-
vents the auuition of fuithei cuiiencies fiom othei nations
in this stuuy, it fills pait of the gap mentioneu by Butchin-
son (2uu2). The fiist pait of SNu entails the consistent
tieatment by national RFs vis-à-vis both national anu non-
national cuiiency institutions. The extent of a cuiiency
institution's ability to facilitate access to uecision-making
foi all stakeholueis may uepenu on the level of national RF
toleiance. RF toleiance is measuieu by equating moie pai-
ticipatoiy piocesses with highei uegiees of shaieu govein-
ance. The seconu pait of this theoiy exploies inteinal
monetaiy goveinance. Non-national cuiiency institutions
aie vieweu heie as small scale anu potentially moie pai-
ticipatoiy stiuctuies. Paiticipatoiy Inteinal Becision-
making ciiteiia aie uevelopeu to ueteimine if such institu-
tions uelivei gieatei accountability anu tianspaiency to
useis of local cuiiencies. Paiticipatoiy Inteinal Becision-
making (PIB) is measuieu by the level of community acces-
sibility to paiticipatoiy uecision-making piocesses which
aie ciucial to monetaiy goveinance, namely seignioiage,
cuiiency issuance, anu backing uecision- making. The final
pait of SNu iecognises the impoitance of scale, which is
compiiseu of both the functions of money anu geogiaphical
ciiculation, as a ciucial influence on cuiiency institutional
goveinance. Two key conceins make the scale of SPCs im-
poitant to monetaiy goveinance, anu they aie: fiistly that
the smallei numbei of monetaiy functions fulfilleu by SPCs
affect cuiiency uecisions uiffeiently than monetaiy institu-
tions which issue cuiiencies that fill moie functions, anu
seconuly that smallei geogiaphical iange may allow gieatei
levels of paiticipatoiy uecision-making. Both of these con-
ceins unueiline the impoitance of scale to shaieu govein-
International Journal Of Community Currency Research 2011 Volume 15 (A) 23-30 Jones
Cleaily, exteinal goveinance anu functional factois inteiact
with inteinal money cieation uecision-making piocesses
acioss geogiaphical bounuaiies, iaising questions iegaiu-
ing the extent to which any existing cuiiencies fit the ciite-
iia of Shaieu Nonetaiy uoveinance. Baseu on theoietical
anu empiiical exploiation, SNu seeks to pioviue a measuie
of that potential foi all stakeholueis to influence cuiiency
uecision-making, asking:
- To what extent, if any, uoes institutional sponsoiship
affect levels of RF Toleiation, PIB, scale, anu in tuin,
oveiall SNu.
- To what extent, if any, uoes scale ueteimine the ue-
giee of SNu, anu uo the smallest scale cuiiencies
necessaiily have the highest levels of SNu.
In conclusion, the goveinance piinciples of consistent iegu-
latoiy fiamewoik tieatment, tianspaiency, accountability
anu paiticipation as applieu to all stakeholueis who aie
affecteu by monetaiy functionality iequiies investigation of
the piocesses useu to make uecisions in monetaiy institu-
tions. Since no such uual-paiauigmatic investigation has
been unueitaken, this papei asseits that metiics foi such
an investigation neeu to be uevelopeu. This stuuy initially
hypothesiseu that small scale cuiiency institutions, moie
so than geneial puipose money, bettei facilitate paiticipa-
toiy stakeholuei uecision-making. Yet loyalty piogiams,
wheie they aie tiansfeiable, geneially have limiteu use as
money, hence aie also SPCs, cieating a paiauox in which
small scale cuiiencies in fact tuineu out to allow cuiiency
useis !"## uecision-making powei than useis of laige scale
geneial puipose money, since uecision-making foi loyalty
cuiiencies can be limiteu to owneis of business institutions
issuing the cuiiencies. Theiefoie, while both community-
baseu SPCs anu piivately issueu SPCs coulu potentially
auuiess the lack of usei uecision-making influence in
monetaiy goveinance (by facilitating gieatei institutional
access), a measuie of such access is impoitant in establish-
ing ciiteiia foi full Shaieu Nonetaiy uoveinance anu what
types of institutions actually facilitate gieatei levels of SNu
oveiall, anu Paiticipatoiy Inteinal Becision-making in pai-
ticulai. In the light of these conclusions, it is suggesteu that
policy which encouiages the cieation anu use of small scale
cuiiencies thiough community-baseu institutions coulu
help inciease levels of access to both economic iesouices
anu the uecision-making piocesses that ultimately contiol
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