Beyond money
Beyond money
Commitment pooling as a pattern for community currency design
Grassroots Economics recently published a letter from the field highlighting commitment pooling as a new economic protocol (read: pattern, blueprint) for seeding community currencies. I’ve collaborated with the non-profit for several years now and seen it experiment with alternative money in all its forms – from paper vouchers to a centralized database of digital money and, most recently, as “vouchers” on the Celo blockchain.
What follows are some big picture thoughts on why commitment pooling is the most innovative concept to emerge in community currency design in decades. More than just an economic model, it revitalizes age-old practices around resource coordination by expressing them through new tools.
If you’re interested in alternative money for grassroots socio-economic development, are currently running a community currency, or are thinking about starting one, this is for you.
Money is a voucher
Money is a promise. Promise implies commitment. Take airline loyalty points, Starbucks gift cards, or even national currencies – all these forms of “money” are some variation of what we call a voucher because they represent an obligation to provide future value (voucher is derived from the Latin “vouch,” meaning to affirm or guarantee).
Arguably, national currencies can be considered a poorly defined voucher. When states and banks overissue vouchers (money) without clear commitments, they risk inflation and reduce the voucher's reliability as a unit of account.
A voucher can also be described as a production loan. No service has been provided upfront, yet we trust the issuer to deliver value later. This quality of being a promise is why authors like Charles Eisenstein describe money as “a system of social agreements, meanings, and symbols that develops over time.”
But agreements can change. So, too, can the methods by which we create them and the norms governing who gets to make them.
Community currencies are vouchers
Community currencies, seen through the lens of vouchers, are just group agreements expressed in economic terms that make them fungible (read: exchangeable).
This is why a core question we ask in community development workshops is this: "If we trust the likes of Starbucks or [insert contextually relevant corporation] to issue their own vouchers, and we essentially give them a production loan when we buy those vouchers, why can’t we do the same with the people around us?”
Let’s imagine a community where everyone does, in fact, issue their own vouchers.
If I print “Rebecca” vouchers that are worth X hours of my time or $X-worth of my product, I’ve made a promise that anyone holding my vouchers will be able to redeem them. But the value of my promise is only as good as the set of social relationships in which it exists. If I have no relationships, my vouchers are worthless.
Another issue arises: using individual vouchers as a medium of exchange assumes that each person can match their commitment (the product or service they offer) with someone else’s need. As you might expect, this leads to the classic complications of barter.
But what if we put those vouchers in a basket represented by a standard unit of account? With "magic internet money" (read: distributed ledger technology, blockchains, smart contracts), we can do precisely this.
By pooling vouchers, individual commitments become communal resources. The "money" in circulation is backed by real commitments from real people, turning a basket of vouchers into a direct representation of a group's productive capacity. Where a single voucher is a signal of value, pooling vouchers is what makes those value signals exchangeable.
As an economic protocol, commitment pooling is built on the premise that individual promises are more valuable when held in common i.e. pooled. The act of “pooling” becomes the act of creating currency.
“Act” is the keyword here. As we shall see, the technology that enables this curation of value is social as much as it is economic.
For me to add you to my registry of trusted vouchers (i.e. commitment pool), I need to know that you can make good on your promises.
When working with communities that are starting this process from scratch, Grassroots Economics uses a wide range of strategies, many borrowed from successful models such as Catholic Relief Services’ comprehensive six-dimensional asset mapping (Political, Spiritual & Human, Social, Natural, Physical Infrastructure, and Financial/Economic) or the Visionary Process developed by the Uganda Rural Development Training Program. These frameworks help communities to identify and leverage their existing assets, set realistic goals and agreements, and create actionable plans to bring their visions to life.
It cannot be overstated: for any community currency, the animating "tech stack" of how relationships are built and maintained is just as crucial as the software that operates the system.
Commitment pooling in practice
"[It] sometimes felt strange to apply a complex jumble of modern economic concepts to social circumstances in Africa. The ideas did not have clear grounding in the cultural situation of the communities. As a result, we [saw] some groups performing worse than others, which prompted an inquiry. It turns out that a social contract among voucher-issuing groups was the key to their sustained [impact].” – Grassroots Economics (2024)
In 2023, Grassroots Economics integrated their community currency efforts with mweriya, a resource-pooling tradition among Kenya's Mijikenda tribes that involves exchanging resources and services rather than paying for them in cash, and often implies accepting a commitment as an IOU. “Trade” of commitments happens in sync with cyclical communal events akin to jubilees, where debts are settled and new commitments begin.
So, rather than creating new money from nothing and expecting trust (as has been the case with so many community currencies and “city coins”), Grassroots Economics embraced the community's existing traditions to guidw the process. Creating agreements (which later became tokenized as vouchers or smart contracts) started with a shared meal. Group governance followed the cadence of monthly meetings, where grievances were aired and successes celebrated. In other words, the formal economic protocol of commitment pooling functioned entirely within the animating force of relationships.
“Currency” became a tool in service of culture – not the other way around.
Less than a year after adopting this tradition, the difference between community currency groups practicing mweriya and those that don’t is stark. Groups without mweriya traditions use vouchers mainly in markets, leading to more exchanges and general economic activity but limited wealth building. In contrast, mweriya groups saw significant increases in skill sharing, social cohesion, environmental restoration, and infrastructure projects. Over 30 houses were built, and 139 farms were developed and improved.
These differences, combined with lessons from the communities themselves, prompted a fundamentally different theory of change. Grassroots Economic concluded that the challenge they now faced was not so much how to redesign money but rather “... how to support pre-monetary or non-monetary practices in order to coordinate resources more harmoniously and at greater scale.”
They went on: “If pooling of national currency was actually a step backward—a retreat from highly effective ROLAs to the colonial monetary system controlled by outsiders—why not support the pooling of individual and group commitments more directly?"
New expressions for old technology
“As we move forward, whether in developing technologies, managing resources, or building communities, we need to remember the strength found in direct connections, mutual commitments, and collective actions” – Grassroots Economics (2024)
I’m interested in commitment pooling because it is a modern economic tool derived from age-old practices of mutual aid and rotational labor. Think stokvels, chamas, merry-go-rounds, susus, and just about every other name we’ve given to practices that have long recognized the power of community bonds in securing economic resilience and shared prosperity. This new “pattern language” in community currency design is a beautiful blend between new technology (blockchains, smart contracts and liquidity pooling) and old technology (practices of mutual aid and reciprocity).
It works because it is not divorced from communal realities; instead it recognizes that trust has to be a strand in the fabric of community and wealth development; that without relationships, we are left with the soulless, discriminatory and unworkable financial system (for the majority of the world) we now have.
As a socio-economic tool, it also sidesteps the “snake oil” of purely monetary interventions which technologists and development economists tend to pursue with obsessive enthusiasm. There’s a pervasive, faulty premise that if you just give people the right tools, satisfying results will somehow emerge.
Instead, commitment pooling foregrounds the glue that binds, the animating force that makes any endeavor more meaningful and likely to succeed – relationship, shared practice, those most basic textures and rhythms that define what it means belong.
Get involved
For web3 natives: Grassroots Economics recently became a validator on the Celo blockchain, which makes them one of those rare non-profits that is financially self-sufficient. Support them by staking your Celo here.
For researchers: I’m seeking collaborators for an applied research project. Interested? Get in touch on Telegram.
For practitioners: Tell me what you think in the comments. Does any of this make sense? How can I explain this better?
For vibes: Help us collect stories on forgotten economic protocols by leaving a personal artifact on the “Beyond Money” are.na channel