Andrea Gama (CEDE): “Local currency, solidarity economy and public policy: The case of the mumbuca economy” (FRIBIS Lecture Series)

On Monday, 13 November, Andrea Gama (CEDE – Center for Studies on Inequality and Development) will present an evening lecture on “Local currency, solidarity economy and public policy: The case of the mumbuca economy”.

Time:  04:00 – 06:00 p.m.
Place: Werthmannstraße 4; HS 01 016

This lecture is an integrated part of the class “Brasilianische Perspektiven zwischen Cash Transfers, Entwicklung und Solidarischer Ökonomie“ held this semester at the Department of Social and Cultural Anthropology.

Abstract: Local currencies are a tool for social transformation and local development. They are generally created and managed by a community development bank and their use is territorially limited. In 2013, the city of Maricá, RJ- Brazil, introduced the local currency mumbuca as a means of payment for municipal cash transfer programs within their broader Solidarity Economy Program. The idea was to promote local commerce and mitigate poverty and inequality in the city. With the evolution of the cash transfer programs in place in the city since, especially the Citizens’ Basic Income program (Renda Básica de Cidadania de Maricá), the circulation of mumbuca expanded, reaching the point of being used by 26% of the city’s population by August 2020. Between February 2018 and August 2020, the total expenditure in the mumbuca economy amounted to R$ 201 million (~40,2 million euros), with beneficiaries of income transfer programs being the main participants in this economy. During this period, businesses began to use to use the mumbuca more, with a currency recirculation rate of 7% throughout the period, but reaching 26% in the months of the pandemic (April to August 2020). In the 31 months analyzed, the velocity of mumbuca circulation was 1.79 – meaning that transactions made in Mumbuca generated a value 1.79 times greater than the stock of currency in circulation. The circulation of the currency finances solidarity economy initiatives conducted by the Mumbuca Bank, benefiting the local economy and residents other than beneficiaries. With the consolidation of the local currency, the city government also expanded its uses – a currency that served mainly to be a means of benefit payment became a mean of reaching those most vulnerable in the city. In Maricá, the mumbuca became a tool for keeping municipal resources circulating within the city and an important instrument or public policy and promoting local development.

Report-Link: https://sw.jfiresearch.org/mumbuca/

Bio: Andrea Gama has a M.Sc. in Economics from Universidade Federal Fluminense. Previously, she studied a semester at the School of Economics of Tilburg University, in The Netherlands. Andrea is a member of UFF’s Center for Studies on Inequality and Development (CEDE) and the lead quantitative researcher on the Maricá Basic Income research team. Her research interests lie in applied microeconomics, social economics, and social program evaluation.