Research Proposal: Local Exchange Trading
Schemes
Why have some failed and others succeeded ?
We are pleased to announce that seed funding for this research
project has been donated by the Co-operative Dividend Fund,
amounting to £900 in January 2005. Although this is
a relatively small amount of money, it indicates support for
our organisation from a key Funder, and as such, its value
extends beyond the actual monetary amount contributed.
LETSlink UKs objects (as in its Memorandum
and Articles), are the advancement of public education and
the promotion of research (and the publication of useful results
of such research) in the development and practice of local
exchange systems including LETS (Local Exchange Trading Schemes),
for community and environmental benefit or for the relief
of poverty.
It will be noted that this definition does not exclude groups
following the Letsystem model or the Timebank model, and it
will be to the advantage of the research to include the broadest
possible range of styles. The hallmark of this research is
that it is emanating from inside LETSlink UK, with the needs
of its member-groups in mind. The research will fall into
several distinct stages, starting with an initial fact-finding
mission before a more detailed analysis of management styles
is possible. At each stage we intend to feed the results back
to participant members so that they can be the first to benefit,
before the results are applied to any outside agenda.
(I) RE-ESTABLISHING BASIC CONTACTS: On the face of it
this looks like a simple clerical exercise. However, we have
not been in touch with some schemes for a long time because
lack of resources in LETSlink UK have meant no newsletters
or other means of outreaching to members. Therefore when checking
up on contacts we may find we need to be sensitive in listening
to stories which may emerge about what has been happening
in the group, and in following up leads to new contacts which
are offered to us, without closing off the opportunity to
receiving relevant information for later stages in the research
from outgoing organisers. The methods adopted may include
telephone calls, manual form-filling, and web-filing of information.
Progress of the research will be reflected on the LETSlink
UK website by the gradual addition of phone numbers and web-links
on the regional pages. This exercise may be linked with invitations
to re-subscribe to LETSlink UK to provide internal funding
for the research, and rewarding member groups with tangible
services supplied by LETSlink.
(II) LOOKING AT THE FORMAL STRUCTURE OF THE LETS GROUPS: This
stage involves recording factual data such as number of people
involved, their roles, the reporting lines, the administrative
tools they use, and the constitutional structure of the scheme
and facts such as history of the group in terms of founding
date, currency names, dissolution of groups and/or restructuring
such as merging with other groups, changes of names or geographical
boundaries etc in response to internal or external factors.
Assessing he group as being launched, thriving, in plateau
mode, declining, quiescent or folded. Where and how data is
held. How members are managed in terms of reputation, credit
control, membership renewal, equal or varying time values.
Whether currency vouchers are used. How the group encourages
trading, eg by arranging social events, trading days, auctions.
And so on. From this data we may be able to classify and map
groups against opposing criteria in two dimensions, such as
hierarchical/flat, and community/commercial, and begin to
discern common patterns with regard to the life cycles of
groups, and identify particularly successful styles of organisation.
(III) DETAILED FACTUAL STUDIES OF GROUPS: We might
continue, with a selection of those groups who are willing,
on deeper study of objective structural data such as ages
and gender of members, their ethnicity and social classes,
their occupations and status with regard to welfare services,
residency status, health, and disability, the effects participation
in the group has on them, etc. These will be factors that
organisers may well have a sense of without having researched
the data exactly. Depending on what record systems are in
place, groups may or may not know what the turnover of their
currency has been in a given period and what the trends are
in terms how many long-term defaulters there are, or how rapid
the turnover is of actual members. or be able to report qualitatively
on the type of trading taking place, and if such information
is not known and management systems are offered to groups
to measure this data, the research process itself will have
influenced the management style of the group. From news of
the research, groups may spontaneously decide to adopt different
methods in order to stimulate, and manage trade.
(IV) ASSESSING MANAGEMENT STYLES OF GROUPS. Observable
facts will indicate the model of LETS that organisers think
they are following but there may be discrepancies between
what members think the structure is and are what is actually
occurring. Both in the management group and amongst the ordinary
membership there may be varying view on whether they are members
of a community group or an enterprise. There may be conflicts
within the management group as to what methods should be followed,
and power struggles may follow, resulting in breakaway groups
and failure of the group as a whole. Ordinary members may
or may not agree with the methods being used by the management
group, and schemes may vary in the extent to which ordinary
members can influence decision-making. Looking at what strategies
for running LETS have succeeded and what strategies have not
succeeded, can we identify a number of different successful
strategies? How influential are personal relationships and
group pressures - must there be a key individual or can genuine
democratic decision-making work? Can we relate those factors
to what tends to happen over the lifetime of a LETS - is there
a common pattern of rise and fall, and can we identify strategies
to sustain the groups, in the face of ongoing entropy?
(V) INDIVIDUAL INTERVIEWS to elucidate
participants attitudes to and belief systems around the way
the LETS scheme is conducted will be a rich source of detail
which will illuminate the purely factual data obtained in
the objective surveys of groups.
CONCLUSIONS OF THE RESEARCH: Is there a case for more
prescription in running LETS, for training and accreditation?
Should there be different styles for different types of situations,
eg professional led with client membership (ala Timebanks)
as well as user-led more independent democratic styles. Should
these different styles be identified so that groups have a
choice about which style they adopt? What about groups already
established for other purposes of which there is a wide range
in both the voluntary and busiiness sectors. Can we identify
how best to "add on" a LETS component to their already healthy
community activities - or maybe to provide a way of facilitating
the management of exchanges that are already taking place?
Other conclusions will no doubt arise.
METHODOLOGY
At all stages research results should be open
and available to the participants themselves as well as the
wider LETS community on an ongoing basis, perhaps starting
with a pilot in one area and moving around to others either
in sequence or in parallel. Results should be reported on
and discussed by meetings at local level (attendance costs
funded), recording changes in management styles of the participants
as a result of internal analysis and contact with neighbouring
The attached notes cast more light on the theoretical
aspects of the research.
1. Introduction: primary hypotheses
The title given above: LETS: Why do some fail and others succeed
is the starting hypothesis. There are enough LETS schemes
around, and they have been functioning long enough to have
a reasonable sample for asking questions about why some fail
and others succeed.
In order to answer such a question, we need to formulate some
more detailed hypotheses concerning the factors which lead
to success or failure.
2. Theoretical perspectives that could help
The most obvious starting point for such a study is simply
a survey of LETS documenting the factors that successful vs.
unsuccessful groups have in common.
While qualitative work would indeed be invaluable in uncovering
what is going on in LETS, and little so far has been done,
without some kind of theoretical framework a great deal of
time and effort will have to go into developing a framework
de novo.
The most obvious approach from a social psychological point
of view is to treat LETS as examples of more or less co-operative
groups. Deutschs (1985) theory of social relations predicts
that a) more egalitarian groups will be more co-operative
and b) that more co-operative groups will be more productive
(Johnson, Maryuama et al., 1981) in LETS terms have
a higher level of trading.
The theory of relational models (Fiske, 1991, Fiske &
Haslam, 1992) predicts that people will use four basic templates
to build a model of a social relationship. Having such a model
is crucial to establishing a harmonious social group and permitting
interaction on the same basis if I think I am in a
social group my norms and values will be quite different from
someone who thinks they are in a purely economic exchange
relationship. Work in conflict resolution has demonstrated
that a major cause of intractable conflict is when parties
to an interaction do not hold the same model of the situation.
Therefore their success as a social group will be dependent
upon their being able to fashion such a model and that model.
Alongside such psychological approaches and complementary
to them (since the psychological approach is based on the
consonance of social relationship and allocation of resources)
are quantitative analyses of resource allocation across the
members of a LETS, and analysis of the circulation of resources
and currency around the system. A cross sectional approach
is unlikely to be sufficient since we need to look at the
build-up of credits etc. over time as suggested by anecdotal
evidence that participants may withdraw supply when they have
a sufficiency of credit, leading to price inflation. (This
is in contrast to the conventional economic model in which
suggests that oversupply of money results in price inflation).
It is important to realise that peoples perceptions
of the allocation are as important as the actual allocation,
and the distribution of resources/ model of exchange that
people feel is the right one for that situation. These will
be part of a larger model of the situation. It must also be
remembered that the model people consciously use and argue
for may be quite different from the latent model which they
also hold.
There will also be the more concrete operational factors particular
to how LETS work which can be built up from the experience
of the LETSLINK co-ordinator.
3. Methods
There is a limited amount of work already done on barter and
alternative exchange systems but further qualitative work
would almost certainly repay the effort involved. Any half
decent study would do preliminary work in order to design
a questionnaire in any case.
Qualitative work could be done on a case study basis with
a view to building a model of how LETS operate. This need
not necessarily be large scale, say involving about 25 interviews.
It could then be used as the basis for developing a questionnaire
to be sent to a larger sample.
The input of the LETSLINK co-ordinator would be key to devising
a topic guide but there is sufficient theoretical background
for a semi-structured approach rather than a purely grounded
theory approach (when even theory is taken from the data).
Instead the first interviews would be treated as a pilot and
the topic guide revised accordingly.
The timescale envisaged for the whole study would also be
a crucial determinant of whether and to what extent qualitative
work was undertaken. Material from qualitative interviews
would need to be at least part transcribed. An alternative
to transcription is annotated recording of the key parts of
the interview. Verbatim transcripts are expensive and expecting
a research assistant (this would be appropriate for Ph.D.
work) to do all of it would slow down completion of the project.
This material would then be subject to content analysis for
categories of interest, such as co-operative attitudes, model
of the situation, hoarding/saving attitudes (and these would
ideally be supplemented with behavioural data from the accounts
of the LETS), perception of the distribution/circulation of
resources and currency. However, good qualitative work really
requires more than one coder both for the development of a
coding scheme and for reliability purposes.
Interview material would be used to develop a questionnaire
and the use of an outside consultant with the appropriate
experience might actually be cost effective. The interviews
and primary research would also be used to initiate interest
in the study, thus improving response rates.
A survey will permit the investigation of both attitudes and
demographic factors (both descriptive and explanatory). If
possible an interview survey would increase the quality of
the data and also allow some open-ended responses which can
then be analysed for more detailed material. This would considerably
increase the power of the study because of the availability
of a greater pool of spontaneous material.
4. Resources
The project as here outlined could easily be done by a single
researcher as part of a Ph.D project, supplemented by the
use of a post-doctoral researcher for the development of the
coding frame and analysis of the data. Complete transcription
of interview material is expensive (£30 per hour is
considered a standard rate in London). A sharing of resources
between the "academic" and the "organisational" partners in
the project should enable their various purposes to be achieved
- more detail on this to be discussed.
5. Key issues
The social (psychological) factors affecting LETS group
interactions (attitudes etc.)
Common operational factors
The interaction between subjective perceptions and
concrete circumstances
The circulation of currency and factors relating to
the currency supply
The Research Group
We need to add more on how we combine the resources of LETSlink
with CAOS and facilities at LSE and UCL and how we get support
for this to make it a fundable proposal. People who could
be involved are Mary Fee, Secretary of LETSlink UK (original
degree in BA Hons Psychology), Rosamund Stock, Researcher
in Social Psychology at LSE, who is looking at a number of
new approaches to democratic systems, Colin Williams who headed
up an ESRC-funded survey of LETS in 1997- 1999 or thereabouts
and is currently Professor of New Styles of Management at
Leicester University - we have also had discussions with others.
who might wish to be involved.
From this group we need to work out the structure and timescale
of the research proposal: who is looking to do the
work and on what financial basis, and will it form part of
a thesis, who are in a supervisory role who are collaborators
and what outcomes are they looking for who are we looking
to for funding. How will we organise ourselves in the planning
stages? Shall we proceed with the initial survey under the
guidance of the supervises in anticipation of more funding
to materialise for the later stages of the research? And so
on.
First draft as at 29/1/2005 by Rosamund and
Mary Fee
Slightly amended at 18/5/2005 for pressentation at the CAOS
seminar.
QUESTIONNAIRE - the beginnings - DRAFT based on previous questionnaire
Name of LETS Group ______________________________________________________________
May we identify your group in a presentation ? Yes____ No____
(ie only statistics to be given)
Your Catchment Area: County _________Towns _______ Postcodes
______ Region Name ________
Coordinators Name___________________________ Phone number/s
__________________________
Coordinators Postal address____________________________________________________________
Coordinators Email address____________________________________________________________
Contact Persons Name _________________________Phone
number/s _________________________
Contact Persons Email address_________________________________________________________
Year Group was founded or projected launch date ______Current
number of paid up members ______
Do your Groups membership numbers seem to be: Rising
____ Static______ Falling ______
Maximum number of paid up Members you have had at any one
time? ______ In which year? _______
Actual or Estimated Total Number of Members who have been
involved since the Group started _____
Describe the Events your Group holds (choose any): Planning
___ Social ___ Trading ___ Outreach___
Does the level of recorded trading within your group seem
to be: Rising ____ Static ____Falling ____
Total Number of
LETS Transactions within your Group in the year April 2002
to April 2003 ________
Your Groups Total Turnover in sterling-equivalent LETS
currency: April 2002 to April 2003 _______
Do you estimate that the level of unrecorded Trade is: Rising
_______ Static _______Falling _______
In your opinion is your LETS Group: Prospective ________ Healthy
________Declining __________
Do you keep in touch with other LETS groups in your area?
Yes/No ______ Please give details ____:
If you can add any other comments to support the above, or
as additional information, that would be helpful, including
suggestions for additional survey questions for the next stage
of our co-research.
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