Social Currencies As a Potential Public Policy for Poverty Reduction

Governments around the world (Alaska, South Korea, India, and Argentina) have implemented income transfer policies based on Social Currencies as a strategic way to address challenges such as employment, poverty, and inequality. In this regard, in line with the Millennium Development Goals, this research aims to analyze whether and how the Arariboia Social Currency impacts inequality, poverty, and economic and social development. This research investigates the impact of this Social Currency, a non-traditional cash transfer program that has not been academically studied. It aims to assess the emancipation effects - through the Mackeigan (2004) capital model - of the program, as well as potential negative consequences like labeling and stigmatization of beneficiaries (Dubois, 2010; Marins, 2017 and Lipsky, 1980). The Arariboia Social Currency seeks to reduce inequality and promote local economic development through a digital currency circulating exclusively in Niterói/ Rio de Janeiro. This year, the program reaches 45,000 families. The research evaluates how the program fosters social inclusion and poverty reduction, while also addressing challenges like digital exclusion and income-based eligibility. The empirical component includes quantitative analysis from CadUnico (an instrument for identifying low-income families for the selection of beneficiaries and their integration into the government social programs) to profile beneficiaries by age, gender, race, and territory, examining inequalities in access. Additionally, focus groups and interviews will be conducted with key stakeholders, such as bank employees, merchants, beneficiaries, and public agents. Finally, the study highlights the importance of understanding local decision-making and the social, political, and economic effects of such policies, the research contributes to literature on policy implementation through and enriches the debate on solidarity economies and social currencies. This research is funded by the Research Support Foundation of the State of Rio de Janeiro (FAPERJ) and by the National Council for Scientific and Technological Development (CNPq).