Tools for Participatory Economic Analysis

Thai Community Currency Systems Project

Created by Jeff Powell and Menno Salverda


The Bucket
Coupon Flow Example
The Resource Flow Exercise (AKA The Coke Exercise)



Like the 'Community Currency Role Play', the following activities can be used by Community Currency Systems (CCS) practioners to increase awareness and understanding of CCS; how they work, and where they fulfill a need. Problems of the current monetary system and its impact on our local economies can be easily addressed. The activities are explained underneath in detail. We would welcome any comments, suggestions and improvements. Enjoy!


Activity: 'The Bucket’

Objective: ‘The Bucket’ is a simple, participatory activity that allows participants to understand how and why money flows out of a community. Visual reinforcement.

Preparation: Two buckets are required. Puncture about a dozen holes through one of the buckets and then cover the holes with masking or electrical tape. It works well if you fold over a corner of the tape so that it can be removed easily without having to scrape it off with your nail! Test out the size of the holes—if they are too small, water will not be able to flow out; if they are too large, the tape will not hold. Fill the second bucket with water.

Note: The activity is best conducted outdoors where water can be splashed about. If it is necessary to do the activity indoors, the empty bucket should first be placed in a large basin or washtub.

To begin: The facilitator begins with two buckets—one empty and one full. The empty bucket, which represents the local economy, is placed on the ground and participants stand around it. Everyone should have a clear view of the bucket. Ask participants how they earn money in their community. As responses are given, ask that person to pour some water from the full bucket into the empty bucket in the middle. A lot of water denotes a primary income-generating activity; a little water symbolises a secondary enterprise. If an activity is suggested which involves trading within the community, no additional water should be poured into the bucket—this represents a transfer of money from one community member to the next.

Once the community economy bucket is nearing full or participants are out of income generating activities, explain to participants that the goal of community currencies (or any CED activity, for that matter) is to encourage the money to circulate many times within the community. Stir the bucket with your hand or a stick. (Note: you have just explained the ‘multiplier effect’!) Rather than enriching one person and then leaving town, money that circulates many times within the community enriches all.

Unfortunately, in our community we also have expenses. Once again ask participants to list their expenses. For each example, it must be decided whether the expense represents money flowing out of the community. If, for example, Mayuree buys vegetables from neighbour Pornpimon, then no money leaves the community. Stir the bucket. If, however, Mayuree buys a new 24-inch colour Sony, ask Mayuree to come forward and peel one of the pieces of tape off of the bucket. Water should rush out.

Once all of the holes have been uncovered, or participants have exhausted their list of expenses, ask participants how they can do a better job of ‘keeping their bucket full’. One suggestion will be to pour in more water (income generation). Ask participants how effective this will be if the number of holes and size of holes are continually getting bigger. The other suggestion, of course, will be to plug some of the holes. This can be accomplished in two ways; one, we can reduce our expenses, or, we can purchase local goods and services as substitutes for imported ones. This is an ideal lead-in to, for example, the second round of the community currency simulation.


Activity: Coupon Flow Example (Kud Chum)

(Refer to the following diagram. Note that diagram should be drawn sequentially as explained in the text below; presentation of the completed diagram creates confusion.)

Objective: To provide a concrete example of how community currency could begin to circulate between community members.

Preparation: The facilitator will need to familiarise herself with the example, and will require a whiteboard/flip chart and marker.

To begin: The facilitator will begin by drawing as large a circle as the whiteboard/flip chart will allow. In the middle, draw a stick family—label this ‘community members’. At the edge of the large circle, draw a building and label it ‘community currency bank’. Explain that those community members who understand the objectives of the CCS can join as members; this gives them the right to withdraw or deposit community currency notes. These notes can then be used to exchange goods and services amongst themselves. That easy.

The number of community members who are immediately convinced by the CCS concept will be quite small. How do we reach a larger share of the community in order to increase the diversity of goods and services available for exchange? Some kind of a catalyst or ‘wedge’ is required. In Kud Chum, plans are to use the cooperative rice mill. The facilitator should draw another building on the edge of the circle and label it ‘rice mill’.

Current rice mill policy is to pay a premium to local farmers who are members of the co-op when they bring their rice to sell. If the rice is chemical-free or organic, this premium is even higher. Instead of paying the premium in baht (the national currency), the rice mill will pay it in community currency. (Remember that the price paid for the rice by weight, the lion’s share of the payment, will continue to be paid in baht.) Where does the rice mill get the community currency? It withdraws it from its account at the CC Bank.

Farmers will be assured that, at the very least, they can use their community currency to purchase milled rice, rice husks and rice bran from the rice mill. The rice mill benefits from an improved cash flow; community members are receiving the same price as before and helping to initiate a valuable community project. The facilitator should draw double-headed arrows between the community members and the rice mill, and the rice mill and the CC Bank.

The challenge for CCS organisers is to create opportunities for the CC to circulate within the community. In Kud Chum, a weekly farmers’ market is planned where community members can exchange their agricultural products with each other using community currency. Draw a mango on the edge of the circle, and connect it to the community members using a double-headed arrow.

There is also a health centre in Kud Chum. Community members will be allowed to use community currency to pay for a part of the cost of herbal medicines. The health centre will then use the CC to pay for the raw materials from other community members. Draw a building with a cross on it at the edge of the circle and connect it to the community members with a double-headed arrow; label it ‘health centre’.

Co-operative retail stores can also be involved. Products that are made within the community can be sold to the co-op for CC; the co-op can then re-sell these products to other community members. Draw another building at the edge of the circle connected to the community members by a double-headed arrow and label it ‘co-op store’. Draw double-headed arrows from the co-op store to the health centre, the rice mill, the farmers’ market and another unit titled ‘small business’.

This is probably enough of a picture to get the idea across. It is possible to incorporate the local temple, a village school and labour circles in a similar fashion.


Potential Questions:

Do members of the CCS pay for their community currency in national currency?

No. Each member has the right to withdraw an amount of community currency up to a pre-determined, universally applied limit set by the CCS board. If they have withdrawn the maximum amount, they can not make a further withdrawal until they have earned enough CC to make a deposit in their account. Remember, there is no interest on either loans made to community members, or deposits placed in the CC Bank.

Can members exchange their community currency for national currency?

No. If this were allowed, those within the community who had more national currency than others could use this position to obtain more favourable ‘exchange rates’.

How do we avoid corruption in the system?

A record should be kept of the number of coupons printed. Each time coupons are withdrawn a record of disbursement should be made. The overall system must balance to ensure that no coupons are ‘disappearing’. These books are open to all community members to audit.

To avoid forgery, community currency will be printed professionally with coloured ink, and serialised. The cost of forging such notes will not be worth the goods that it would be possible to buy with them. After all, you can not buy a TV or a gold chain with community currency. Furthermore, in a small community, it will be very difficult to cover up sudden discrepancies in any one members’ CC savings.

Can we use community currency to purchase goods or services outside the community?

No. Community currency is strictly limited to the community of origin.

How will we pay for things such as medical or school fees?

Remember that we are not suggesting that we replace the national currency economy with a CC-only economy. The two currencies are used in parallel. Each individual must determine their national currency needs and make sure that they have enough to meet those needs. In the early stages of CCS start-up, it would be foolish for community members to forego a large part of their national currency income. The strength of the CCS is in allowing community members to mobilise resources and labour to fulfil local needs. By structurally encouraging community members to support local economic activities, more value is kept within the community. Over time, this will mean greater wealth and a reduction in national currency expenses.

Activity: ‘The Resource Flow Exercise’ or ‘The Coke Exercise’.

The purchase of a good from outside the community is compared to the purchase of a good from within the community. This activity is a more ‘analytical’ version of the simpler and shorter, ‘bucket’ exercise (see above).

Objective: ‘The Resource Flow Exercise’ is an activity that attempts to increase awareness of how and why money flows out of a community.


  • Flipcharts and markers or a whiteboard. (Overhead sheets also possible).
  • Number of participants between 15 and 30 people. Whith fewer or more participants, it would probably be more feasible to present ‘The Coke Exercise’ (see later).
  • The total exercise takes half an hour, or more, depending on interest and time allowed for discussion.
  • Facilitator who is aware of the issues related to Community Currency Systems (CCS), and who has well prepared the exercise.

Beginning: The facilitator will divide the participants into groups (ideally according to where they come from; village, community or region). The groups will be given the task to (hypothetically) purchase one good. This could be a durable, luxury, locally produced good, an input for production or a service (give example)). There are five questions the groups will have to answer (questions presented on a flipchart):

  1. What good or service did your group decide to purchase?
  2. Where did you buy this good (from whom?)
  3. How much does this good cost? (estimate)
  4. How much did it cost the person you bought it from? (estimate)
  5. Where is the product originally made?

Facilitators should make sure that not all groups choose the same good and that at least a locally produced good and a good produced externally, is included in the group examples; the facilitator can use these examples for the analyses later on.

Presentation of examples: 10 –15 minutes are allowed for the different groups to present their examples, by way of a representative. The flipcharts used for this purpose, should be put somewhere visible for future use. After the various group presentations the facilitator presents the COKE example.

COKE (Diagram 1):

The different steps in the ‘COKE’ buying process and its effects on money and resource flows are given underneath. The numbers are hypothetical; no official data have been used in the calculations. As we have used this exercise mainly in Thailand and Indonesia, prices are given in Thai Baht with the equivalents of Indonesian Rupiah in brackets. (Note: the facilitator does not need to prepare the flipcharts; she should draw them while she presents.)

  1. On a flipchart, the facilitator will begin by drawing as large a circle as the whiteboard/flip chart will allow. The circle represents a community. In this community we imagine a consumer and a merchant.
  2. Consumer buys can of coke from a retailer or a merchant who lives in the community; price: 12 Baht (3000 Rp.). Arrows (and simple clear pictures) between the consumer and merchant are drawn to show the flow of money and the can of COKE.
  3. The retailer buys the coke from the company, Hadtip (Indofood); price/costs: 10 Baht (2500 Rp.). These costs are leaving the community; the arrows representing this flow of money plus the can of coke (which enters the community) are crossing the circle of the community. A hypothetical breakdown of these costs is presented (if not enough space) on another flipchart:
  1. Direct costs (variable costs): raw materials (sugar, water, artificial flavour), packaging material. Costs are 3 baht (800 Rp.). Of these, it is assumed that packaging material (aluminium) has to be imported: 1 baht (200 Rp.) and the remaining 2 baht (600 Rp.) are spent within Thailand.
  2. Indirect costs (fixed costs): transportation, marketing, inventory, administration, labour. It is assumed that these costs are all spent at Thai (Indonesian) companies. Costs: 6 baht (1500 Rp.).
  3. Profits: 1 baht (200 Rp.). Part of these profits go back to Atlanta GA, in the US to the mother company.

(Note: economic and business terms, like direct and fixed costs are difficult to understand. The list of costs, involved in producing a can of coke, is however very straightforward. Participants can make suggestions to costs of course.

  1. The retailer in the community has a (gross) margin of 2 baht (500 Rp.). This of course is not just profits; there are also costs involved.
  1. Overhead costs. The retailer has a shop and has to face electricity and rent costs. Costs: 0.5 baht (125 Rp.). The electricity is spent to a company outside the community and it is also assumed that the owner of the shop, from whom the retailer rents the shop, spends his income outside the community.
  2. Labour. The person who works in the shop (labourer) will spend her wage of 0.5 baht (125 Rp.), per can of coke, within the community.
  3. Profit of 1 baht (250 Rp.). Maybe this is spent within the community but it could be spent outside (probably more likely).

Summarising: We are interested specifically in how much of the original 12 baht (3000 Rp.) remains within the community. Out of curiosity we will also look into how much remains within Thailand after the purchase is made.

After purchase of the can of COKE there remains:

  • Within the community: at the most 1.5 baht (375 Rp.); labour at retailer’s shop, maybe profit of retailer.
  • Still within Thailand (Indonesia), but left the community: 10.5 baht (2625 Rp.); most raw materials, transport, labour, marketing costs.
  • Left Thailand (Indonesia): 2 baht (400 Rp.); import of aluminium and profit.

Of the original 12 baht (3000 Rp.) spent on the can of COKE, at the most only 1.5 baht (375 Rp.) stays within the community. The other 10.5 baht has left. With the money leaving the community, purchasing power has also left the community.

(Note: at this point the facilitator could take the opportunity to reflect on the different examples from the groups, presented earlier on. Some will have chosen very expensive consumer luxury goods (like a car). This will show more money (purchasing power leaving the community.

Interest rates: Imagine the consumer has no money. How does the consumer get the can of coke? If you do not have money you are forced to borrow money; from the bank. So, in our case the consumer loans the 12 baht (3000 Rp.) from a bank, located outside the community. An arrow is drawn from the bank to the consumer, crossing the community border line. Admitted, 12 baht is perhaps a strange amount to loan, and in reality this will of course not happen. (Facilitators might want to refer to a more realistic example, preferably taken from the group examples).

The interest rate we have used in our examples in Thailand and Indonesia is 10 %. This will result in an extra 1.2 baht (300 Rp.) leaving the community as interest payments (10 % of 12 baht (3000 Rp.). An other arrow is drawn from the consumer to the bank, with 13.2 baht leaving the community.

Summarising again:

Before the loan was made, we saw that less than 1.5 baht (375 Rp.) remained within the community, resulting from buying a can of coke. With interest payments also leaving the community we are now left with, at the most 0.3 baht (75 Rp.), of the original 12 baht (3000 Rp.) spent.

(Note: with not too much imagination, one can see that with interest rates only a little higher, the total sum of money leaving the community as the result of buying a can of coke, will actually be more than the value of the resource coming in (the can of coke)). The facilitator could opt to choose a few more examples from the various groups.

Roselle fruitjuice (Diagram 2):

So what happens with the resource and money flows, when instead of a can of coke a fruitjuice is bought which is produced using as many local resources as possible. In Thailand we often use the example of Roselle which is grown in many communities, is hence wellknown and popular. Nevertheless the facilitator could ask the participants for examples and use that instead.


  • The facilitator draws a similar circle, once again representing the community. Within the circle the same consumer is drawn and now also a producer.
  • The consumer buys local fruitjuice directly from the producer; price: 12 baht (3000 Rp.).
  • Facilitator asks participants for inputs on how the fruitjuice is made and hence what costs are involved.
  • Are these costs born locally or do inputs have to come from external sources? The task of the facilitator is to pass on ideas, if necessary; for example the use of compost or chemical fertiliser for the production of Roselle. The facilitator stresses on keeping all required inputs as local as possible. Most resources can be found locally; fruit, labour, compost (to grow the roselle), water, transport (no need for petrol), natural sugar. The arrows signifying the costs and inputs remain within the circle; purchasing power stays within the community.
  • Only the bottle needs to come from the external market, as it is not very feasible that community members will produce that themselves; price: 2 baht (500 Rp.). Arrows related to this cost crosses the community circle.

Summarising: Of the original 12 baht (3000 Rp.) spent, 10 baht (2500 Rp.) stays within the community. This serves as purchasing power for other members of the community. We can see that these bahts circulate within the community more often than if we buy from external sources.

Interest rates or Community Currency.

Nevertheless, the consumer is still dependent on the money market and needs to go to the bank to get 12 baht (3000 Rp.) needed for the purchase and face a loss equivalent to the interest rate. An additional 1.2 baht (300 Rp.) would still leave the community under the given circumstance.

If this community were to chose a community currency as their exchange medium, community members would have access to interest-free money, created by themselves. It would be able to cut off links with the outside making communities more independent.

Potential Discussion points.

  • This exercise shows the advantage of local production or import substitution. The benefits of the import substitution are extended beyond the quantified example of the difference between the 10 baht (2500 Rp.) and the 0.3 baht (75 Rp.). Per unit of community money, more wealth can be created, as community money stays and circulates within the community and hence, produces a muliplier effect. Even if a community does not choose to use a CCS, producing locally, causes money to stay longer in the community before it leaves. This creates value added and therefore real wealth.
  • The more goods one buys from the external market as compared to the local market the more one has to rely on exports to keep purchasing power within the community or to balance the money flows. How desirable is it to depend on the export market, with its unpredictable price fluctuations?
  • The multiplier effect is in economic literature most often used to point out the effect, 1 unit of foreign currency earned by exports, has on economic activity on the local level; it is said it triggers off other economic activities. This may be true, but how much can one rely on the export market? Instead of money earned through exports, in our analyses we have used the multiplier effect to point out, how capital, already available, can trigger off local economic activities.
  • Consumer choice: some participants have mentioned that the quality of the local fruitdrink is not as good as the can of coke! A very real and genuine concern. ‘The coke exercise’ has often led to discussions between community members on the management of the community resources. A desire for goods from the external market implies that a sufficient export base needs to be created. Is this possible and is this export base based on sustainable production methods? The more dependent one is on imports, the more exports are needed. This can lead to the exploitation of natural resources, to increased debts and more pressures on labour.
  • Facilitators (CCS practioners) can develop their own ‘COKE example’, by using data from research. They can also chose to use a good which is more adapted to the ‘local’ situation; maybe ‘coke’ is not known by the participants, ha ha?
Diagram 1. The effects on money and resource flows of a purchase of a can of coke.

Diagram 2. Purchasing power remains within the community when purchasing local goods. buying a can of Coke.