Sardex, from Parallel Currency to Institution. a Micro-Macro Case Study

Friday, 3 July 2015: 4:00 PM-5:30 PM
TW2.2.03 (Tower Two)
Laura Sartori, University of Bologna, Bologna, Italy
Paolo Dini, LSE, London, United Kingdom
Sardex is a mutual credit system founded in Sardinia in 2009 as a parallel currency aiming at helping the local economy. After a period of incubation where the features of the current international monetary regime were investigated along with their effects on local economies and societies, the founding team came up with the idea of creating a complementary currency network. This seemed to be the only feasible alternative to the usual available economic and financial operations in response to (recurring) economic crises. Looking closely at the Swiss experience with the WIR (founded in 1934), the core team created a complementary currency network, which at the time was not something people in Sardinia had ever heard of, aiming at balancing economic benefits with social values. It was a cultural project aiming to innovate the economic and financial system.

The remarkable growth of Sardex in the past 5 years calls for an in-depth analysis of its principles of operation and its socio-economic context. As a start-up it is based on specific design and operational principles that sustained its development and differentiated it from other examples of alternative currency or exchange systems, such as LETS (Local Economic Trading system) or Time Banks. Its desire for contrasting the economic dire straits of the local economy (the current crisis deeply worsened traditionally non-brilliant performances) resulted in a B2B circuit of exchange where social values met economic benefits. 

Many members were sceptical at first, but after entering the network discovered how economic exchange and individual self-interest can be imbued with social meaning, reaching a higher overall collective well-being. Sardinians – known as conservative and slow in adopting novelties – rapidly discovered how mutual trust can be a lubricant for transactions and can sustain a rich endeavour for commerce that soon became familiar and domestic. Sardex has become more than just an economic space: it is a medium of exchange, a unit of account, and a parallel currency that serves to differentiate a range of social meanings (Zelizer 1995). Sardex has now entered family budgets’ strategies and it is allocated to specific purposes (while the Euro serves others). It is also perceived as a closed community, resembling what Zelizer (2005) calls a “Circuit”, where exchange is inevitably conducted in a social and cultural environment. The network also supplies social capital for development (Trigilia 2001).

A second factor that contributed to this success story is the role of “mediator” that the founding team came to play. By being a mediator and having chosen a leading role in the network, can be open to interaction with regulatory or political powers coming from the top. By being a service company, doesn’t suffer from decreasing enthusiasm/voluntary action by participants and other problems (Gomez 2013), usually at the root of the failure of other networks such as LETS or Time Banks.

Sardex seems to have found the right compromise between economic benefits and social values that characterizes the ability of a local currency not only to emerge and survive, but also to compete and scale up. This is why other regions – such as Emilia-Romagna, Marche and Puglia – are looking at Sardex as an example to imitate and adapt to their local environments. In this respect, Sardex seems to be creating a ‘laboratory for institutional learning’ (Dini e Kioupkiolis 2014) where new socio-economic habits are experimented. Sardex is a novel economic space (mostly) equivalent to a proper market designed – among other things – to meet firms’ need for trading in a low-trust socio-economic environment and for creating a self-sustaining system.

In this line, if we think via the ‘market as politics’ metaphor, it is possible to imagine market institutions as ‘a cultural project in several ways’ (Fligstein 1996, 657), where actors interact through economic and social values combined with specific political cultures. We argue that Sardex is configurable as a laboratory where institutions arise, and where arrangements and societal solutions to problems (such as property rights, governance structures, and rules of exchange) are solved through experimentation. Sardex can be seen as a laboratory for institutions because it emerged as a social structure through a cultural-political project; it now acts as an independent and legitimate actor mediating between firms organized through a network. As an institution, it allows for its distinctiveness to arise from a set of shared meanings and cognitive structures.

The analysis relies on in-depth interviews of circuit members and benefits from the reflexive point of view of one of its founders. Interviewing the members made clear what the main motivations to enter and to live the network are, and what it represents to them and to their economic activity. Talking to the founding team made clear how they realized their idea, how they nurtured it, and how they watched it grow through the collaboration with local institutions. Over the next few months (March-May 2015) we have planned to interview founders from other Italian regions (Emilia-Romagna, Marche, Puglia) that want to replicate the Sardinian model. Thus, we will be able to compare different socio-economic contexts where other actors desire to innovate in order to consider alternative paths struggling among specific obstacles and motivations.


Dini, P and Kioupkiolis, A (2014). Community Currencies as Laboratories of Institutional Learning: Emergence of Governance through the Mediation of Social Value, Inaugural WINIR Conference, Greenwich, London, 11-14 September.

Fligstein, N (1996). Markets as Politics: A Political-Cultural Approach to Market Institutions, American Sociological Review, Vol 61: 656-73.

Gomez, G (2013). Balancing Growth and Solidarity in the Argentine Community Currency Systems (Trueque), paper prepared for the UNRISD Conference Potential and Limits of Social and Solidarity Economy, 6–8 May 2013, Geneva, Switzerland

Trigilia, C (2001). Social capital and local development, European Journal of Social Theory, Vol 4, N 4.

Zelizer, V (1995). The Social Meaning Of Money: Pin Money, Paychecks, Poor Relief and Other Currencies, Basic Books.

Zelizer, V (2005). Circuits in Economic Life, Working Paper, University of Milan,