Fiscal localism

Fiscal localism comprises institutions of localized monetary exchange. Sometimes considered a backlash against global capitalism or economic globalization, fiscal localism affords voluntary, market structures that help communities trade more efficiently within their communities and regions.

"Buy local" or local purchasing is the most visible face of fiscal localism. There are more complex institutions (both new and well established) that contribute to a community's ability to flourish. Institutions like credit unions, CDFI's (Community Development Financial Institutions), and local currency or complementary currency all can contribute to making communities more resilient and wealthy.

Local currency has been in the news most, with journalists citing the Berkshares in Massachusetts, and the Ithaca Hours in Ithaca, New York. Beyond these salient examples, there are thousands of local currencies all over the world.

Fiscal localism is rooted in the concept of decentralization. The creation and maintenance of a regional economy is supported by communities who believe that their community is economically better off sustaining itself rather than being part of and relying upon a larger economy, such as a national economy or the global economy. This is a movement against the increasing globalization of all economies around the world. The main tenets of fiscal localism include buying products that are made locally and using a currency that is unique to that local economy. This allows a community to grow at a controllable and sustainable rate by supporting farmers, shopkeepers, and service providers of a community. Consumers in these communities are more informed about how their foods and products are grown and made. Using a unique form of currency allows a community to determine its economic growth and health more accurately than using metrics of a national economy to gauge economic health. Taxation in these communities is emphasized at the local level and low importance is put on local taxes. These communities want to separate themselves from the larger national economy so they must rely on revenue generated from local taxation. Banking is also preferred to be done on a local level. Communities that follow fiscal localism would rather have one local bank than be customers of a massive bank that does business across the country as well as internationally.

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Wikipedia