Abstract :
Through a critical review of economic base theory, this paper argues that the ability to prevent income leaking out of an area is as important to rural development as the capacity to generate external income. The problem at present, however, is that few effective policy instruments exist to thwart such seepage. Here, therefore, an innovative approach to facilitate local purchasing amongst rural dwellers is evaluated: Local Exchange and Trading Systems (LETS). Reporting empirical evidence from both a national survey of United Kingdom LETS and a membership survey of Totnes LETS in Devon, this paper finds that LETS are rapidly growing in rural areas and are not only encouraging local purchasing but are also rebuilding local social networks and enabling some of those marginalised from employment to gain access to work and credit. As such, they amalgamate both economic and community development. To further improve their effectiveness, several barriers to their development are identified and solutions offered to how these may be overcome.
