Universal Basic Vouchers

Typology

Katharina Bohnenberger:

The second class of welfare benefits is universal basic vouchers. Vouchers have not been examined by sustainable welfare scientists, although even some basic income literature suggests: “Vouchers should be taken more seriously, as a middle road between in-kind and cash transfers . . . Indeed, one can think of cash as being simply a voucher, one with few constraints on fungibility” [43]. In practice, vouchers have been implemented by the private and the public sector in very different forms, for example as housing vouchers, service vouchers, luncheon vouchers, gift vouchers, employment vouchers, training vouchers, sports vouchers, food vouchers, etc. [64].

Education vouchers were already proposed by Adam Smith in the Wealth of Nations (at a time when schooling was not yet universal) but also by Milton Friedman [96] (at a time when schooling had been universal for quite a while). The latter is also the reason why vouchers have had—at least among left-wing groups—a bad connotation as an instrument for welfare state retrenchment and privatization [64]. However, past use tells little about potential use. Voucher proposals are to be evaluated according to the criteria of sustainable welfare. The results depend on the considered time and case, just as Adam Smith and Milton Friedman’s proposals can be seen as even opposing strategies—in the light of their times.

Vouchers also evoke bad connotations since they have been implemented in the global north for rationing during war and post-war times and are particularly in the global south still used today in emergency situations, e.g., as food vouchers during hunger crisis [97].

Although vouchers have frequently been implemented for unsustainable purposes (e.g., boosting growth [98]), this must not veil today’s applicability [99]. Conventional research on vouchers has pointed out that the purpose of the voucher (e.g., social cohesion, equality of opportunity) matters for its design [100]. This suggests that, in some way or another, the following four types of vouchers could also contribute to sustainable welfare.

Shift Vouchers

Katharina Bohnenberger:

Shift vouchers are discounts provided to promote environmental behavior and consumption patterns. They differ from UBI in that they provide non-cash benefits and share with the transition income the focus on behavior change. Contrary to other voucher proposals (Sections 3.2.2–3.2.4) and similar to income benefits, the shift voucher can be denominated in the national currency, hence establishing a subsidy for a certain kind of good or service. They might also provide non-monetary benefits like faster or unbureaucratic access. Importantly, the good or service would also otherwise be accessible, and the recipient group is not limited to poorer households. On the contrary, as wealthier households tend to have larger environmental footprints and behavior, change is likely to have the greatest impact when targeted at their “luxury emissions” compared to “subsistence emissions” [101]. Still, also many income-poor households in the global north consume more resources than would be compatible with ecological sustainability (for Finland: [102]) Nonetheless, one could also use shift vouchers to overcome lock-in emissions, which prohibit poorer households to move towards environmental friendlier products and services. Such measures are even accepted by advocates of universal basic income [63].

Also, in the literature on sustainable welfare, the idea behind shift vouchers enjoys widespread acceptance: Koch states that “ecological investment, for example into retrofitting houses, only has a chance of being perceived as legitimate, if it is accompanied by countervailing social policies that, for example, assist homeowners in paying for ecologically useful measures” [71]. Shift vouchers operate by two channels: Like subsidies, they change the (monetary) incentive structures. In addition, when distributed to recipients, vouchers also provide (new) information on the availability or price of a certain kind of good or service, lowering information barriers to take up a new product or service. This can speed-up transformation processes. There exists multiple empirical evidence that the uptake of a service can even be increased through the distribution of a voucher when that service would also otherwise be accessible and one can assume knowledge of the service by the recipients (e.g., [103]). Particularly when the benefits are in non-monetary form, e.g., additional free time from work in the form of an “ecological leave” for non-flying and other environmentally friendly behavior, they could prove particularly effective in changing the behavior of wealthier households, since price change have lower incentives for richer households [104]. A social justice perspective emphasizes that behavior change of wealthier households should be targeted first [63].

Next to that, also more conventional vouchers, like sports vouchers [99] or fruit and vegetable vouchers [105], can be seen as shift vouchers, when they replace unsustainable consumption (e.g., meat consumption) or energy-consuming time-use patterns (e.g., car driving). Further ideas for shift vouchers, that might not come to one’s mind when thinking about ecological goals but that could still profoundly change lifestyles, are shift vouchers for repairing utensils or shift vouchers for cultural events like concert which have a particularly low ecological impact per time-use. They can help to push for more sustainable production by shifting the consumption of goods to services. Taking into account that services also have an environmental impact [48], shift vouchers can nonetheless contribute to a more resource-light but work-intensive economy. Similarly, a shift towards a less ‘labor’ productive [67] and more amateur economy (“Cinderella economy” [106]) could take place, increasing life satisfaction and happiness [107] and supporting essential but undervalued activities such as care work [67]. A positive side benefit could be lower unemployment.

Ultimately, shift vouchers represent a form of “nudging” for sustainable lifestyles [108] and are hence part of the ethical debate on nudging and liberty [109,110]. Except for the case when they help to overcome lock-in emissions, no poverty prevention can be assigned to them. For the endeavors of sustainable welfare, shift vouchers should particularly be applied to crowd-out luxury emissions by more sustainable consumption patterns and address the underconsumption of a good or service with positive externalities, like locally produced organic food.

Quasi-Currency Vouchers

Quasi-currency vouchers are entitlements allocated to recipients to restrict and organize usage of a scare good. Contrary to shift vouchers, they are not denominated in national currencies but represent a new currency on their own. Quasi-currency vouchers do not seek to support the use of a certain good or service like other vouchers do, but they distribute the use of resources and sinks. Particularly for societies with high economic inequality, this can be a useful tool for managing the distribution of scarce but necessary resources. The reason for that is explained by the Weitzman paradox [104]. It states that prices are less effective in delivering goods and services to its optimal use with increasing inequality. This is the case because the incentives of prices work relative to the disposable income of a person. The relative costs of a specific price for a ton of carbon is weaker for high earners than for low earners. Both from the perspective of social inclusion but also effective environmental policy, this is problematic: Due to their higher financial capacities, high-income groups tend to have more options for behavior change and since they tend to have a larger share in resource use and higher greenhouse gas emissions, they also have a larger reduction potential. Hence, it would be more effective to start reducing the environmental impact of wealthier households. Yet, with a carbon price (instead of rationing), they literally can buy themselves off from the steering effect of a carbon price through their higher income. Hence, economists have proposed alternative systems, which set caps on emissions or resource use and distribute the allowances. The first ideas originated in the field from the concept of “contraction-and-convergence” and were further developed into “personal carbon allowances” and similar proposals. The idea of personal carbon allowances and absolute caps for energy, resources, and emissions have been emphasized strongly in post-growth research [3,71,111–120]. In order to ensure the socially acceptable design of these measures, the key question is how the entitlements are distributed and whether they can be traded.

A convergence of per-capita resource use and emissions can contribute to carbon justice and consumption corridors. Non-tradable allowances constitute a form of rationing that has been present in historical times of resource crises like food shortage war, or post-war times [121]. Given the current debate about climate emergency, the idea of rationing carbon might gain new relevance. If exchangeability of carbon allowances into other currencies is constrained, quasi-currency vouchers become similar to special-purpose money, an idea that is advocated by many post-growth scholars (e.g., [35,85,122]). The advantage of goods and services being only accessible via special-purpose money is the lower commensurability [35], which describes the fact that particularly ecological factors (like water, energy, nutrients) are not—or only to a limited level—substitutable by each other. Translating non-commensurability into the design of the currency forms clearer expectations about individual sustainable consumption levels (e.g., CO2-emission per capita). General-purpose money blurs the non-commensurability and hence veils real-world scarcities of resources, energy, and sinks. In addition, general-purpose currencies are today highly unequally distributed. Quasi-currencies, on the other hand, establish parallel spheres with own and more equal distribution patterns. Hence, it raises the likelihood that income-poorer households can also access necessary goods and prevents wealthier households from overconsuming at the expense of poorer households. Unluckily, this might also legitimate the consumption of these harmful goods to the level of allocated vouchers.

Similarly to wealth and income caps [40], quasi-currency vouchers contribute to equality; yet indirectly, by limiting the scope in which income inequality matters. Quasi-currency vouchers hence imply a power-raise for low-income households. This constitutes an advantage in terms of the goals of sustainable welfare outlined in the first section of this paper, but it also lowers its political feasibility.

An equal-per-capita account will, unless full tradability is guaranteed, be hardly implemented because it would entail sudden and serious lifestyle changes of the wealthier part of the world. Furthermore, such reforms are rather complex to implement [114] and require strong enforcement. Given this, the concept of non-tradable quasi-currency vouchers is likely to be diluted by existing power structures, as has for example been the case with the European emission trading scheme by changing the initial distribution of certificates and ambition levels. Furthermore, a successfully implemented rationing system constitutes a strong source of power. As Kallis and Martinez-Alier put it: “Who controls resources (and sinks), controls this society. Therefore at least in principle, there is a strong incentive for a group to control and mold a cap policy to favor its interests and increase its power over the rest of the population” [112]. Unless its institution is democratically controlled, these systems risk becoming a source of power misuse. Two options exist to meet these risks, one is to start with high tradability and lower the share of allowances that can be traded over time. Another approach is to distribute only a part of the non-tradable entitlement equally per person while the rest is auctioned. Beyond climate policy, quasi-currency vouchers can also be applied in other spheres, which entail scarce but necessary goods or services. In case of housing shortage, housing vouchers could be distributed to every citizen, which he or she can use to pay part of the rent for a flat. Homeowners on the other hand have to pay their property tax in this quasi-currency voucher. When they occupy their property themselves, they can use their own vouchers to pay the tax; when they rent their flat, one part of the rent can be the voucher.

In an area of average housing availability of 60 m2/person, citizens could, for example, receive a voucher for 30 m2 per person and landlords are required to pay 0.5 vouchers for every m2 they own. Thus, property owners would have a strong incentive to make sure their flats are not under-occupied because this would cause problems when paying the tax. At the same time, this system would still allow for some variation of the individual housing space. In opposition to traditional housing vouchers, which are given to the poor and which tend to foster spatial socio-economic segregation [123], these housing voucher support social mixtures because when landlords rent a luxury apartment with high space consumption per person, they will seek a denser occupation in the remaining flats. Households that have, usually because of a smaller budget, lower housing demand will be favored. As a consequence, the need (expressed in vouchers) not the demand (expressed in monetary ability/willingness to pay) for housing receives more attention in housing allocation. Potential environmental co-benefits would be a reduced land, energy, and resource consumption.

Needs Vouchers

Similar benefits can be attributed to needs vouchers. As the name suggests, needs vouchers are given to people negatively affected by current or upcoming policies with the goal of ensuring their needs are sufficiently met. As quasi-currency vouchers, they are a means to tackle poverty (e.g., energy poverty), but they do so without questioning the upper tail of the income and wealth distribution. Neither do they strive to transform consumption patterns in a sustainable way, even when, in some cases, the benefit might take the form of a particularly environmentally friendly good or service. The general idea of needs vouchers originates from the observation that many transformative policies, like environmental taxes, bear negative consequences for poor households. As an alternative to redistributing the gained taxes in all-purpose money (e.g., transition income) or construct infrastructures that provide alternative needs-satisfiers (Section 3.3), the benefit could be issued in a voucher to needy households. Needs vouchers differ from shift vouchers on a gradual scale: A need voucher that is given to everyone (e.g., certain amount of free local transport) and provides a benefit that will likely crowd out an unsustainable need-satisfier could also be described as a shift voucher. Yet in the absence of other options, needs vouchers might also be provided for non-sustainable need-satisfier, like vouchers for low-income households with a certain amount of free petroleum gas. This could lower negative social consequences and increase acceptance for environmental policies (e.g., increased electricity prices). Unlike shift vouchers, the goal of needs vouchers is not to overcome lock-in emissions, but to compensate for lock-in emissions or other sources of poverty.

Needs vouchers have been proposed in environmental research from several perspectives: As compensation to avoid regressive effects of environmental taxes [67] and in ecological social work as vouchers for electricity and food to support vulnerable people in case of climate-related hazards [124]. Secondly, need vouchers are proposed as eco-social policy. One example is the idea of the “Freedom Pass” [36] issued to every UK citizen to provide access to free local public transport services. Another example are entitlements for information service that cover the cost of “basic phone, Internet and the BBC TV license fee” [36]. More specific proposals include vouchers to buy exclusively fruits and vegetables [105] or vouchers for locally produced sustainable food [85]. Yet, if vouchers provide free (and not reduced) access, overconsumption beyond the needed level of that good might be the consequence. Hence, for ecologically sensitive goods, free vouchers should only be provided for the absolute minimum. Obviously, this would lead to some trade-off between ecological incentives and meeting needs.

Issuing benefits in vouchers and not in money has also been debated as an alternative to basic income schemes (e.g., [63]). Murphy describes this as a “near Basic Income Guarantee (BIG)”: “A near BIG program is income-like but restricted in the range of spending. I am thinking here of credits or vouchers, which could be spent only on whatever is judged appropriate by the issuing authority. These could include childcare, education, food, health care, or housing. If the provision renders all recipients capable of participating in an important market, it merits the title of “near BIG”. A title that Sustainability 2020, 12, 596 17 of 30 could be applied to all the areas just listed might be hard to distinguish in its effects from a full-fledged BIG” [125].

Although a voucher that can be exchanged for a range of services gets closer to a monetary transfer [15], basic income advocates have been criticizing voucher schemes as paternalistic and an “undermination of a main premise of a UBI or BIG—a commitment to personal freedom of recipients” [63]. In addition, vouchers that are only distributed to needy households could lead to stigmatization. The latter objection could be resolved by issuing vouchers to everyone (independent from the need) and could also have the side-benefit that it signals maximum sustainable consumption levels. The former objection with reference to freedom deserves more attention. The argument is particularly valid if individuals desire a certain good to a differing degree or in other qualities. Yet, two defending arguments can be put forward.

Firstly, need vouchers might not fully replace basic income. In this case, their task would not be to guarantee free consumer choice but to ensure needs are met. Actually, vouchers might be much better suitable to ensure this than money, since the actual value of a cash benefit depends on the temporal and spatial fluctuation of market prices, while needs manifest themselves in real-world need satisfier (like food, water, housing space, etc.). Vouchers denominated in amounts of these goods and services establish an insurance against variation of price changes and hence lower the probability of benefits falling below needs.

A second defending argument to the paternalism objection is put forward against a narrow understanding of autonomy. Heath and Panitch argue that cash is wrongly conceived as “neutral”, by which they mean its value is equal for everyone. Yet, many people prefer to be given in-kind benefits because they use these as self-binding mechanisms. “Most of us know from everyday experience that not everyone is equally good at handling cash” [43]. Similarly, a preference for non-cash benefits might, for example, exist because people’s preferences are instable over time (e.g., in the morning: Take the car to drive to work; at the end of the week: Have done more sports e.g., through cycling to work). Also, avoiding negotiation processes about the use of money with other household members could establish a reason that individuals prefer vouchers over cash. Hence, Heath and Panitch conclude, providing benefits in non-cash might indeed be an exert of autonomy, not a limitation to it [43]. Consequently, from a sustainable welfare perspective, there is a range of applications for needs vouchers. Particularly in societies with large economic inequality, needs vouchers can ensure everyone can access certain goods and services to a certain degree. Examples are resource-intensive but necessary goods like electricity, water, internet, or public transport. They could be provided as vouchers free of charge to a limited amount, although they should only be used as a solution of last resort. Preferable are vouchers that seek to avoid unsustainable lifestyle e.g., like vouchers for solar heating or energy-efficient lighting systems instead of voucher for grid electricity.

Commons-Innovations Vouchers

Katharina Bohnenberger:

"The fourth type of vouchers, commons-innovation vouchers, are issued to enable the emergence of transformative innovations. Commons-innovation vouchers establish the demand for a certain good, but contrary to the shift voucher the goal is creating new (“innovative”) institutions that serve communities and society (“commons”). Hence, the voucher is issued before the institution is (fully) developed or expanded and can be useful for supporting the emergence of eco-social innovations [126]. Examples include vouchers for local transport in regions where there is not yet sufficient demand for local transport to be operating [127] and vouchers for locally produced organic food [63,85] in regions where the demand for this is still too low for farmers to switch towards organic agriculture. The strategy has been implemented with childcare vouchers in areas where not enough public childcare is (yet) available and non-public solutions are needed to timely meet the demand (e.g., through daycare staff).

Another example is collaboration vouchers, which are proposed as “annual grants given to each citizen, able to be spent on the membership fees of any registered collaboration . . . Unions may become registered collaborations, able to receive vouchers, and hence represent not only salaried employees but also the precariat and unemployed” [20]. It could help provide entitlements for political representation and establish civil society organizations, which are seen as crucial for transformation.

Also, some timebanking institutions have issued vouchers for new members to be able to receive services before having to provide services. Timebanking is analyzed as particularly helpful for expanding social networks and suitable for reaching socially excluded citizens [35]. Timebanks also possess the advantage that every hour of work counts equally and thereby rule out income inequality resulting from different hourly wages. For these reasons, timebanking is appreciated as a highly desirable institution for sustainable welfare [113,128]. Particularly digital timebanks operated by platform cooperatives can constitute an alternative to an exploitative crowd working concept of platform capitalism. Vouchers for free access to these services of platforms cooperative an establish network effects and thus facilitate the necessary participation in these platforms [129].

An even more encompassing example of commons-innovation vouchers are complementary local currencies, which are widely proposed by post-growth research for promoting relocalization (e.g., [3,71,114,130], for an overview see: [35]). Complementary local currencies give access exclusively to locally produced goods, although these goods and services are also accessible by all-purpose-money. Some scholars propose to issue basic income in a complementary currency (“which is exactly what a voucher is” [63]). Two proposals stand out for their elaborateness: Douthwaite’s proposals of regional energy bonds, which pay the bearer the price of a specific number of kWh on the day they mature [113]. “Once the energy plant starts supplying power its managing committee could as well turn it into a sort of bank, issuing energy ‘notes’ that the locals could use for buying and selling goods, secured in the knowledge that the note has real value as it could always be used to pay energy bills” [114]. The second proposal is Hornborg’s concept of a spatially encoded complementary currency (CC) that can “only be used to purchase goods and services that are produced within a given geographical radius of the point of purchase. This radius can be defined in terms of kilometers of transport, and it can vary between different nations and regions depending on circumstances” [122]. He states multiple possibilities of scaling up the currency: “distribution would be to provide each citizen with a plastic card which is electronically charged each month with the sum of CC allotted to him or her . . . states can choose to make a proportion of their social security payments (pensions, unemployment insurance, family allowance, etc.) in the form of CC. As between a third and half of some nations’ annual budgets are committed to social security, this represents a significant option for financing the reform, requiring no corresponding tax levies” [122].

What is crucial about complementary currencies and other commons-innovation vouchers, is how the relationship between the issuer and the provider is structured. The recipients’ needs are not at the center of attention of commons-innovation vouchers but the establishment of new institutions. Yet, if the use of vouchers is voluntary and the state is not demanding and not even allowing the providers to pay the tax in the complementary currencies, the financing structure stands on shaky ground. Instead, if the state demands issuers’ tax payment in these currencies, it would become a quasi-currency voucher. In this case, commons-innovation vouchers can provide a financing framework for the provision of a certain good or service.

The realization of the benefits of commons-innovation vouchers relies on non-state actors, like companies, cooperatives, or civil society engagement. On the one hand, this demands quality control by the state and includes risk for the quality of the good or service. Hence, the application of commons-innovation vouchers is easier when quality standards are easy to assess (e.g., quantity of km of local public travel) or the quality of the goods or service is already monitored by another institution (e.g., organic food certification). An even larger limitation is that the desired innovation is not taking place. For example, in regions with no skilled labor force, no entrepreneurs with suitable business ideas might be present to create a functioning business model; or when the goods and services are provided by a voluntary organization, provision might depend on the availability of volunteers. Because of this unreliability, commons-innovation vouchers should not be used to replace other successful welfare benefits or be applied for essential systems like emergency healthcare.

On the other hand, the provision of welfare benefits by private actors has three advantages. Firstly, it can spread distribution systems to non-state sectors, like vouchers for local food baskets which influence the (private) food market. Secondly, commons-innovation vouchers can be used for finding solutions for challenges when no best-practice is yet available. They can also implement institutions that cannot or only ineffectively be provided by the state to bridge times when the state is not fast enough in establishing the welfare benefit. Thirdly, non-state actors can also issue commons-innovation vouchers and create transformative business models. For example, housing cooperatives could issue rent contracts for a certain amount of square meters per person of the household (not for a fixed flat). When household size changes (e.g., new children are born or adolescence move out), households are guaranteed to be able to swap to flats of suitable size. This can have social benefits (e.g., enough housing space for everyone) and ecological benefits (e.g., no oversized flats) at the same time. In comparison to monetary benefits, commons-innovation vouchers have the advantage that they entail signaling. They advise certain acknowledged minimum consumption levels e.g., for fruits and vegetables or for sports activities and can raise the consumption for under-consumed goods (e.g., bike-sharing infrastructure, night trains, community space). They might also signal certain points in time when people collectively switch their behavior. Local bus services, for example, need a certain minimum user intensity to be economically feasible. Even when this user intensity could theoretically be feasible because sufficiently many people would be willing to use the bus, in practice a negative spiral of low participation, worse quality, lower participation, etc., often lets these institutions erode. The introduction of commons-innovation vouchers for free local service could provide a salient point in time when sufficiently many citizens decide to try a new service or even organize a community bus themselves and thereby let a sufficiently good service emerge which can persist.

In summary, commons-innovation vouchers support the emergence of community-based institutions, cooperatives, and common ownership or the consolidation of grass-root initiatives, which often have difficulties for sustaining them [71]. Particularly, complementary currencies can re-localize economic activity [114] and contribute to community building [35]." (https://www.mdpi.com/2071-1050/12/2/596/pdf)