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The Buckaroo and the Demand for Money
CNBC.com | February 08, 2012 | 05:06 PM EST

Over a decade ago, the University of Missouri-Kansas City began to implement a community service requirement with an interesting, market-oriented twist. Instead of directly requiring students to work a certain number of hours in approved community service projects, UMKC imposed a system of payments and taxes designed to elicit a minimum amount of community service from the students.

Here’s how it works. Students who do community service receive a payment in the form of a university currency called a Buckaroo (the name is a mash up of “buck” and the university’s kangaroo mascot).

One hour earns one Buckaroo. At the end of each semester, each student is required to pay a 5 Buckaroo tax.

Buckaroos, however, are freely transferable. This means that some students may do no community service at all. Instead, they can purchase the Buckaroos they need from other students who have done more than the required five hours and therefore have excess Buckaroos.

The university keeps track of how many Buckaroos it issues and how many are collected. Interestingly, it always runs a “budget deficit”—meaning it issues more Buckaroos than it collects. It would be impossible for the university to run a budget surplus for any long term period without forcing some students to fail to meet the requirement.

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