Re-Embedding Finance: Democratic Funds as a Lever for a Sustainable and Solidary Economy

Abstract

Democratic Funds offer an institutional model to integrate non-pecuniary returns—such as ecological sustainability, social cohesion, or cultural value—into investment decisions. They respond to structural market failure and open new paths to democratize capital allocation. Through a token-based system, citizens gain equal rights to influence public investments. This article develops a design combining elements of sovereign wealth funds, crowdfunding, and liquid democracy. Democratic Funds enable value-based and participatory governance of economic resources, fostering social inclusion, macroeconomic stability, and socio-ecological transformation.