Promoting the understanding of cooperatives for a better world by Euricse

Promoting the understanding of cooperatives for a better world

Euricseâ&#x20AC;&#x2122;s contribution to the International Year of Cooperatives by Carlo Borzaga and Giulia Galera

For a better world

INDEX 1. Realizing cooperative potential.............................................................................................................................2 2. The importance of cooperatives......................................................................................................................... 6 2.1. Lessons from history 2.2. The size of the cooperative sector 2.3. The economic impact of cooperatives 2.4. The social value of cooperatives 3. Obstacles to cooperative development..................................................................................................14 3.1. Cooperative legislation 3.2. Market regulations 3.3. Support policies 3.4. Management and governance practices 4. Interpreting cooperatives........................................................................................................................................18 4.1. Limitations of conventional economic theory 4.2. New theoretical developments 5. Trends and challenges.................................................................................................................................................. 23 6. Implications for action................................................................................................................................................. 25 6.1. Introducing adequate regulations and support policies 6.2. Developing consistent governance and management practices 6.3. Promoting the visibility of cooperatives 7. References.................................................................................................................................................................................. 28

Foreword

This report summarizes the main findings of the conference â&#x20AC;&#x2DC;Promoting the Understanding of Cooperatives for a Better Worldâ&#x20AC;&#x2122;, which was co-organized by Euricse and the International Co-operative Alliance (ICA) on 15 and 16 March 2012 in Venice, Italy. The report draws mainly, but not exclusively, on the papers and presentations delivered by the invited speakers. The authors are extremely grateful to the invited speakers for their outstanding contributions. Special thanks also to the chairs, discussants, and rapporteurs for their valuable work and stimulating insights.

Realizing cooperative potential

firms1. The resilience of cooperatives has in-

Cooperative enterprises are influential

institutions.

both

industrialized

and

creasingly been acknowledged, and policy

developing countries, cooperatives contribute

and opinion makers are eager to understand

to socio-economic development, support

how cooperatives can play a role in tackling

employment growth, and sustain a more

the dramatic consequences of the global crisis

balanced redistribution of wealth. Moreover,

and reforming the system that has contribut-

a widening set of innovative activities are

ed to generating it. The attention recently paid

based on cooperative efforts, especially in

to cooperatives and related organizations by

the provision of new services such as open-

social networks, the media, and international

source software and general-interest services

organizations highlights this growing aware-

that improve the quality of life for entire

ness.

communities.

However, in spite of their importance, co-

The role and importance of cooperatives

operatives have not yet received the attention

is increasingly apparent in the wake of the

they deserve. The basic reason for this neglect

global financial and economic crisis. In most

has been a widespread conformism in inter-

countries, cooperatives have responded more

preting the functioning of the economy, de-

effectively to the crisis than investor-owned

spite the increasingly inability of convention-

In this report, the terms investor-owned and for-profit are used interchangeably to refer to enterprises that are owned by investors and specifically aim to maximize profits; both terms include family businesses. The term for-profit refers to the goal of the organization; the term investor-owned refers to ownership rights.

2 conference report Promoting the understanding of cooperatives for a better world

al economic theory to explain major events

limited compared with the extensive research

affecting contemporary societies. Since the

conducted on for-profit firms and markets.

mid-1970s, and especially following the col-

In addition, most of these studies are based

lapse of the Socialist regimes, an increasingly

on inconsistent hypotheses. The specific fea-

strong wind of â&#x20AC;&#x2DC;market fundamentalismâ&#x20AC;&#x2122; has

tures of cooperatives that distinguish them

blown from New York and Washington, deep-

from family businesses and investor-owned

ly influencing the approach to economic poli-

firms have not been sufficiently analysed

cy around the world (Ferri, 2012).

nor explained. A comprehensive theoretical

The vision promoted by this wind is that

framework that can account for the upsurge

the best way to trigger human progress is

of cooperatives has not been elaborated. This

through an allocation mechanism of self-reg-

lack of theorization has prevented the devel-

ulated markets populated by rational agents.

opment of appropriate indicators to measure

Furthermore, the investor-owned enterprise

the social impact of cooperative enterprises.

is taken to be the ideal form for organizing the

Moreover, the uncritical application of indi-

production of all goods and services, and effi-

cators designed to assess the efficiency of

ciency is measured exclusively by the ability to

for-profit enterprises has consolidated the

create value for the enterpriseâ&#x20AC;&#x2122;s shareholders

image of cooperatives as archaic or eccentric

- i.e., by maximizing profits (Ferri, 2012).

entrepreneurial forms that survive thanks to outdated traditions, special legal protection,

The main implications of this approach have

and/or state intervention (Ferri, 2012).

been the adoption of privatization policies that aim to create more space for markets and

The scarce interest in cooperatives and the

the underestimation of entrepreneurial forms

widespread existence of de facto coopera-

that differ from the for-profit ideal type. Con-

tively managed enterprises that are not des-

sequently, cooperatives have been viewed as

ignated as cooperatives have prevented an

accidents, exceptions, or transitional organi-

accurate assessment of the size and impact of

zations that were expected to disappear as a

these institutions. Cooperatives are defined

result of market completion. Few observers

in various ways in different contexts or not

regard cooperatives as a distinctive type of

defined at all. In countries where coopera-

institutional arrangement that populates the

tives are not recognized by law, people tend

economic system alongside investor-owned

to establish collective enterprises but not to

firms (Grillo, 2012).

call them cooperatives, as sometimes occurs

The predominance of this restrictive inter-

when farmers associate to market their prod-

pretation has weakened the interest of policy

ucts or communities inadequately served by

makers and researchers in cooperatives. Anal-

commercial banks establish informal credit

yses have not been proportional to the impor-

unions. Moreover, international statistical

tance of the cooperative sector, and those

standards adopted by most national statistical

studies that have been conducted are rather

offices do not collect data on the ownership 3

conference report Promoting the understanding of cooperatives for a better world

forms of enterprises. As a consequence, the

matic consequences. New paradigms and in-

available statistics on cooperatives are unsat-

stitutional arrangements are essential. Given

isfactory: comprehensive data exist for only a

their ability to effectively combine economic,

few countries and are not sufficiently reliable.

social, and ecological goals, cooperatives have

Taken together, these deficiencies attenu-

the potential to address and alleviate the cri-

ate the visibility of cooperatives and limit the

sis, which suggests that possible paths to exit

scope, performance, and success of coopera-

the crisis are available, but they have not yet

tive enterprises. A lack of public understand-

been fully exploited. There is a dramatic need

ing about the role and impact of cooperatives

not only for improved models for explaining

on well-being means that cooperatives are

cooperative enterprises and their functioning,

not widely recognized as an important form

but also for innovative interpretations of the

of entrepreneurial activity. Moreover, educa-

working of economic systems and the institu-

tion about cooperatives is either limited or

tions that govern them.

lacking in most public and private education-

Against this background, the Euricse Con-

al programmes. Consequently, cooperatives

ference offered a multidisciplinary reflection

are often unable to find trained personnel and

on how diverse cooperative forms can con-

end up copying the management practices,

tribute to shaping a sustainable economy and

organizational strategies, and impact-assess-

a fairer society. The conference stimulated

ment methodologies of investor-owned firms.

discussion about the rationale, role, and size

There is a clear need to overcome the con-

of cooperatives in various economic sectors.

tradiction that exists between the reality and

Existing theories were critically analysed and

the recognition of cooperatives. This need

confronted with empirical evidence. Thus, the

has been accentuated by the ongoing crisis,

conference provided the conditions for the

the origins of which can be traced to unex-

construction of new empirical knowledge and

amined beliefs about the role of competitive

the elaboration of theoretical frameworks

versus cooperative behaviours and the con-

that can further our understanding of the po-

viction that markets alone can ensure growth

tential of cooperative enterprises. The main

and welfare. These beliefs have in turn led to

findings are summarized in the following sec-

inadequate regulation of financial markets,

tions.

deep and increasing inequalities in income

Section 2 highlights the lessons learned

and wealth distribution, misuses of non-re-

from history and the importance of coopera-

newable resources, and the predominance

tives in terms of their socio-economic contri-

of short-term and irresponsible consumption

bution and social value generated. Section 3

models that threaten the environment.

identifies the main obstacles preventing the

Most observers agree that this crisis cannot

full exploitation of the competitive advantag-

be tackled by conventional policy measures,

es of cooperatives, including the existence

which will at best attenuate some of its dra-

of inadequate legal frameworks, ineffective 4

conference report Promoting the understanding of cooperatives for a better world

market regulations and policies, and poorly developed managerial practices. Section 4 examines the theoretical developments that can help explain the nature and rationale of cooperative enterprises, taking into account both the limitations of conventional interpretations and recent theoretical innovations. Section 5 analyzes the trends and challenges for cooperatives, while Section 6 summarizes three sets of recommendations that address the research community, public authorities, cooperative movements, and international donors.

5 conference report Promoting the understanding of cooperatives for a better world

The importance of cooperatives

and

From various perspectives, the contributors

historical

backgrounds. agricultural

Consumer

to the conference provided new data and

cooperatives,

information that highlight the importance

mutual-aid societies, credit unions, credit

of cooperatives both historically and in the

cooperatives, and worker cooperatives have

contemporary conjuncture.

been set up almost everywhere. Some specific types of cooperatives have registered an extraordinary growth in particular countries:

2.1

for example, credit cooperatives in Germany, housing cooperatives in the United Kingdom

Lessons from history Cooperatives have existed for around two

and Sweden, and worker cooperatives in

hundred years. While operating in all fields

France and Italy. At the end of the 19th century,

of economic activity, cooperatives have

cooperatives performed an important role as

greater longevity than for-profit firms. The

economic and social institutions in Central

cooperative model has continually adapted

and Eastern Europe. Interesting examples of

to changing conditions, and innovative forms

self-reliance initiatives occurred in the Czech

of cooperation have emerged to address new

Republic, Bulgaria, Serbia, and Poland before

economic and social concerns.

the socialist takeovers (Borzaga et al., 2008). Similarly, cooperatives have played a key

Cooperatives have developed in countries diverse

role in developing countries, even though

political conditions, degrees of economic

they are often not institutionalized nor even

development,

acknowledged by law (M端nkner, 2012).

characterized

profoundly

cultural

characteristics,

6 conference report Promoting the understanding of cooperatives for a better world

When they first emerged, cooperatives

cooperatives have contributed to improving

were usually spontaneous defensive reactions

the quality of life of large –and often

to the harsh conditions engendered by the

disadvantaged–segments of society. Many

industrial revolution or rural poverty. Over the

public welfare policies have been established

years, cooperatives have provided an ever-

thanks

increasing share of income and employment

experimentation by cooperatives. Key welfare

in many countries and regions. Cooperative

institutions were originally developed by

development is an ongoing process. New

mutual aid and cooperative societies. Starting

types of cooperatives–for instance, social

at the beginning of the 20th century, however,

and community cooperatives–have emerged

most social and health services in Europe were

to provide services that are characterized

taken on by government authorities as part of

by an unsatisfactory supply, including social,

the process of constructing welfare states.

educational, and work integration services

Consequently, these services were removed

to local communities and disadvantaged

from cooperative and mutual control, and

people. Furthermore, new cooperatives have

started to be publicly funded and provided

emerged to help communities better exploit

by law to all citizens. This trend did not turn

local resources (Hagedorn, 2012).

out to be unidirectional, however, since by

pioneering

invention

and

The main reason for the success and

the end of the 20th century new cooperatives

longevity of cooperatives is that they are

were playing an increasingly important role

not motivated to maximize the rate of profit

in delivering services in many European

for investors, but rather to address the

countries.

needs of communities. Cooperatives should

Historical evidence shows that cooperatives

be regarded as collective problem solvers.

not only survive crises better than other types

Historically, cooperatives have prospered

of enterprises, but also more successfully

when they have specific advantages over

address the effects of crises. The history of

investor-owned enterprises and satisfy needs

British consumer cooperatives during the

that are otherwise unmet. User and consumer

19th century is one of sustained growth that

cooperatives have been established to

was only marginally checked by the impact

minimize intermediation costs and retail

of periodic recessions (Birchall, 2012). During

prices;

agricultural,

the Great Depression of the 1930s, electricity

cooperatives to increase the weak market

and telecommunication cooperatives helped

power of producers; worker cooperatives

transform the rural economy of the USA.

to provide members opportunities to self-

During the 1960s, a cooperative movement

manage their businesses. Mutual aid societies

was created in New York to house 27,000

have been set up by workers and communities

families (Birchall and Hammond Ketilson,

to provide common insurance and assistance.

2009). During the radical restructuring of the

By satisfying the needs of their members,

1970s, worker cooperatives in Europe grew

producer,

especially

7 conference report Promoting the understanding of cooperatives for a better world

in number and demonstrated a lower failure

inputs. In the USA, cooperatives have a market

rate than for-profit firms. The current crisis has

share of about 28 per cent in the processing

provided further evidence of the strengths

and marketing of agricultural products, and a

and resiliency of cooperatives.

26 per cent in the supply of inputs (Valentinov et al., 2012). Worldwide, there are around 53,000 credit

2.2

cooperatives and credit unions. In Europe,

The size of the cooperative sector

there are some 4,200 credit cooperative banks

To understand the cooperative movement,

with 63,000 branches. These cooperative

a realistic estimation of the overall size of the

banks have 50 million members (about 10 per

cooperative sector is needed.

cent of the continent’s population), 181 million

From the evidence available, it is clear that

clients, 780,000 employees, €5.65 billion of

cooperatives play a significant economic

assets, and an average market share of about

role. Just to mention a few data, the

20 per cent (V. Zamagni, 2012).

United Nations estimated in 1994 that the

In the European retail sector, 3,200

livelihood of nearly 3 billion people–or half

consumer cooperatives employ 400,000

the world’s population–was made more

people and have 29 million members, 36,000

secure by cooperative enterprises (ICA,

points of sale, and €73 billion of turnover.

2012). Worldwide, there are three times as

As for utilities, the presence of cooperatives

many member owners of cooperatives as

is quite important in the USA, where almost

there are individual shareholders in investor-

1,000 electricity cooperatives control 40 per

owned enterprises, and in the fast-growing

cent of the national electricity distribution

BRIC countries there are four times as many

lines, covering 75 per cent of country’s territory

cooperative members as direct shareholders

and serving 37 million members and their

(Mayo, 2012). The combined membership of

households (V. Zamagni, 2012). Cooperatives

cooperatives is between 800 million (ICA, 2012)

play a major role in managing water supplies

and 1 billion people (Worldwatch Institute,

in Argentina and in Bolivia, where one large

2012). According to the ICA, cooperatives are

urban water cooperative serves around

active in all countries and their importance is

700,000 customers (Mori, 2012). Workers have organized cooperatives in

especially significant in poor communities. As contributions to the Euricse conference

a wide range of industries. In Italy, there

documented, cooperatives are prominent

are more than 25,000 worker cooperatives

in several sectors. In Europe, agricultural

(Pérotin, 2012). In Spain, around 14,000 new

cooperatives have an aggregate market share

cooperatives

of about 60 per cent in the processing and

1998 and 2008, of which 75 per cent were

marketing of agricultural commodities and an

worker cooperatives (Díaz-Foncea, 2012). The

estimated 50 per cent share in the supply of

sectoral distribution of these cooperatives

were

established

8 conference report Promoting the understanding of cooperatives for a better world

between

tends to vary from one country to another:

cooperatives exist in a wide range of

in France, many worker cooperatives exist in

industries. Furthermore, in some countries

manufacturing and construction and a smaller

they are larger than other enterprises and may

number in services; conversely, in Uruguay a

even be better capitalized. Recent empirical

lower proportion are located in manufacturing

studies show that employment levels in

and a higher proportion in transport and

cooperatives appear more stable than in

services, when compared to investor-owned

investor-owned firms: conventional firms tend

enterprises (PĂŠrotin, 2012).

to adjust employment levels, while worker cooperatives adjust pay, thus safeguarding

According to the International Cooperative

employment (PĂŠrotin, 2012).

and Mutual Insurance Federation, 25 per cent of the world insurance market in 2008 was

To sum up, the contribution of cooperatives

cooperative including 44 per cent in Germany,

to income and employment is important

39 per cent in France, 38 per cent in Japan,

overall, albeit not homogeneous. Despite the

and 30 per cent in both the USA and Canada

crisis and a demutualization process that has

(V. Zamagni, 2012).

led many cooperatives to be transformed

Social cooperatives, which are especially

into investor-owned firms over the last two

widespread in some European countries and

decades, cooperatives are not in contraction.

in Canada, are a new form of cooperative that explicitly aims to enhance collective benefits. As a type, the social cooperative is positioned

2.3

between the traditional cooperative and

The economic impact of cooperatives

the non-profit organization, and it generally

As highlighted by several presenters at

combines the involvement of a plurality of

the Euricse Conference, the assessment of

stakeholders (cooperative members) with

the economic impact of cooperatives must

the pursuit of general-interest goals. In Italy,

be broadened beyond narrowly quantitative

where this type of cooperative is the most

parameters. To better understand the role

developed, social cooperatives over the last

of cooperatives, particular attention needs

two decades have become key players in the

to be paid to the contribution that these

welfare system. Since they were first created,

institutions provide to the overall functioning

social cooperatives in Italy have registered

of economic systems.

an average annual growth rate ranging from

Cooperatives contribute in at least five

10 to 20 per cent. In 2008, there were 13,938

ways. First, they play a far from marginal

social cooperatives, employing approximately

role in reducing market failures, thereby

350,000 workers, utilizing 35,000 volunteers, and

improving the functioning of the economic

serving 4.5 million users (Andreaus et al., 2012).

system and the well-being of large groups of

In contrast to the conventional wisdom, recent

research

demonstrates

people (Hansmann, 1996). This contribution

that

stems from the distinctive ownership and 9

conference report Promoting the understanding of cooperatives for a better world

governance rules of cooperatives. The

community services. In cases of negative

coexistence of a plurality of enterprises that

profitability, cooperatives can achieve the

have diverse ownership structures and pursue

break-even point thanks to the attraction of

different goals contributes to improving

additional resourcesâ&#x20AC;&#x201C;such as voluntary work

market competitiveness, which in turn

and donationsâ&#x20AC;&#x201C;or the implementation of

provides more choices to consumers, helps

price discrimination policies. Evidence from

prevent the formation of monopolies, lowers

the experience of cooperatives shows that

retail prices, provides opportunities for

voluntary work and donations are especially

innovation, and limits information asymmetry.

important in the start-up phase of all types of

Second, cooperatives play a key role in

cooperatives, regardless of their context of operation.

stabilizing the economy, especially in sectors characterized by considerable uncertainty

Fourth, cooperatives tend to adopt a long-

and price volatility, such as finance and

term perspective, as they often become

agriculture. Cooperative banks in Europe

productive assets for the communities in which

and credit unions in North America are seen

they operate. Cooperatives are generally

as a stabilising influence on the banking

concerned about the welfare of current

system (Birchall, 2012). As historical evidence

and future generations. Consistent with the

from previous recessions demonstrates,

third ICA principle of membersâ&#x20AC;&#x2122; economic

the stabilizing role of cooperatives is crucial

participation, numerous cooperative statutes

during times of crises. Moreover, the presence

allocate a portion of cooperative surpluses to

of cooperatives improves the capacity of

a collective and indivisible reserve fund that

societies to respond to uncertain changes in

does not belong to members individually but

the future.

must be utilized for the benefit of all and future

Third, cooperatives contribute to keeping

generations. In some countries, the long-term

the production of goods and services close

perspective of cooperatives is incorporated

to the needs of the people that they serve.

into laws that oblige cooperatives to move part

Often supplying goods and services that are

of their annual surplus to asset locks, meaning

innovative, cooperatives meet the specific

that part of their assets and profits must be

needs of their members rather than respond

used to promote community interests.

to the rationale of profit maximization.

Fifth, cooperatives contribute to a fairer

They also can produce goods and services

distribution of income. Since cooperatives are

with low and uncertain, if not negative,

created to meet the needs of their members

profitability that investor-owned enterprises

and are not conceived to accumulate profits,

are not interested in providing and public

they tend to redistribute their resources

authorities are unable to supply. Services with

either to workers by increasing wages or

low or negative profitability include social,

employment or to consumers by charging

health, educational, and other personal and

lower prices. 10

conference report Promoting the understanding of cooperatives for a better world

2.4

Historical evidence demonstrates that compared with investor-owned enterprises,

The social value of cooperatives

cooperative solutions are more inclusive

Since their establishment, cooperatives

and more oriented to promoting general-

have been not only economic institutions,

interest goals with a beneficial impact on

but also social actors that are explicitly

well-being. Financial cooperatives often aim

committed to addressing problems affecting

to overcome financial exclusion; consumer

local communities or groups of stakeholders

cooperatives guarantee the supply of basic

in need.

commodities, thus ensuring the survival

The social role of cooperatives is often

highlighted, but it is seldom analysed systematically.

The

social

impact

entire

households;

and

agricultural

cooperatives are the main institutional tool

whereby independent farmers respond to the

cooperatives is more than an additional

market power held by big retailers and seek

feature or an externality: it is an added value

to maintain their roles as the producers and

that is voluntarily generated and is an integral

protectors of local economies.

part of the operation of cooperatives.

Early cooperative initiatives were strongly

Nevertheless, the beneficial social impact

rooted in a ‘collective awareness’ that sought

generated by cooperatives varies according

to improve the well-being of communities

to the type of cooperative, the context, and

(Defourny and Nyssens, 2012). However,

the time frame. In addition to regional and

over the years cooperatives have become

sectorial specificities, it should be underlined

extremely diversified according to their

that cooperatives are often institutional

location and field of operation. In countries

responses to extreme situations of need

where

that threaten the lives of ordinary people

markets

are

developed,

cooperatives have weakened their social

and that they form thanks to joint action by

commitment and in some cases evolved

a social group sharing a collective identity

into entrepreneurial forms that differ from

(Defourny and Nyssens, 2012). The focus of

investor-owned enterprises solely due to their

early cooperatives varied according to the

ownership rights, rather than by virtue of their

main target group involved: in the UK, this

social aims. In some other countries, including

was consumers; in France, artisans; and in

many in Latin America, cooperatives have

Germany, farmers, urban artisans, and traders

evolved into broader community-oriented

(Münkner, 2012). The social function of

enterprises. New types of cooperatives with

cooperatives is reflected in Raiffeisen’s idea

declared social goals have been established

of a Christianity of action, Schulze-Delitzsch’s

over recent decades, and many of these

idea of self-help, the Rochdale Pioneers’ idea

operate in new fields of activity. Social

of an emancipation of the workers, and Victor

cooperatives, for instance, are strongly

Huber’s idea of active self-education.

rooted in forms of collective awareness, such 11

conference report Promoting the understanding of cooperatives for a better world

as the need to promote social justice, protect

generates several beneficial effects. First,

the environment, and support the social and

thanks to their embeddedness at the local

professional integration of disadvantaged

level–which is facilitated by the participation

individuals. In social cooperatives, collective

of a plurality of stakeholders, including

benefits are not simply induced by economic

members,

activity; rather, they are a key feature

cooperatives contribute to enhancing social

motivating members to undertake the activity

capital and strengthening trust relations within

(Defourny and Nyssens, 2012).

communities. Cooperatives can therefore be

beneficiaries

and

workers–

The Statement of Cooperative Identity and

regarded as effective tools for developing civic

Principles adopted by the ICA in 1995 includes

attitudes and, in turn, generating social virtue

a seventh principle, ‘concern for community’,

(Dasgupta, 2012). The positive influence that

that articulates and revitalizes the social

cooperatives have on social cohesion stems

dimension of various types of cooperatives

from their ability to institutionalize key rules

(MacPherson, 2012). The incorporation of

that ensure the accomplishment of mutually

this principle was designed to counter the

beneficial transactions. Cooperatives are

tendency of cooperatives to emphasize the

characterized by a mutual affection stemming

economic benefits of membership, which

from the interdependent utilities cooperative

are linked to the distribution of surpluses in

members share, and members tend to have

proportion to members’ participation, over the

a pro-social disposition since they share a

social impact. By confirming the connection

common goal that often coincides with the

of cooperatives with their communities,

common good. Moreover, since they provide

this principle highlights two distinguishing

incentives to their members to keep promises,

features: cooperatives’ close attention to the

cooperatives can be regarded as institutions

social consequences of their activities and their

that translate into a specific contract the

responsibilities to care for the communities

informal agreement of people who pool

in which they operate. In turn, cooperative

their resources. Cooperatives can hence be

commitment to the community is expected to

considered an external enforcer of socially

generate competitive advantages, as shown

oriented behaviours (Dasgupta, 2012).

by the experience of credit cooperatives,

Second,

protecting

incomes

cooperatives

help

which derive their strength from their local

employment,

embeddedness and community involvement.

problems that would otherwise remain the

Moreover, given cooperatives’ goals and

responsibility of public policies. Cooperatives

participatory structures, they have a built-

have demonstrated an ability to create

in capacity to respond to new community

and preserve jobs in deteriorating market

challenges by creating businesses in a wide

conditions

range of fields (MacPherson, 2012).

enterprises. Worker buyouts are increasing

better

than

and solve

investor-owned

in some countries as a reaction by employees

The social orientation of cooperatives 12

conference report Promoting the understanding of cooperatives for a better world

who are concerned about losing their jobs.

epistemologically flawed, but also incapable

As recent takeovers in several countries have

of developing adequate policies (S. Zamagni,

demonstrated, cooperatives can save jobs

2012).

when a deep crisis occurs (PĂŠrotin, 2012). It is increasingly recognized that unemployment has broader effects than its strictly economic consequences, particularly on health. If worker cooperatives create or preserve jobs for their employees, they also have positive effects on public expenditure and health in their communities. Additionally, when cooperatives complement the public supply of welfare services by providing new services that fill gaps in service delivery, they create new jobs. Third, cooperatives do not limit themselves to

creating

employment

opportunities;

they often privilege disadvantaged workers excluded or at risk of exclusion by the labour market. In some countries, cooperatives explicitly favour workers discriminated against by investor-owned enterprises and provide them with appropriate on-the-job training to help them overcome their disadvantages (Defourny and Nyssens, 2012). The

social

benefits

cooperatives

are

consideration

generated

seldom impact

taken

into

analyses

that

compare the performance of different types of enterprises since these analyses are usually based on narrow efficiency criteria. Most of these comparisons are biased towards investor-owned firms since they do not consider the social aims, intrinsic outcomes, and collective benefits generated by cooperatives. This approach is not only

13 conference report Promoting the understanding of cooperatives for a better world

Obstacles to cooperative development

Cooperatives often face severe obstacles

which was a document officially recognized

that hamper their development. These

by the UN in 2001 and the International

obstacles are generated by weak legal

Labour Organization (ILO) in 2002 (M端nkner,

frameworks, inadequate market regulations

2012). This lack of uniformity has two main

and policies, and poorly developed managerial

implications: first, it undermines or limits

practices adopted by cooperatives.

the visibility and use of the cooperative ownership form; second, it prevents the internationalization of cooperative businesses

3.1

and weakens the potential interaction among cooperatives based in different countries.

Cooperative legislation for-profit

Cooperative legislation is often restrictive

enterprises is relatively uniform across

rather than enabling. In some countries,

countries, cooperative law varies greatly and

legislation

in some countries specific legislation is non-

cooperatives are allowed to operate and the

existent. These differences are difficult to

scope of activities that can be carried out by

understand given the strong effort made at

members. Additional obstacles are generated

the international level to promote a shared

by setting high minimums on the number

conception of the values and principles

of members or assets required to establish

of cooperatives, as highlighted by the ICA

new cooperative enterprises. Furthermore,

Statement of the Cooperative Identity of 1995,

especially in countries where cooperatives are

While

the

regulation

restricts

the

14 conference report Promoting the understanding of cooperatives for a better world

sectors

where

still classified as non-entrepreneurial entities,

systems, and governance mechanisms that

there are limitations placed on the scope and

fail to take the specificities of the cooperative

form of their business operations.

model into account (Grillo, 2012). A failure to

The low esteem in which cooperatives

recognize the specific nature of cooperatives

are generally held has prompted some

can generate disproportionate regulatory

national legislatures to allow for or to favour

costs on cooperative banks and reduce access

cooperative

to credit by small enterprises and households

demutualization.

This

has

(Ferri, 2012).

occurred, for instance, where the law allows the transformation of mutual aid societies

Similarly, in the public utilities sector,

and cooperatives into for-profit enterprises,

antitrust authorities may seek to defend users

with the consequent risk that transformation

against the market power of providers by

choices are induced by opportunistic members

imposing rules and constraints that generate

or managers who are primarily interested in

additional costs. These rules presuppose the

seizing control of the assets that cooperatives

sole existence of investor-owned enterprises.

have accumulated.

When cooperatives are involved, however, some of these rules and constraints are redundant and generate unnecessary costs

3.2

since users are already protected by the cooperative

Market regulations

ownership

form.

similar

Cooperatives can be prevented from fully

situation occurs in the general-interest service

exploiting their competitive advantages by

sector. Cooperatives can be damaged by

market regulations. While in some cases market

inequitable processes of contracting out the

regulations are neutral or even favourable

provision of these services when the system

to cooperatives, in others competition rules

of contracting is based on criteria that do not

may limit the development of cooperatives.

recognize the intrinsic differences between

The Euricse Conference highlighted several

cooperatives and investor-owned enterprises.

examples of market regulations that have had negative effects. When

designed

without

taking

3.3

the

specificities of cooperatives into account,

Support policies

the regulation of financial markets hinders

Cooperatives

normally

benefit

from

the development of cooperative enterprises

public policies that have been designed to

in the credit sector. International accounting

support the start-up and consolidation of

standards and international financial rules such

business initiatives. Since dedicated measures

as the Basel Accords limit the development

are sometimes introduced specifically to

and growth of cooperatives when they impose

support cooperatives, there is a widespread

capitalization schemes, liquidity management

conviction that cooperatives are favoured in 15

conference report Promoting the understanding of cooperatives for a better world

comparison to investor-owned enterprises.

While cooperatives have grown in number

This is a simplistic conclusion. Indeed, policies

and size in many sectors and proved to be

supporting cooperatives are often weak,

efficient, management has remained an area

contradictory, or controversial.

of weakness (V. Zamagni, 2012). The copying

In some countries, policies withhold the

of practices from investor-owned firms

full status of ‘enterprise’ from cooperatives,

disregards the potential of cooperatives to

thereby denying them the benefits provided

develop alternative models that are more

to for-profit firms. For example, employment

efficient and consistent with the cooperative

subsidies are sometimes denied to the

ownership form.

members or employees of cooperatives. In

Weak management has several negative

some other countries, legislation imposes

consequences: it encourages cooperatives

burdensome obligations on cooperatives that

to mimic the practices of investor-owned

do not apply to investor-owned firms. This

enterprises; it hinders cooperatives from

occurs, for instance, when cooperatives have

exploiting their key advantages, especially

to comply with locked asset rules, but are not

those resulting from the strong and active

qualified to receive fiscal benefits in the name

engagement of members; and it stimulates

demutualization by opportunistic members

competition.

Moreover,

cooperatives

and managers.

are often not entitled to the incentives and

The

fiscal advantages granted to non-profit

lack

consistent

management

organizations even though they pursue the

practices occurs especially when cooperatives

same social and general-interest goals.

grow in size and when the heterogeneity of members’ interests increases. In principle, this issue could be managed through

3.4

innovative governance strategies. However, cooperatives are often trapped between

Management and governance practices

isomorphic

Cooperatives face many challenges as they

tendencies

and

ideological

pursue economic performance while seeking

governance solutions. Thus, experimentation

to remain faithful to their values and founding

with innovative strategies can be hindered

principles. Cooperatives must struggle to

by the passive acceptance of an exclusive

adopt management and accounting practices

governance model of assemblies and boards

that reflect their ethics.

that are elected on the basis of the principle

Mainstream managerial practices are often

‘one head, one vote’ (Hansmann, 2012). At the

inadequate for managing cooperatives. The

same time, empirical experience demonstrates

lack of educational and training programmes

that there are various governance strategies

tailored to the needs of cooperatives leads

by which cooperatives can be managed

managers to adopt practices and tools

and ownership costs reduced, even when

inconsistent with the mission of cooperatives.

heterogeneous interests are at play. However, 16

conference report Promoting the understanding of cooperatives for a better world

these innovative strategies have rarely been analyzed in depth and formalized, and hence their adoption has not been extensive. Presenters at the conference provided examples of these processes. Case studies of Mondrag贸n and cooperative banks in Finland have shown that institutional adaptation is an important factor accounting for success. Thanks to their ability to adjust to changing conditions through the design of innovative governance

solutions,

both

these

cooperative groups have demonstrated their ability to thrive while responding to pressures to sustain democracy (Jones and Kalmi, 2012).

17 conference report Promoting the understanding of cooperatives for a better world

Interpreting cooperatives

A new interpretative framework is needed.

efficient than investor-owned enterprises.

to overcome the obstacles that have been

Several speakers contested the inadequate

identified and to strengthen the economic

starting assumptions of conventional theories

impact and social value of cooperatives. One

regarding not only cooperatives, but also

important aim of the Euricse Conference was

larger economic and social systems.

to shed light on theoretical developments

Particular attention was paid to three

that can help explain the nature and rationale

limitations of existing theories. The first

of cooperative enterprises. The presenters

is the assumption that the main condition

identified both the limitations of conventional

of efficiency is the specialization of tasks

interpretations

deriving

and

recent

theoretical

from

the

division

labour.

Economists generally assume that whenever

innovations.

the social division of labour is maximized, the specialization of agents can be strengthened

4.1

and the maximum level of production

Limitations of conventional

allowed by technology will be achieved. This

economic theory

assumption disregards the efficiency gains analytical

that can result from cooperation among

approaches, all conference presenters agreed

agents pursuing the same activity rather than

on the need to challenge the widespread

specializing in specific tasks.

While

adopting

different

The second limitation is the assumption

belief that cooperatives are generally less

18 conference report Promoting the understanding of cooperatives for a better world

that competitive markets and contracts

by pro-social motivations–such as reciprocity,

are the most efficient social institutions for

moral commitments, or process-regarding

coordinating independent, specialized, and

preferences–that

rational agents. An additional embedded

combined with self-interested motivations. A

assumption

competitiveness

broader view of the nature of individuals has

characterizes markets naturally or that it can

been developed by behavioural economists,

be achieved through adequate regulation.

who have highlighted the human capacity to

However, in many cases the market is not–

cooperate based on ‘strong reciprocity’ (Ben-

nor can it become–fully competitive, and

Ner and Ellman, 2012; S. Zamagni, 2012).

that

overshadow

are

as a result the market is unable to generate

It is not surprising that the conclusions

the maximum social welfare. Under such

arising from the application of theories that

conditions, opportunities for recourse to the

disregard the limitations of the mainstream

market are structurally limited.

approach are questionable and inconsistent

The third limitation is the assumption

with the real functioning of cooperatives.

that economic agents are fully rational and

For example, consider the ‘perverse supply

self-interested, and thus that they can be

response’ that is alleged to take place in

characterized by a utility function with one

worker cooperatives–i.e., that cooperatives

exclusive determinant: the maximization

are expected to reduce employment when

of net income that is generated by their

prices increase. Recent empirical studies show

participation in any type of economic activity.

that cooperatives do not exhibit any perverse

This simplification is unable to explain the real

supply response to changes in product prices

behaviour of agents, who are not usually solely

or demand shocks. Rather they show that

motivated by monetary rewards. Moreover,

cooperatives tend to favour the creation

it is unable to explain why transactions take

and stability of employment more than

place even when the maximum possible

conventional firms (Pérotin, 2012). A similar

monetary gain is not achieved. There are two

condition exists regarding the supposed

important reasons why these transactions

structural inefficiency of cooperatives due

may occur. The first is that the decision to take

to the expected free-riding behaviour of

part in an economic activity results from self-

uncontrolled workers. This interpretation

interested motivations other than monetary

disregards the role of intrinsic motivations,

rewards. Such rewards include, for instance,

which are often the key factors influencing

the stabilization of income over time in

the decision to join cooperatives.

worker cooperatives and opportunities to sell

To sum up, interpretations based on dubious

commodities at fair prices under inter-temporal

assumptions are not an adequate basis for

conditions in agricultural cooperatives. The

understanding the rationale of cooperative

second reason is that agents are not driven

enterprises.

solely by self-interested motivations, but also 19 conference report Promoting the understanding of cooperatives for a better world

4.2

the cooperative mechanism allows for the generation of competitive advantages in

New theoretical developments

specific conditions, depending on the type

To understand the rationale of cooperatives,

of transactions that take place. Cooperatives

it is necessary to conceive market exchanges

have specific advantages especially when

as only one possible coordination mechanism

coordination cannot be achieved exclusively

generating collective benefits. According

through economic and self-seeking behaviours.

to this assumption, which is largely shared

There are indeed several situations in which

by economists, the market’s peculiarity is

collective gains can be achieved under the

its ability to efficiently manage exchanges

condition that social agents trust each other,

when all participating individuals achieve fair

adopt cooperative rather than–or in addition

benefits by rearranging the distribution of

to–self-interested behaviours, and activate

goods or tasks among themselves.

motivations and behaviours that are other-

Indeed, alternative mechanisms based on

regarding or based on reciprocity. When inter-

hierarchy or cooperation can also generate

temporal agreements generate gains greater

collective benefits. According to conventional

than those derived from other arrangements,

economic theory, both public agencies and

cooperatives can seize the advantages of

private enterprises relying on a mix of such

scale economies; this situation occurs, for

mechanisms appear to be more efficient

instance, in agricultural cooperatives. When

social institutions whenever the market fails.

the pooling of risks of large numbers of

Nevertheless, the key step is to recognize that

members occurs, mutuals and insurance

not all enterprises share the same features.

cooperatives succeed in achieving more

Both public agencies and investor-owned

efficient solutions than market exchanges.

enterprises are mainly based on hierarchy.

When efficiency presupposes that agents

In addition, investor-owned enterprises are

‘tell the truth’, cooperatives can efficiently

largely organized according to contractual

manage the transmission of information.

relations that replicate the rationale of

Finally, when the goods and services produced

market exchanges. Indeed, investor-owned

are characterized by positive externalities

enterprises can be regarded as ‘privately

that cannot be internalized owing to the

owned markets’ in which interactions among

impossibility of charging the beneficiaries

economic agents are based on self-interest

the full value of the products through the

and monetary exchanges (Heath, 2006). As

price system, cooperatives have an efficiency

a consequence, investor-owned enterprises

advantage.

often tend to fail under the same conditions

All these situations are widespread, and

as markets. Unlike

investor-owned

consequently a large space of action exists

enterprises,

for cooperatives of different types, including

cooperatives are mainly based on voluntary

cooperatives explicitly pursuing social goals.

cooperation. The possibility of exploiting 20

conference report Promoting the understanding of cooperatives for a better world

This interpretation of the diversification

achievement of important economies of scale

of economic institutions implies that the

in activities that are not subject to the division

characteristics distinguishing cooperatives in

of labour (Valentinov et al., 2012). Other

terms of coordination mechanisms are critical.

examples include mutuals, which are effective

These characteristics include the indivisibility

at pooling risk, and social cooperatives, which

of cooperativesâ&#x20AC;&#x2122; economic and non-economic

are efficient when positive externalities that

roles, the principles guiding cooperative

cannot be internalized are generated. A third implication concerns the potential of

action, and the statutory constraints under these

cooperatives. Consistent with the proposed

the

theoretical framework, cooperatives have a

specific coordination problems that confront

lot of potential for development around the

cooperatives of various types.

world. In developing countries, considerable

which

cooperatives

characteristics

are

operate. consistent

All with

This approach to cooperatives has four

scope exists for obtaining collective benefits

important implications. The first is the

from cooperative mechanisms owing to low

efficiency

characterize

levels of income, the underdevelopment

cooperatives when compared to market

of market exchanges, and limited welfare

exchanges, investor-owned enterprises, and

systems. In industrialized countries, there

public institutions. In particular, cooperatives

is an increasing and diversified demand

derive specific efficiency advantages from

for social and community services that are

their stronger reliance on motivations other

characterized by positive externalities.

advantages

that

than self-interest. Furthermore, cooperatives

A fourth implication involves the limitations

are expected to be less subject to free riding

of cooperative enterprises. Cooperatives

compared to other institutions. The additional

tend to lose their competitive advantages in

resource of cooperatives is the membersâ&#x20AC;&#x2122;

addressing market failures as soon as markets

intrinsic motivations, and efficiency analyses

become more competitive. Nevertheless,

should take this critical factor into account (S.

the

Zamagni, 2012).

occurs only in specific markets and under

evolution

towards

competitiveness

The second implication concerns the

precise conditions; indeed, it involves only

viability of cooperatives. Cooperatives survive

those activities where the division of labour

and prosper in fields where mechanisms other

can further increase and market failures can

than market exchanges apply and non-self-

be significantly attenuated or eliminated

seeking motivations play a key role. This is the

through the evolution of the market itself

case for the credit sector, where organizations

or by regulation. When markets become

based on trust relations contribute to

more competitive, cooperatives can still play

improving the exchange of information. It can

a role provided they adopt marketing or

also occur in the agricultural sector, where

organizational strategies that increase the

cooperation among farmers allows for the

value added of their products. 21

conference report Promoting the understanding of cooperatives for a better world

To sum up, the decision to create cooperative enterprises of various types, their survival, and their contribution to the economy and society can be explained by the advantages that cooperatives have over forprofit firms. The Euricse Conference clarified two important issues. First, from a variety of perspectives presenters contested the ideas that cooperatives are marginal enterprises and market exchanges and investor-owned firms are inevitably the most efficient social institutions. This belief relies heavily on theories that have many shortcomings. Second,

the

presentersâ&#x20AC;&#x2122;

findings

demonstrated the feasibility of developing a new theoretical strand more consistent with the results of historical and empirical analyses of cooperatives. Although further theoretical developments are needed, the clarification of these issues has important implications for cooperatives at an operational level.

22 conference report Promoting the understanding of cooperatives for a better world

Trends and challenges

The future holds major challenges for

for-profit enterprises and public agencies is

cooperatives. The global crisis has not only

not a viable solution. Indeed, the strategy

demonstrated that cooperatives can be more

of extensive liberalization and privatization

resilient than investor-owned enterprises, but

that has been followed by most national

also shed light on the shortcomings of the

governments since the 1980s has led to

predominant model of economic organization,

unsatisfactory outcomes. Such shortcomings

which is centred on the action of two types of

have led to a dramatic increase in inequalities,

institutions: for-profit enterprises coordinated

the misuse of non-renewable resources, and

by the market and public organizations based

the growth of uncertainty and poverty. The awareness of the limitations of an

on the principle of authority. The crisis has confirmed the inability of for-profit enterprises

economic

alone to ensure well-being, especially when

competitive and self-seeking behaviours

exchanges fail to benefit both parties of a

transaction. Moreover, it has made explicit the

responsibilities and innovative management

inability of public agencies to confront all the

strategies that emphasize collaboration also

failures of markets and for-profit enterprises

by for-profit enterprises. It is not surprising

on the one hand and to meet the growth and

that a growing number of observers consider

diversification of needs on the other. The crisis

the expansion of various forms of cooperation

has shown that privatization policies based on

as a viable way out of the crisis. Consequently,

the reallocation of tasks and roles between

new spaces for development have emerged

leading

organization to

the

that

adoption

23 conference report Promoting the understanding of cooperatives for a better world

overvalues of

social

for both traditional and new types of

the declining coverage of health and long-

cooperatives.

term care by public insurance institutions.

Traditional cooperatives are expected to

Another expanding field is community

play an increasingly significant role in key

services, including the management of

activities such as providing credit and housing

cultural institutions, water resources, waste

and supporting agriculture and job creation.

disposal, public transportation, and renewable

Cooperative banks and credit unions should

sources of energy. All these activities are

continue to develop as they have proven

characterized by either natural monopolies or

to be less risky than big corporate banks,

low and uncertain profitability. Cooperative

and they have managed to strengthen trust

enterprises are best suited for providing

relations and attract new clients. Agricultural

services under these conditions due to their

cooperatives

participatory membership and governance

will

become

increasingly

models.

important for ensuring the survival of farmers

A growing field of activity for cooperatives

and agricultural production, given increased food needs due to population growth. In

institutionalizing

networks

small

addition, agricultural cooperatives can play

enterprises outside the traditional sectors

an important role in ensuring food security,

of agriculture and fishing. Cooperatives

protecting the environment, and promoting a

can effectively manage common activities,

sustainable model of development. With job

including research and product development,

security decreasing and unemployment rates

and promote the expansion of markets and

rapidly increasing, the many existing examples

increase the productivity and competitiveness

of new worker cooperatives and worker

of member enterprises. Presenters at the conference provided

buyouts suggest that a more prominent role can be played by cooperatives in saving jobs

several

and creating employment.

cooperatives of

Furthermore, there are several new fields

examples and

organizing

new

innovative

traditional

types

modalities

cooperatives.

where the potential of cooperatives is far from

Nevertheless, it is clear that more effective

being fully exploited. These include personal

exchanges of practices would better support

services and, in particular, social, educational

mutual learning and stimulate a revival and

and health services. These services are

strengthening of cooperatives around the

characterized

world.

increasingly

diversified

demand in situations where, on the one hand, the public supply of these services is limited and decreasing while, on the other, the quality of the private for-profit supply is variable and uncertain. Similar considerations apply to mutuals, which can serve to compensate for 24 conference report Promoting the understanding of cooperatives for a better world

Implications for action

fully

exploit

the

advantages

consolidation.

cooperatives, several obstacles need to

In Europe, cooperatives have developed

be overcome. The conference presenters

most rapidly where their expansion has been

emphasized

the

unhindered by inadequate regulation, their

development of cooperative enterprises and

roles are fully recognized, and their operations

suggested remedies. Their proposals can be

have not been confined to specific sectors (V.

summarized as three sets of recommendations

Zamagni, 2012). To develop cooperativesâ&#x20AC;&#x2122; full

that address the research community, public

potential, cooperative law must recognize the

authorities, cooperative movements, and

roles of cooperatives and be flexible enough

international donors.

to permit cooperatives to operate in whatever

the

barriers

limiting

industry they prove useful (Hansmann, 2012). This includes sectors that have been

6.1

traditionally public, are of public interest,

Introducing adequate regulations

or benefit from public funding. Accordingly,

and support policies

the cooperative principles that have been

The first set of recommendations concerns

elaborated by the ICA should be interpreted

the adoption of both consistent regulations

in a flexible way, supporting the emergence

that allow for the exploitation of cooperativesâ&#x20AC;&#x2122;

of new forms of cooperation and governance

competitive advantages and support policies

practices. Cooperatives should be treated according

that facilitate their start-up, expansion, and

25 conference report Promoting the understanding of cooperatives for a better world

to their special nature and be guaranteed a

Union and North America) and cooperative

level playing field with competitors (MĂźnkner,

movements in regions where cooperatives

2012). Similarly, the regulation of markets

still lack adequate recognition.

should be consistent with the character of cooperative enterprises and designed to maximize collective gains for society. This

6.2

issue needs to be addressed mainly by public

Developing consistent governance

agencies charged with market regulation

and management practices

responsibilities.

The second set of recommendations

Necessary areas of action include helping to

start

new

established

cooperatives,

regards the development of a consistent

supporting building

and principles of cooperatives. A stronger

capacity within the cooperative sector.

awareness by members about the intrinsic

National

that

features of cooperative enterprises should

business

be encouraged. The widespread practice of

services. In addition, national governments

altering the management of cooperatives

should develop consistent support policies

to that of for-profit enterprises should be

at all levels of government. Given their not-

reversed. To fully exploit the specificities of

for-profit orientation, cooperatives should be

cooperative enterprises and avoid cooperative

subject to more favourable fiscal treatment

enterprises being overtaken by for-profit

than investor-owned enterprises. However,

enterprises in the adoption of cooperative

while providing for legitimate tax breaks

behaviours, management practices more

and special benefits, cooperative legislation

consistent with the values and principles of

should

for

cooperatives should be adopted. Cooperative

cooperatives to prevent demutualization,

movements and universities should endeavour

such as asset lock rules. Against this backdrop,

to support new research on management

cooperative movements can play a key role

practices and governance models, and seek to

through umbrella organizations, federations,

develop the managerial skills of cooperative

consortia, and the development of ad hoc

leaders through innovative training and

cooperative funds supporting the creation of

university courses based on recent research

new cooperatives.

findings.

policies

cooperatives

Moreover,

should

have

include

and

management culture incorporating the values

access

specific

both

ensure to

obligations

national

and

local

The experience of cooperatives worldwide

governments and the cooperative movement

shows that the most successful cooperatives

should play a key role in building bridges

tend to operate together as a system of

between the cooperative movements in

enterprisesâ&#x20AC;&#x201C;federations,

countries and regions with a well-developed

groupsâ&#x20AC;&#x201C;to reap the advantages of scale

cooperative sector (e.g., the European

and provide member cooperatives with 26

conference report Promoting the understanding of cooperatives for a better world

consortia,

cost-effective technical and management

economic agents and the motivations driving

assistance, marketing and purchasing services,

their actions. Updated and homogeneous

training, and project planning. Nevertheless,

statistical data should be produced and

the tendency of cooperatives to grow in size

made available by research institutions and

should be carefully evaluated. In economies

statistical agencies, and new theoretical

increasingly based on knowledge, the most

approaches that can help explain the rationale

efficient enterprises may indeed be small

and competitive advantages of cooperative

and organized in networks; in this respect,

forms should be developed by universities

cooperatives have specific advantages such as

and research centres.

their embeddedness in local communities and

Drawing on the findings of recent research,

participatory forms of governance. An effort

measures that enhance the visibility of

to strengthen networking practices would

cooperatives should be promoted by national

help cooperatives achieve economies of scale

and international cooperative movements

and take advantage of growth opportunities

and public authorities. A more effective

that single enterprises would not otherwise

communication

be able to exploit.

research findings should be adopted by both

strategy

disseminate

the research community and the cooperative movements at all levelsâ&#x20AC;&#x201C;local, national,

6.3

and international. Cooperative movements should endeavour to raise awareness by

Promoting the visibility of cooperatives The third set of recommendations involves

public administrations, policymakers, and

specific measures and actions for supporting

communities about the contributions of

a better understanding of the rationale of

cooperatives to local economies and welfare

cooperatives and increasing their visibility as

systems. Finally, international donors should support

institutions fulfilling key economic and social

the political recognition of cooperatives

roles. Conference presenters highlighted the

especially in those countries that still lack

considerable scope for new theories that

appropriate legal environments for developing

can comprehensively explain the rationale

and supporting cooperative enterprises.

of cooperatives and identify how to better exploit the potential of cooperative action. Researchers

should

commit

themselves

to overcoming the fragmentation that has characterized cooperative studies and developing more systematic research that starts with realistic assumptions about both the mechanisms that can be employed by 27 conference report Promoting the understanding of cooperatives for a better world

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Ben-Ner, Avner and Ellman, Matthew (2012) ‘The Contributions of Behavioral Economics to Understanding and Advancing the Sustainability of Worker Cooperatives’, paper presented at the Euricse Conference in Venice.

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Valentinov, Vladislav, Tortia, Ermanno and Iliopoulos, Constantine (2012) ‘Agricultural Cooperatives’, paper presented at the Euricse Conference in Venice.

Worldwatch Institute (2012) ‘Membership in Co-operative Businesses Reaches 1 Billion’. Available online: http:// www.worldwatch.org/membership-co-operative-businesses-reaches-1-billion (accessed 26 July 2012).

Zamagni, Stefano (2102) ‘The Impact of Cooperatives on Civil and Connective Capital’, paper presented at the Euricse Conference in Venice.

Zamagni, Vera (2012) ‘Interpreting the Roles and Economic Importance of Cooperative Enterprises in a Historical Perspective’, paper presented at the Euricse Conference in Venice.

30 conference report Promoting the understanding of cooperatives for a better world

Acknowledgements

Euricse wishes to thank the authors2 of the papers presented at the Conference “Promoting the Understanding of Cooperatives for a Better World” for their outstanding contributions.

Avner Ben-Ner

University of Minnesota

Jacques Defourny

Johnston Birchall University of Stirling

Giovanni Ferri

Partha Dasgupta

University of Cambridge

Michele Grillo

University of Liège

University ‘Aldo Moro’ of Bari

Catholic Univ. of the Sacred Heart of Milan

Konrad Hagedorn

Henry B. Hansmann

Derek C. Jones

Humboldt University of Berlin

Yale Law School

Hamilton College

Panu Kalmi

University of Vaasa

Hans-H. Münkner Emeritus University of Marburg

Stefano Zamagni

University of Bologna

Ian MacPherson

Pier Angelo Mori

Emeritus, University of Victoria

University of Florence

Virginie Pérotin

Vladislav Valentinov Martin-Luther

University of Leeds

University in Halle-Wittenberg

Vera Zamagni

University of Bologna

Three papers were co-authored: Prof. Ben-Ner’s paper was co-authored by Dr. Matthew Ellman, Institute of Economic Analysis (IAE-CSIC) and Barcelona Graduate School of Economics; Prof. Defourny’s paper was co-authored by Prof. Marthe Nyssens, Catholic University of Louvain; Prof. Valentinov’s paper was co-authored by Dr. Ermanno Tortia, University of Trento, and Dr. Constantine Iliopoulos, Agricultural University of Athens.

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