The Emilia Romagna region in northern Italy is one of the most prosperous in Europe, with one of the highest indices of social cohesion and social capital in the world.41 It also has an unusually high concentration of co- operatives and employee-owned businesses – over 7,500 co-ops, two thirds of which are worker-owned.42 Worker co-operatives are economically significant in the region, generating about 30% of GDP, and up to 60% in some cities, such as Bologna. In Emilia Romagna there are two kinds of employee-owned co-operative: traditional employee co-ops (the dominant type), largely in crafts, manufacturing and construction; and new social service co-ops that have emerged in part to fill a gap left by the state’s withdrawal from social service provision. Alongside employee-owned co-operative firms, largely in industry and manufacturing, there are large numbers of consumer-led co-operatives, especially in the services sector. (Under Italian law, employee-owned companies fall under general cooperative law,43 and are covered by legislation pertaining to co-operatives.) As in Mondragon, the ethic of employee ownership that developed particularly in the second half of the 20th century, has deep roots in local political and intellectual culture.44 The firms are part of a broader political economy, influenced by both Catholic social thought and leftist political ideas of democratic organisation, in the spirit of Antonio Gramsci.45 Emilia Romagna has been consistently run by the Communist Party (PCI), sometimes in coalition with the Socialist Party (PSI) since World War II,46 leading to its nickname as the ‘Red Belt’ of Italy.47 The strength of the regional identification with leftism, and the strength of Catholicism nationally, helps to explain why co-operatives and employee ownership are so firmly entrenched, both economically and socially, in the region. These political roots have remained strong, and co-operative federations (which are conglomerations of employee-owned and co-operative businesses) maintain strong affiliations to political parties.48 The three major federations (Lega, Confcoop, and Associazione) have

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