Trends and Challenges for Co-Operatives and Social Enterprises in Developed and Transition Countries
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Trends and challenges for co-operatives and social enterprises in developed and transition countries edited by Carlo Borzaga and Roger Spear © 2004° Edizioni31, Trento - ITALY ISBN 88-88224-19-4 Riproduzione vietata ai sensi di legge (art. 171 della legge 633 del 24 Aprile 1941) È vietata la riproduzione della presente opera e di ogni sua parte, anche parziale, effettuata con qualsiasi mezzo compresa la fotocopia, anche ad uso interno o didattico Finito di stampare nel mese di ottobre 2004 Da Legoprint S.p.A. – Lavis (TN) I libri di edizioni31 si possono acquistare sul sito: www.edizioni31.it CONTENTS 1. Introduction ...............................................................................................3 by Carlo Borzaga and Roger Spear PART 1 General analysis of the co-operative phenomenon ......................... 15 2. The evolution of the co-operative form: an international perspective .................................................................... 17 by Giulia Galera 3. Remembering the Big Picture: the co-operative movement and contemporary communities ............................................................ 39 by Ian MacPherson 4. Multi-stakeholder co-operatives and their legal framework..... 49 by Hans Münkner 5. The European co-operative society: a new step in European company law ............................................... 83 by Enzo Pezzini PART 2 Co-operative organisations’ development paths in advanced economies............................................................................. 97 6. From co-operative to social enterprise: trends in European experience............................................................... 99 by Roger Spear 7. The Italian experience: a legal framework in progress............ 117 by Paola Iamiceli 8. A new co-operative form in France: Société Coopérative d’Intérêt Collectif (SCIC) ............................... 147 by Alix Margado 9. Solidarity co-operatives in Quebec (Canada): overview .......... 165 by Jean-Pierre Girard PART 3 Developing economic and social role of social economy organisations in transition economies ............................................... 183 10. Co-operatives in Poland: from state-controlled institutions to new trends in co-operative development .............. 185 by Ewa LeS 11. The evolution of co-operative principles and the emerging Third Sector activities in Serbia ........................................................... 197 by Maria Kolin 12. The Czech co-operative reality and its social aspects ............ 211 by Magdalena Hunÿová 13. The co-operative model in Bulgaria: prospects and problems of the social economy .............................. 229 by Maria Jeliazkova 14. How to develop the co-operative movement: the case of housing in Estonia.............................................................. 247 by Marit Otsing 15. Development of co-operative enterprises in Lithuania.............. 253 by Sigitas Bubnys and Dalia Kaupelyte 16. Economic substance and legal regulation of agricultural co-operatives in Hungary .......................................... 265 by Gabor Szabò and Alexandra Kiss TRENDS AND CHALLENGES FOR CO-OPERATIVES AND SOCIAL ENTERPRISES IN DEVELOPED AND TRANSITION COUNTRIES 1. Introduction by Carlo Borzaga * and Roger Spear ** Recent years have witnessed a new interest in co-operative organisations, especially as a consequence of their transformation and expansion in new fields of activity. These two phenomena are connected, since transforma- tion appears to be the prerequisite for expanding activities in new areas and as such, are worthy of specific analysis. In particular, the capacity of co-operatives to assume a number of forms consistent with the socio- economic environment in which they are situated deserves special atten- tion, as well as co-operative identity and the organisational and legal frameworks so far developed as a result of co-operative evolution. The description of this evolution in a number of important countries and analysis of this process, is the aim of this volume1; more specifically, co- operatives’ recent developments towards what are currently defined social enterprises within the co-operative framework2 will be examined. The volume takes on a wide perspective, looking at both Western and Eastern countries. On the one hand the new role of co-operatives in advanced economies is explored. As a result of the gradual withdrawal of public entities, owing to state budget constraints, co-operatives are in- creasingly turning into new welfare services providers in a number of countries. This has led to a number of changes at an organisational and legal level. On the other hand, co-operative development in transition * University of Trento, Department of Economics. ** Open University, Milton Keynes, UK 1 The volume includes the most innovative reports presented and discussed by the contributors of the International Seminar From Co-operative to Social Enterprise, held in Trento in December 2003. The Interna- tional Seminar From Co-operative to Social Enterprise was jointly organised by Issan (Institute for the Devel- opment of Nonprofit Organisations - www.issan.info) and the Emes Network (The Emergence of Social Enterprise - www.emes.net). We want to thank the authors of this volume, sponsors and organisers for their outstanding support. In particular, we want to thank the Fondazione Cariplo and the Region Tren- tino Alto-Adige. 2 Concerning advanced economies, the concept of “social enterprise” is used when referring to entrepre- neurial entities (co-operatives, associations, etc.) explicitly pursuing a social goal. See also the Emes definition: Carlo Borzaga and Jacques Defourny, The Emergence of Social Enterprise, Routledge 2001. Em- phasis is put on the evolution process, of which social enterprises represent the end result. With regard to transition countries, the concept of “social economy” seems to be more suited to designating the array of alternative organizational forms (among which co-operatives are here especially explored), which have so far developed. TRENDS AND CHALLENGES FOR CO-OPERATIVES AND SOCIAL ENTERPRISES countries is also investigated. In former socialist and communist coun- tries, co-operatives keep showing unexpressed potentials, but they are largely underestimated as compared to other organisational models (both capitalistic companies - normally preferred in the transformation of state enterprises - and other social economy organisations, included not-for- profit organisations like foundations). In order to tackle these issues, the volume is divided into three parts: - New trends in co-operative development - devoted to both explaining co- operative evolution and increasing the readers’ awareness of co- operative potentials; - Co-operative organizations’ development paths in advanced economies - above all addressed to investigating new co-operative forms and, more gener- ally, social enterprises; - Forthcoming economic and social role of social economy organisations in transition economies - concerning interesting evolutionary dynamics in Eastern countries. Particular attention is drawn by the first contribution by Giulia Galera, on the specificities of the co-operative model, traced back to the owner- ship assets, the pursuit of goals other than profit and the governance forms. Co-operatives are described as organisational forms capable of adjusting to the changing economic, social, cultural and political condi- tions, owing to their ability to reduce specific transaction costs caused by market failures in several sectors. The differences concerning the devel- opment of the co-operative phenomenon at the national level, are grouped into four “co-operative models”: - the mutualistic model: characterizes co-operatives claiming a strict promotion of the members’ interests; - the sociological model: characterises co-operatives more open to the community interest; - the in-between-model: refers to those systems where the mutuality concept, as asserted in the different legislation regulating co- operatives, has been open to different and often opposing interpre- tations, defending co-operative mutual nature or claiming co- operative social function; - the quasi-public model: co-operative organisations are perceived as public enterprises and their governing rules are dictated by public au- thorities. 4 INTRODUCTION Concerning the evolution observed in the models investigated in the recent decades, the main changes that have occurred are that: 1. the social orientation has overwhelmed the mutuality orientation in a number of countries; 2. a general evolution towards the production of general-interest- services has become evident; 3. co-operative attributes towards the provision of general-interest- services have been increasingly incorporated into the new co- operative forms. More specifically, it is the widening of the traditionally homogeneous social structure (single-stakeholder model), that is responsible for both the gradual fading of the mutualistic purpose and the enhancing of the self-help dimension embracing the community as a whole (multi- stakeholder model). Considering more generally the evolution of organi- sations pursuing goals other than profit (the so called “third sector”) as a whole, particular emphasis is put on the convergence of the organisa- tional forms, specifically the associative and co-operative. While the as- sociative form has become more productive, the co-operative form has gradually reduced its traditional goal of mutuality.