Identifying Interactions Between Contextual Factors and CSEs' Characteristics

The second phase of our analysis presented us with the challenge of having to identify unambiguous relationships between contextual factors and CSEs’ characteristics. The matrix shown in table 19.1 resulted from the steps outlined above. It is both a first finding of our inductive approach and an analytical framework for the next step of analysis. Final findings are presented in more detail in sections 19.3.2 to 19.3.4, where each subsection corresponds to a contextual dimension. The numbering of cells in table 19.1 alludes to the sequence in which findings are covered in sections 19.3.2 to 19.3.4. An additional perspective in our analysis concerned the link between the various contextual dimensions, on the one hand, and the choice of the cooperative form by social enterprises, on the other hand. Whenever elements about this perspective appeared relevant, we included them in the following subsections.

Overview of Interactions Identified

Table 19.1 outlines all interactions between contextual factors and CSE’s characteristics considered relevant in the CPs. The numbered fields indicate where the CPs gave sufficiently precise information about the relationships for further comparison and conclusions. Where fields are left unnumbered, this was not the case and more research is needed. This is particularly the case with regard to the manifold interactions between two contextual dimensions, namely “historical developments” and “new social movements”, on the one hand, and CSEs’ characteristics, on the other hand. Although the role of intermediaries was highlighted in several CPs, there was not sufficiently concrete information either about how these intermediaries (cooperative federations or agencies specialised in the promotion of SE) interact with CSEs’ characteristics.

Table 19.1 Analytical intersections between contextual dimensions and CSEs’ characteristics

CSEs’

^.characteristics

Contextual dimensions

Autonomy Membership composition

Types of goods provided (private, public, collective or individual)

Main source c revenue

Predomina-f nt activities

Main benefits/ beneficiaries

Participation in governance

Profit distribution

Historical developments

New social movements

Types of legal provisions for cooperatives (section 19.3.3)

8

9

10

10

11

12

13

13

Intermediaries

Social-economy-related or social policies (section 19.3.2)

1

2

3

4

5

6

7

Availability' of alternative organisational/legal forms for social enterprises (section 19.3.4)

14

15

15

16

322 Gdler von Ravensburg, Lang et al.

Cooperative Social Enterprises 323

Interplay Between Social-Economy-Related/Social Policies and CSEs' Characteristics

The CPs suggest that national, regional, local and sectoral socioeconomic policies do affect social enterprise in general and CSE in particular. While comprehensive national social-economy-related policies exist in Spain, France, Hungary and Poland (Katona 2014; KPRES 2014) and regional ones in the Quebec province in Canada and in Belgium, socio-economic policy measures in Italy, Germany, most of Switzerland, the US and Australia are less general and more issue related. Since literature differentiates these two approaches, we tried to identify interplay mechanisms for each. However, both use various combinations of subsidies and contracts for the provision of public goods and services. Some also entail specific laws governing social enterprise. Thus, on the functional level, we could frequently not differentiate between socialeconomy-related policies and more general social policies; the sample was also too small to do so. We indicated where differentiation was possible, such as in point (6), but overall, we thus confined our analysis to the question of whether socio-economic policies of any kind influenced the central characteristics of CSEs that we had identified. We elaborate on this in detail in the following list, numbering the paragraphs in accordance with the numbering in table 19.1.

  • 1. Our analysis does not support the assumption that public policies would automatically limit the organisations’ autonomy. However, the CPs indicate potential limitations of cooperative autonomy due to the representation of public bodies in the governance structure of CSEs in eight countries. In several countries, where CSEs are providing public services governed by social policies, these influence CSEs’ production processes. Overall, in all the countries analysed, CSEs seem geared towards achieving financial autonomy by generating at least substantial parts of their turnover from sales. Public policies at times influence this, as do other factors, such as legal barriers to market participation by social enterprises.
  • 2. There does not seem to be a link between public policies and the membership composition of CSEs. While France and Spain—two countries with well-developed social-economy policies—favour multistakeholder CSEs, these also seem to gain popularity in countries without central social-economy policies (e.g., Italy), and multistakeholder CSEs do not exist in Poland and Hungary, despite these countries having a central social-economy policy (Piechowski 2010).
  • 3. CSEs can provide private as well as merit and public goods. Naturally, social-economy policies (e.g., in France or Belgium) as well as socio-economic policies (e.g., housing policy in Austria and Australia) or sector policies (e.g., energy in Germany) aim at the

324 Gdler von Ravensburg, Lang et al.

production of public and merit goods. CSEs in countries without such policies are also found to produce public goods, but most likely to a lesser extent.

  • 4. As for the main source of revenue of CSEs, there are some hints in the CPs that countries with socio-economic policies to support social enterprise (and particularly with local or regional programmes) are precisely those where CSEs can generate revenue (grants and sales revenues) from public sources. However, except in the case of Italy (Borzaga et al. 2017 and Poledrini 2018), the available data are not strong enough to support a suggestion that the choice of legal form depends on socio-economic policies entailing public support.
  • 5. The link between predominant activities and socio-economic policies remains fuzzy. For example, the work-integration sector is a sector generally strongly dominated by social policy and encompassing many social enterprises. Yet, CSEs do not occur in greater numbers in this sector than in other personal services in nine of the twelve countries analysed. Furthermore, in the German-speaking countries (Austria, Switzerland and Germany) with well-established social policies for work integration, work-integration social enterprises (WISEs) hardly seem to operate in a cooperative form. In other sectors, the existence of socio-economic policies does not seem to be a precondition for the existence of worker cooperatives or cooperative service providers. At the same time, significant numbers of CSEs for local or regional infrastructure development seem to emerge without any or with minor policy-related support in some countries, including the German-speaking ones and Belgium. And a clear link can be seen between certain sector policies and the emergence of CSEs, such as in housing in Austria (Anastasiadis and Lang 2016), and energy, leisure and retail in less densely populated areas in Germany (Blome-Drees et al. 2016).
  • 6. Data from the CPs clearly suggest a link between social-economy-related policies—as distinct from other socio-economic policies—and the recognition of certain groups of main beneficiaries within CSEs, for example, disabled people. All countries with social-economy-related policies see CSEs as organisations addressing both the employment and service needs of members and non-members. By contrast, most countries without such policies—including Australia, the English-speaking part of Canada and the German-speaking countries—firmly see CSEs as organisations primarily benefitting their members.
  • 7. Participation of non-members in governance is possible in countries with and without national socio-economic policies. An example of the latter is the US, where many state laws allow government agencies and their representatives to be involved in the governance of CSEs. They can even be owners in purchasing cooperatives or shared-services

Cooperative Social Enterprises 325 cooperatives; public representatives can also generally be directors of cooperatives in some states. However, the literature at hand does not help to estimate how frequently this legislation is applied.

Interplay Between Legal Provisions Regulating Cooperatives and Characteristics of CSEs

Eight countries in our sample have cooperative legislation at the national level, with (e.g., in France) or without (e.g., in Germany) additional sectoral cooperative laws. In three countries, legislation on cooperatives is the responsibility of provinces and federated states (Canada, the US and Australia). Albeit to a different extent, France, Italy and Poland are relying on sectoral cooperative legislation. To fully understand the interplay of legal provisions on cooperatives with CSEs’ characteristics, it should be mentioned that, in some countries, a special “social-purpose” qualification was created for companies that want to underline their social aim. Depending on the criteria applicable, this can shape the character of social enterprise towards cooperative-like characteristics. An example is Belgium, where companies applying for such a qualification were first allowed to operate under any company legal form, but the criteria to be met in order to obtain the “social-purpose” qualification influenced the applying enterprises in a cooperative way. Since 2019, this legislation has changed and the cooperative is now the only legal form that may be combined with a “social-enterprise” qualification.4

8. The financial autonomy of CSEs seems generally high in our sample of high-income countries. Indications regarding possible limitations of this autonomy are rather connected to the representation of nonmembers, and especially of state representatives, on the boards of CSEs. In Poland, for instance, the law allows public agencies to become board members; they thus become part of the governance structure of CSEs. In some CPs, the presence of state representatives on the boards of CSEs is reported as related to an economic and cooperative history marked by disruption, and it is considered to have a significant influence on current decision-making processes within CSEs (Fekete et al. 2017). However, state representation on boards also occurs in several countries with a “continuous” cooperative history. For instance, the French collective-interest cooperative (société coopérative d’intérêt collectif, or SCIC) is subject to more public control than any other type of cooperative (Hiez 2013: 401). Similar observation has been made in some states in the US and provinces in Canada. There, it can be traced back to CSEs being involved in public (health) programmes. Yet none of the corresponding CPs report any challenges in autonomy.

  • 326 Gdler von Ravensburg, Lang et al.
  • 9. As far as membership composition is concerned, cooperative legislation in the countries studied seems to be based on open and voluntary membership and on members being the main beneficiaries. These findings concur with the principles of the International Cooperative Alliance (ICA). Yet, it also appears that wherever CSEs are the focus of social-economy-related policies (rather than of more general socio-economic policies), national or provincial legislation on cooperatives often stipulates that membership ought to include more than one interest group. For instance, French collective-interest cooperatives (SCICs)^ are multiple-stakeholder organisations with governance by several possible “colleges” (of employees, users, volunteers, local authorities etc); any physical or legal person who contributes to the activity can belong to one of these colleges. SCICs seem to have been modelled on the Italian social cooperatives (Hiez 2013: 400), which encompass similar multi-stakeholder governance.
  • 10. The types of goods provided and the main source of revenue of organisations are usually linked, to the extent that grants and subsidies are means to publicly finance collective goods, while sales are often linked to individual goods and services, be they purchased by private or public customers. Consequently, we decided to present the findings about the interlink of both these aspects with the occurrence of certain legal forms and in particular the cooperative one together. CPs suggest that grants, whether public or private, seem a great deal less important in CSEs’ revenue mix than sales. As regards the difference between public and private individual goods, only the Italian and French CPs suggest that the way in which company law, cooperative law or SE-specific laws regulate the functioning of CSE strongly determines whether CSEs deliver public and/or private goods.
  • 11. Looking at what CPs report on the interaction between national patterns or types of cooperative legislation and CSEs’ predominant activities, it becomes apparent that sectoral cooperative legislation frequently aims at sectoral activities such as work integration, agriculture or housing. French cooperative legislation is a prime example of this. At the same time as describing activities, such legislation usually also entails criteria for cooperative membership. Meanwhile, national cooperative legislation covering all sectors at once usually makes, at some point, special provisions for certain activities such as banking (see e.g., the German Genossenschaftsgesetz), or it is complemented by special acts (as e.g., in Poland) (Piechowski 2013). Additional literature suggests that, whenever national cooperative laws do not explicitly provide for the existence of a form of social-purpose cooperative, social enterprises are less likely to adopt the cooperative form.

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12. When analysing the main benefit/main beneficiaries of CSEs, we should first keep in mind that the traditional picture of cooperatives benefitting their members appears dominant. In general, a focus on members is of course present in consumer and agricultural cooperatives in many countries. The CPs analysed mostly discuss workers’ cooperatives and CSEs providing (social) services (e.g., care for handicapped people, child care, etc.)—that is, fields which are not typical of member-focused cooperatives. However, cooperative legislation does not make special provisions for such activities in all the countries surveyed—it does not make such provisions, for example, in Austria, Switzerland and certain provinces of Canada and Australia, where CSEs providing social services are not as widespread. However, CSEs of this type seem to be currently gaining ground, particularly in cases where common-pool resources tend to become neglected (see, e.g., the development of Swiss alpine-pasture cooperatives) or where social infrastructure is difficult to maintain on account of low population densities, as in the US or Germany (Blome-Drees et al. 2016: 102-103).

Interplay Between the Availability of Alternative Legal Forms for Social Entrepreneurship and Main Characteristics of CSE

Phase 1 results suggested there could be interrelations between the availability of alternative legal forms, on the one hand, and the membership composition, goods provided/main revenue sources and the predominant activities of CSE, on the other hand.

  • 14. Our analysis of the CPs reveals that, in virtually all the countries studied, SEs can adopt more than one legal form. In regard to membership composition, the cooperative form is usually chosen where the solution to a social problem requires people with different interests to come together (e.g., buyers, sellers and workers)—which seems to become increasingly frequent. However, this observation does not necessarily point to a comparative advantage of the cooperative form over other legal forms. Corroborating such hypothesis would require a comparison with the development of SEs under other legal forms, as well as a comparison between countries where the law provides for the existence of multi-stakeholder cooperatives and countries where it does not. Still, the indication that a link might indeed exist between the legal existence of multi-stakeholder cooperatives and the share of SEs using the cooperative form should be taken seriously. This contextual factor might prove just as strong, in terms of influence, as SE policies.
  • 15. The majority of CSEs in all the countries analysed produce private goods and services, and obtain most of their revenues from sales,

328 Gdler von Ravensburg, Lang et al.

regardless of whether or not alternative company forms can be used to organise SE activities. At the same time, the examples of Belgium and France suggest that a link might exist between the production of public goods and SEs using a cooperative form. In the US, Quebec, Germany, Austria, Switzerland, Hungary and Poland (Ministry of Family, Labour and Social Policy 2016), only a minority of CSEs provide public goods. At least for Austria and Germany, this can be attributed to national traditions: in these countries, other forms of organisations—namely not-for-profit associations—have traditionally been providing public goods for a long time (see, e.g., Heitzmann and Simsa 2004, as quoted by European Commission 2014a: 25). There are indications, for example from Germany, though, that a cooperatively organised provision of certain public goods might become more attractive, despite the existence of organisational alternatives. The evidence in the CPs is too scant, however, to come to any firm conclusions in this regard.

16. Whether the availability of alternative legal forms interrelates with the predominant activities of CSEs cannot be answered equally for all countries. In nine of the analysed countries, WISEs and SEs providing personal services are frequently organised in a cooperative form. Quite a different picture presents itself in Austria, Germany and Switzerland. In Austria and Germany, WISEs usually adopt the form of a (public-benefit) limited-liability company (European Commission 2014a: 6, 30 and European Commission 2014b: 35-36). In Switzerland, WISEs are usually organised as associations or foundations (European Commission 2014c: i). There are slightly more CSEs in Austria and Germany in the field of personal-services provision, while there does not seem to be any CSEs operating in this field of activity in Switzerland. However, in all three countries, there is a trend towards the emergence of CSEs for the maintenance of local or regional social infrastructure (Gonin and Gachet 2015: 31; Anastasiadis and Lang 2016: 15; Stappel 2017: 151-153).

This last observation points to two more general analytical results. First, considering the sum of interactions between this last contextual dimension and CSEs’ characteristics, it becomes obvious that there appear to be interactions between this contextual dimension and other contextual dimensions. And secondly, there are indications that the reasons to choose specific legal forms to suit a certain membership composition or conduct certain activities are most likely closely linked with socioeconomic policies, traditional welfare delivery structures and certain legal provisions for the cooperative form, rather than with the influence of sectoral cooperative and non-cooperative intermediaries and certain institutional path dependencies.

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