Rafael Chaves and Danièle Demoustier: The Emergence of the Social Economy in Public Policy: An International Analysis

A topical issue

This book edited by R. Chaves and D. Demoustier gives an international overview of the interaction between the social economy and public policy in two languages: English and French. It results from a working group under the auspices of the International Scientific Commission “Social and Cooperative Economy” at the International Center of Research and Information on the Public, Social and Cooperative Economy (CIRIEC). The book addresses a hot topic. For one thing, it provides the reader with rich insights about a form of economy that promises some resilience in a time of financial crisis. Second, it takes stock of the different regulatory social economy (SE) environments found internationally. Over the last few years, many countries have indeed adopted national laws on the SE. The crucial question now is: where do these new laws fit into public policy overall or how should they?

In some way, this emerging international institutionalization process suggests that the social economy is compatible with the public and the private economy. This process assumes that society needs intermediary groups between the individual and the state and the individual and the market. The authors show that broader recognition of an organized social economy in public policies overall is preconditioned on its visibility and image in the public eye. The social economy suffers indeed from fragmentation into different sectors, into multiple platforms and federations, and into various legal forms. Moreover, the social economy intersects with other concepts such as nonprofit organizations, third sector (services), solidary economy, social enterprise, etc. As a result, the CIRIEC seeks a common denominator for the field.

The book’s key virtue is to show that despite the diversity of national approaches, we can really speak of institutional recognition of the SE and the concurrent emergence of specific new public policies. This is very important and can be considered as an asset against the backdrop of a pervasive financial crisis marked by deepening inequalities, as demonstrated by Thomas Piketty’s recent study. ^[1] However, the book also explores how these policies are multiple, incomplete, and sometimes ambiguous. This is the case when SE-oriented public policies combine contradictory conflictual cross-sector provisions or further splinter the field by increasing competition rather than cooperation among SE actors.

A threefold contribution

The contributions of this book are threefold. First, it offers a unique international overview on the social economy and public policy. Research from different national institutional contexts facilitates a better overall understanding of the issues. Thus, CIRIEC researchers offer a first review of public intervention with regard to the entire social economy, delineating the scope and the limits of the policies implemented.

Second, the book shows how the social economy has entered into the political agenda. It demonstrates that the visibility of the social economy is related to indicators and the production of statistics. The book points out the role of think tanks, academics, and dedicated conferences to improve general knowledge about the social economy.

Third, the book addresses the main challenges faced by the social economy. One of them is its ability to span two alternative models: the first one embraces a solidarist approach to fragile populations, while the second one promotes a democratic perspective through a particular mode of organization. To resolve this contradiction, the authors argue in favor of integrating various players into the process of designing public policies. In this perspective, the scope of integration does not simply assume a pluralistic economy; it must also deal with pluralistic regulation of the economy. That is an important point. The authors show that, unfortunately, most political decision-makers do not yet appear ready to make a place for pluralistic regulation in the political agenda (regardless of the country).

Content

Two important questions run through the book. The first is: why have some policies that take account of the social economy emerged in certain countries and not in others? The second one asks how these policies have taken shape (scope, limits, instruments used).

The outline of the book is the following. The first two chapters describe the general approach of public policies to the social economy. The next three chapters offer a supranational and international approach. The final chapters describe the national and regional realities in five different countries.

In Chapter 1, Luc Bernier and Jean Turgeon show that one of the main challenges for the organization of the social economy is securing a meaningful influence in defining public policies. Citing the words of Berthold Brecht in In the Jungle of Cities, ^[2] the authors note that only survivors win battles. In other words, the possibility of exerting influence is related to the ability of social economy actors to work with public actors over the long run, like other organizations do.

In Chapter 2, Rafael Chaves analyzes the different justifications for public action (related to different conceptual frameworks) on the social economy. He also distinguishes different public policy instruments to promote the social economy. Soft policies aim to create a favorable environment, while hard policies are intended to intervene in the economic process using incentives. For the latter, the idea is to foster the competitiveness of the social economy on the supply side, and on the demand side to facilitate social economy enterprises’ access to public and international markets.

In Chapter 3, Enzo Pezzini and Karine Pflüger explore the commitment of the European Union to the social economy. The authors point out that the EU has acknowledged the importance of the social economy and especially its contribution to employment and regional development. However, the authors note that in defining the field, confusion about various terms still remains. Thus, European institutions have difficulties finding the exact boundaries of social economy. Whereas the value added of the social economy is officially recognized, social enterprises are still approached essentially with only a single objective in mind: social repair.

In Chapter 4, Leandro Pereira Morais presents a large panorama of the social economy in southern countries where the main issues are poverty, unemployment, and exclusion. The author observes in these countries the start of a phase where the State and civil society are entering into closer relationships. This phase can be characterized as pre-paradigmatic because the instruments of the policies are in the early experimental stages of development. After a discussion about the different typologies of these policies, the author discusses the challenges facing the social economy. The main issue now is how to transform these experiments into sustainable policies. The author argues that several conditions are required: a connection between the evolution of the social economy and the evolution of public policies, the institutionalization of a co-production process between the State and civil society, and a new legal environment.

In Chapter 5, Maria Eugenia Castelao Caruana and Cynthia Srnec specify a framework for understanding the SE in South America. Using a comparative analysis, the authors show that formal recognition of the SE is not only possible but also desirable in some countries in order to promote pluralistic economies that can overcome the inherent deficits of a conventional mixed economy. Here, the authors cite the emergence of new public intervention models in South America and they distinguish four approaches to analyzing the different public policies. The traditional approach is based on the traditional social economy and its main actors (such as in Chile). The hybrid approach is close to the traditional one but also includes some associative and solidarist practices (such as in Argentina and Uruguay). The dual approach considers the SE and the Social and Solidarity Economy (SSE) as well, but separates them by means of policies and regulations (such as in Brazil). Finally, the global approach is based on a more comprehensive vision of the SSE phenomenon at the legislative, institutional, and public policy levels (such as in Ecuador and in Venezuela).

In Chapter 6, Rafael Chaves and José Luis Monzon describe public policies affecting the social economy in Spain. They highlight a turning point in this country in two key areas: recognition of the social economy as a partner to government and the conception of a whole battery of public policies for promoting the SE.

In Chapter 7, Bakeren Bekaikaoa Azurmendi, Anjel Errasti Amorzarrain, Enekoitz Etxezarreta Etxarri, and Jon Morandiera Arca argue that the Basque public authorities conceive the SE as a group of companies that intervene in the market. Therefore, public policies are focused on cooperatives and labor companies. The main body of public policy affecting the SE is the Council of Cooperatives of the Basque Country. The tax policy is more favorable toward cooperatives. Thus, enterprises from the Basque SE have been able to generate more employment over the last two decades than others.

In Chapter 8, Daniele Demoustier analyzes the situation in France. She points out that to understand the SE in this country requires going back in its history. The political model of the French revolution was from the outset very centralized. The idea was that the State could directly take care of each citizen. Thus there was no place for intermediary organizations. Furthermore, French revolutionaries were wary of counter-revolutionary organizations and did not want to give them any institutional leeway. So France had to wait until the Third Republic in 1870 (after a first try in 1848) for stable acknowledgment of the freedom to associate. Thus, non-professional association was not permitted by law until 1901. The first institutional recognition of the SE came in 1981 with the socialist government, when Michel Rocard created an Inter-Ministerial Delegation to the SE, focusing on public policy with regard to cooperatives, mutual companies, and associations. In the 1990s, the focus started moving from institutionalized organizations to institutionalizing new ones. The idea was to tackle structural rigidities by fostering social innovation in the SE. In the 2000s a far-reaching process of decentralization now allows local authorities to rethink public policies toward the SE at the local level. Through the historical approach, Daniele Demoustier points out that in the French institutional context, the SE is perceived by public authorities more as a means to manage crises than to solve them. Thus, the influence of the social economy on public policies is limited. The new framework law adopted in France in 2014 concerning the SSE does not change this assessment. France still lags behind in translating this framework law into ambitious public policy.

The work of Nadine Richez Battesti and Francesca Petrella in Chapter 9 complements the paper of Daniele Demoustier by highlighting the decentralization process and the emergence of the SSE in local public policies. Their research is based on a region of South of France named Provence-Alpes-Côte-d’Azur (PACA). They show that the institutionalization process accompanies the elaboration of a regional program for the SSE, the recognition of the SSE as an economic actor, and the development of a statistical observatory. The regional program called Progress brings attention at the local level to democratic modes of governance, social and environmental benefits, empowerment of actors, innovation, and experimentation.

In Chapter 10, Dimitri Coutiez and François Moens analyze public policies supporting the SE in the Walloon region of Belgium. In this region, public policies are divided into two main groups: policies supporting the creation and development of companies that increase wealth, and other policies that are more specific such as employment of workers with few qualifications, facilities for recycling of waste materials, and the development of local services. The authors note that legislation has not succeeded in creating a regional label. Because of their diversity, all actors of SSE were not ready to unite under one name and the label failed to offer distinct advantages to the actors. The law was also intended to promote an alternative economic model. But its application actually put aside the purely alternative initiatives that could not be related to state aid. This example is interesting because it highlights the complexity that public policies have to address.

The chapter by Roger Spear explores the diversity of SE experiences within Europe. He observes the importance of recognizing civil society’s contribution in mixed economies to public service provision and to developing cooperative mechanisms for negotiating institutional change. He also points out how policy narratives play an essential role in supporting the development of policy coalitions and in legitimizing the SE within broader state policy agendas.

Finally, in Chapter 12, Hajime Himamura argues that Japan has not yet succeeded in establishing full collaboration between the SE and public authorities. The reasons are twofold. On the one hand, the Japanese SE is structured as a top-down institutionalized system of welfare services provision, meaning that nonprofit organizations are under governmental control and few can be considered as grass-roots democratic organizations. Second, the public, for profit, and nonprofit sectors all have their own entrepreneurial goals and their agendas do not converge. As a result, there is a failure in the coordination of governmental policy and local initiatives in Japan. The author argues that the SE should promote intra-firm cooperation for better local services provision.

Limitations and new avenues

To conclude, we point out two limitations of this book:

1. On form: In the field of social economy books published in two languages are very rare, and we want to thank the editors and authors for their effort. It is very important to provide content accessible in different languages when an international comparative analysis is involved. However, only two chapters – among the 14 papers available in this book – are accessible in both languages (French and English). This means that the reader who seeks a comprehensive grasp of the book must be fluent enough to read the four interesting chapters written in French that are not translated. For a French reader, six chapters are accessible only in English.

2. On content: The title of the book reflects the focus chosen by the researchers at the CIRIEC on social economy (SE). However, most of the authors refer frequently to social and solidarity economy (SSE). This shift from SE to SSE is a symptom of the difficulty of pluralistic economy actors to rally around the same flag. SE is related to historical institutions such as cooperatives, mutual societies, and associations with paid employees. SEE is more closely associated with small, voluntary and grass-root organizations, social movements organizations, or newcomers to the field. The diversity of the actors makes it difficult to find a universally applicable terminology.