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The Politics of the Cooperative Sector in Developing Countries: Insights from Argentina, Brazil and Colombia

3 September 2013

The International Labour Organization and the UN Non-Governmental Liaison Service organized a series of think pieces by scholars and practitioners working on a broad range of issues within the field of Social and Solidarity Economy. This paper, written by Andrés Spognardi, focuses almost exclusively on Latin American countries and covers two main topics: the political economy of the cooperative sector, and the institutional and socioeconomic aspects of natural resource management.

Andrés Spognardi is an Argentine-born Italian political economist previously working at the Italian Institute of Human Sciences in Florence. In his paper, he says that although cooperatives are widely recognized as key drivers of economic and social development, the type and scope of the policies aimed at promoting the formation, expansion and consolidation of this form of social business vary considerably across the developing world. Even in countries with a long tradition of cooperative entrepreneurship, government policies toward the cooperative sector differ considerably.

“The question that naturally arises is: What accounts for such divergences? The broad political economy literature on policy decision making and policy processes suggests at least two possible explanations. On the one hand, advocates of the so-called “politics matters” school of thought contend that policy outputs are influenced by partisan variables. According to the traditional Left-Right characterization of the political spectrum, Leftist incumbents are driven by ideals and concerned with equality and progress, whereas Right-wing governments are mainly motivated by interests and tend toward inequality and conservatism (Bobbio 1997). On the other hand, promoters of the economic theory of regulation argue that political and regulatory outcomes are the result of complex interactions between the supply of government-bestowed benefits and the demand for those benefits by consumers and firms (Stigler 1971). From this perspective, the degree of concentration of a given industry is one of the major determinants of its ability to influence political and decision-making processes” says Spognardi.

Testing the theories: The cases of Argentina, Brazil and Colombia

This think piece examines whether it is possible to use the above mentioned theories to explain differences in the policy framework for cooperatives among developing countries. Are Left-wing governments more prone to support and promote the cooperative model of business than Right-wing governments? Do tightly-integrated cooperative movements exert more influence on public policy making than loosely connected or fragmented cooperative movements?

The experiences of Argentina, Brazil and Colombia over the last 20 years provide the ideal comparative setting to address these questions. Although the three economies share a long tradition of cooperative ownership and have relatively similar size cooperative sectors, the organizational configuration of their cooperative movements differs significantly, ranging from a tightly-knit vertical structure in Brazil to a highly fragmented one in Argentina. At the same time, the recent history of the three developing democracies offers an interesting mix of political ideologies. While Colombia has seen an uninterrupted succession of Right-wing administrations, Brazil and Argentina shifted from the Right to the Left in the early 2000s.

You can read the full version of the piece at http://www.unrisd.org/unrisd/website/newsview.nsf/%28httpNews%29/9B3CAABA45292E84C1257B1E005AC026?OpenDocument

Source: United Nations Research Institute for Social Development