05 Jan 2017
This report is the foundational report for the Alliance’s Doing Co-operative Business (DCB) project, which would evaluate the enabling environment for co-operatives in countries around the world. While the effects of policy measures and law on co-operatives must be assessed on a case-by-case and country-by-country basis, certain correlations exist between the vitality of the co-operative economy and the institutional environment in which it operates. These include:
- The co-operative sector is generally smaller in societies characterised by large inequalities and where power is captured in the hands of just a few people.
- A favourable general business environment (e.g. a higher General Doing Business Indicator according to the World Bank) is associated with better co-operative performance.
- Good governance conditions are positively correlated with co-operative performance.
- The perceived level of corruption in a country is negatively correlated with co-operative performance. A rise in perceived corruption presumably marks a deteriorating constellation for co-operatives.
- Income inequality is significantly and negatively correlated with co-operative performance. A stronger co-operative economy that is able to enact all seven Co-operative Principles could lead to a decrease in inequality and greater equity in a country.
- A positive relationship exists between the overall state of democracy (according to the overall Democracy Index of the Economist Intelligence Unit) and co-operative performance in individual countries. In other words, it seems that the more democratic a society, the more fertile the situation for co-operatives will be.