This report is the foundational report for the Alliance’s Doing Co-operative Business (DCB) project, which would evaluate the enabling environment for cooperatives in countries around the world. While the effects of policy measures and law on cooperatives 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 cooperative 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 cooperatives.
Income inequality is significantly and negatively correlated with co-operative performance. A stronger cooperative 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 cooperative performance in individual countries. In other words, it seems that the more democratic a society, the more fertile the situation for cooperatives will be.
