SCOOP project 9.5: Cooperation, Cooperatives and Development
Work Package Work/Challenge: Reconciling Stakeholder Interests
Aim of the project
This project seeks to understand why citizens from different income and social groups cooperate in some contexts but not others. The United Nations declared 2012 the ‘International Year of the Cooperative’, and yet, the scholarship on cooperatively organized institutions, and how they impact socio-economic development, tell two different stories. One story is that the cooperative enterprise attracted members from different income groups and had positive impacts on inclusive development in Western Europe. Another is that cooperatives in the Global South were fraught with corruption and have prolonged socio-economic inequities since their inception. Whereas an established literature examines the sources of inclusive participation in Western Europe, the sources of conflict and inequity within cooperatives in the Global South are relatively unknown. The project, using an interdisciplinary approach and through a comparative analysis of cooperatives in India, Java and West Africa, between 1900 and the present-day will illuminate new avenues, and their policy implications, to explain this under-researched issue.
Western Europe has a long history of citizens organizing cooperatively in the face of challenges (De Moor 2015; Van Bavel 2021). The cooperative enterprise was in itself an example of resilient economic cooperation in the region. Case studies of credit cooperatives in nineteenth century Germany and the Netherlands, for example, show that cooperatives provided loans to borrowers from different socio-economic backgrounds, and played a central role in facilitating inclusive economic development for an extensive period of time (Banerjee et al 1994; Colvin et al 2020; Wolf and Suesse 2020). Recent research establishes theoretical underpinnings for why citizen-led cooperative organizations offer positive results for their members, focusing on levels of trust and information between membership groups (Vriens et al 2019; Buskens et al 2020).
Colonial governments attempted to transplant the cooperative model to British- and Dutch-ruled colonies from the early 1900s, a transplanted institution that has persisted to the present-day. Cooperative enterprises saw remarkable growth after their inception. Take India, for instance. The government installed the first cooperative in 1904. Today, there are over 850,000 registered cooperatives with a membership of over 290 million citizens (ICA). Despite this growth, the literature on cooperatives in Ghana, India and Java find pressing and persistent problems. Historians suggest that cooperatives developed into a mismanaged institutional network from the early 1900s (Van Zanden 2008; Kamenov 2019). Cooperatives excluded the poor, discriminated by social group and remained exposed to political influence across the twentieth, and into the twenty-first century (Goenka and Henley 2010; Mitra Kumar 2013; Nath 2021). Taking a historical approach and analysing cooperative enterprises from their inception in the early 1900s to the present-day will contribute to our understanding of the sources of problems and why problems persisted over time.
Bridging History and theoretical principles in Economics and Sociology, this project asks three interconnected questions: Did the cooperative enterprise see economic cooperation among members from different income and social groups? Why did cooperatives see large expansion and what impact did the expansion in cooperative enterprises have on long-term development? Findings from this project will explore themes including colonialism, law-making and trust in governments, trust between social groups, and barriers erected by social stratification, contributing to broader issues surrounding collective action, markets and institutional change. The project, thus, also contributes to the Connecting Communities challenge of SCOOP and studies institutional arrangements to avoid negative spill-overs.
The project considers where and for whom cooperative enterprises emerged, and aspects of participation in these enterprises over the long run, contributing both to theories on cooperation as well as the global history of cooperatives. The historical setting and availability of historical data allows for sufficient flexibility to incorporate a mixed-method and multi-disciplinary approach. The project will proceed in two stages.
In the first stage, the project will use novel data and qualitative material from government reports to analyze cooperatives in colonial contexts, from the first registered cooperative in the early 1900s to the end of colonial rule in the 1940s and 1950s. The project will use sub-regional, district-level data to consider the design of cooperative transplants in India, Java and West Africa, exploring relationships between different factors on types of participation in credit cooperatives. The project can develop this further by situating these findings against regional growth and inequality patterns.
In the second stage, the project will use data from government reports and surveys to explore the expansion of cooperatives from the end of colonial rule to the present-day. The project will consider whether technological advancements during the Green Revolution, changing political institutions and innovations in the financial landscape within each country affected underlying trust and conflict among membership groups in cooperatives. In this stage, the project will seek to develop a new database on cooperatives straddling both colonial and postcolonial times, and suggest areas of persistence and structural change in participation in cooperatives and the regulatory framework applied to the different types of cooperative enterprise.
- Banerjee, Abhijit, Timothy Besley, and Timothy Guinnane. "Thy Neighbor's Keeper: The Design of a Credit Cooperative with Theory and a Test." The Quarterly Journal of Economics109, no. 2 (1994): 491.
- Buskens, V., Corten, R., & Snijders, C. (Eds.) (2020). Advances in the Sociology of Trust and Cooperation: Theory, Experiments, and Field Studies. De Gruyter. https://doi.org/10.1515/9783110647495
- Colvin, Christopher L, Henderson, Stuart and Turner, John D. “The origins of the (cooperative) species: Raiffeisen banking in the Netherlands, 1898–1909”, European Review of Economic History, 24, Issue 4, (2020): 749–782
- De Moor, T. (2015). The Dilemma of the Commoners. New York: Cambridge University Press
- Goenka, Aditya., and Henley, David. Southeast Asia's Credit Revolution : From Moneylenders to Microfinance. Routledge Studies in the Growth Economies of Asia. London: Routledge, 2010.
- International Cooperative Alliance: https://coops4dev.coop/en/4devasia/india#:~:text=Summary,credit%20and%20non%2Dcredit%20sectors.
- Kamenov, Nikolay. "Imperial Cooperative Experiments and Global Market Capitalism, C.1900–c.1960." Journal of Global History14, no. 2 (2019): 219-37.
- Kumar, Sunil Mitra. "Does Access to Formal Agricultural Credit Depend on Caste?" World Development 43 (2013): 315-28.
- Nath, Maanik. "Do Institutional Transplants Succeed? Regulating Raiffeisen Cooperatives in South India, 1930–1960." Business History Review95, no. 1 (2021): 59-85.
- Van Bavel, B., ‘Wealth inequality in pre-industrial Europe: What role did associational organizations have?’, Forthcoming Economic History Review (2022), https://doi.org/10.1111/ehr.13137
- Van Zanden, Jan Luiten. "Credit and the Colonial State: The Reform of Capital Markets on Java, 1900–30." In Credit and Debt in Indonesia, 860-1930, 160-77. Singapore: ISEAS–Yusof Ishak Institute Singapore, 2018.
- Vriens, E., Buskens, V., & De Moor, T. (2019). Networks and new mutualism: how embeddedness influences commitment and trust in small mutuals. Socio-Economic Review, 19, 1149-1170. https://doi.org/10.1093/ser/mwz050
- Wolf, Nikolaus and Suesse, Marvin, "Rural Transformation, Inequality, and the Origins of Microfinance." Journal of Development Economics143 (2020): 102429.