Social and Solidarity Economy: Is There a New Economy in the Making?

Multiple global crises and heightened concerns about the social and environmental consequences of economic growth and liberalization have reignited interest in alternative production and consumption patterns, and ways of organizing enterprise activities. In recent years, considerable attention has focused on Social and Solidarity Economy (SSE). The term is increasingly used to refer to organizations and enterprises engaged in the production and exchange of goods and services, which are autonomous from the state and are guided by objectives and norms that prioritize social well-being, cooperation and solidarity. They include, for example, cooperatives and other social enterprises, mutual associations, women’s self-help groups, unions of informal economy workers, fair trade networks, and solidarity finance schemes.

Are we seeing in SSE the foundations of a new economy that not only significantly reduces the scope for negative social and environmental externalities associated with conventional for-profit enterprise, but also fosters equitable patterns of resource and surplus distribution and promotes social, cultural and power relations that can be considered democratic, empowering and emancipatory? As SSE expands, the organizations and enterprises involved often become more immersed in relations with markets and state institutions. How do such relations affect SSE? What forms of collective action and participation can ensure that closer interaction with both states and markets can facilitate, rather than undermine, SSE and its core values?

This paper examines these questions. It synthesizes the insights and findings of some 70 papers and think pieces prepared under the research project on Potential and Limits of Social and Solidarity Economy organized by the United Nations Research Institute for Social Development (UNRISD). Part I appraises the potential and limits of SSE as a means of addressing some of the major development challenges currently facing both people and the planet. It identifies various benefits of collective action and economic activities grounded in ethical values and active citizenship. It cautions, however, against romanticized notions of SSE that fail to examine numerous constraints and trade-offs that affect the expansion and reproduction. It goes on to identify a variety of pressures and dilemmas that confront SSE as it scales up and interacts with states and markets. Part II considers the key issue of how finance affects SSE, the potential of solidarity finance schemes and the issues that arise when scaling up. Part III examines the increasing role of the state in enabling SSE via public policy, law, development and social programmes, local government and supranational initiatives. It also considers different approaches adopted by governments, variations in outcomes and the ongoing challenges associated with the role of the state in enabling SSE. Whether or not state policy and interventions support SSE, and whether or not SSE organizations and enterprises can survive and thrive in the marketplace, depends crucially on the nature of collective action among the producers, consumers and citizens involved and forms of participation, claims making and bargaining. These aspects are examined in Part IV. A concluding section sums up some of the main findings and reflects on future prospects for scaling up and enabling SSE.

This review of the potential, limits and challenges associated with SSE suggests that policy makers and the international development community at large need to pay far more attention to ways and means of enabling SSE. This is particularly apparent in the current contexts of heightened risk and vulnerability associated with economic and food crises and climate change. it is imperative that organizational and enterprise models that are by their very essence integrative (in terms of simultaneously pursuing explicit economic, social and often environmental and empowerment objectives) receive the recognition and priority they deserve in national and international knowledge and policy circles concerned with development issues. This is particularly relevant now that the international development community is repositioning the notion of integrated approaches to development at the core of development thinking and policy making, and crafting a post-2015 development agenda centred on sustainable development goals (SDGs).

But meaningful policy change requires a reconfiguration of social and political forces, coalitions and alliances as well as democratic governance arrangements that enable effective participation of intended beneficiaries and their advocates. For these reasons, this paper emphasizes: (i) the importance of co-construction in policy design, implementation and review; (ii) issues of not only economic, but also political, empowerment through collective organization and mobilization of SSE constituents; (iii) federated structures and networks that connect SSE organizations across multiple scales; and (iv) broad-based coalitions between SSE entities, civil society organizations, social movements and political parties. Such developments are important not only for ensuring that local and national governments and legislators position SSE more centrally on the policy agenda, but also that the structural rules of the game or development strategies begin to change in ways that work for rather than against social and environmental justice.

Peter Utting is Research Coordinator at the United Nations Research Institute for Social Development (UNRISD) in Geneva. From September 2014, he will be International Coordinator, Center for Social Economy (CES), based in Managua, Nicaragua. At the time of writing, Nadine van Dijk was Research Consultant at UNRISD. Marie-Adélaïde Matheï is Research Analyst at UNRISD.