CO-OPERATION AS COORDINATION MECHANISM a new approach to the economics of co-operative enterprises

Ermanno Tortia (University of Trento)
Carlo Borzaga (University of Trento)

Abstract

The economics of cooperative and social enterprises, as developed in the past and especially as referring to worker co-operatives, needs deep revision and refinement following the evolution of economic theory over the last decades. Traditional approaches are often based on hypothesis derived from mainstream theory and results are incoherent or inadequate to interpret the real behavior of these organizations. The main flaw is that economic theory has so far not assessed co-operation as co-ordination mechanism of the economic activity, especially in the organizational realm. Complementary, contemporary economic approaches did not deliver satisfactory interpretations of new and emerging phenomena, such as the spread of social co-operatives, social enterprises and other hybrid organization forms that do not pursue profit as their dominant objective (the exclusive interests of members). The stronger attention paid to this emerging literature in line with institutionalism, that are closer to new approaches and methodologies (especially behavioral and experimental economics) spread over the last decades. We aim at creating a new framework of analysis, and overcoming unsolved problems and unanswered questions, offering new guidance to empirical and experimental research.

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