An international evaluation of social economy
by Louis Favreau, University of Quebec in Hull

 
 

(The following is a summary of the text written originally in french by Louis Favreau, "Un bilan international de l'économie sociale dans le champ de l'insertion")



The conclusions of the following text are drawn from the book Insertion et nouvelle économie sociale, un bilan international published in 1998 by Desclée de Brouwer, under the direction of economist Jacques Defourny, from the center of social economy (University of Liege, Belgium), sociologist Louis Favreau, from the chair of research in community development (University of Quebec in Hull), and Jean-Louis Laville from the national scientific research centre in Paris. This book will soon be published in English and Spanish.

The initial issues

The results presented in this book come from several researches that have been carried-out for five years in nine countries about the efficiency of social economy and integration with respect to unemployment and exclusion problems. During the last 10-15 years, local initiatives of integration have contributed in many ways to the creation of socio-economic networks combining market and non-market dimensions. However, what is the exact importance of this phenomenon in each national context? Is it only a new kind of "philanthropy" or does it hold a real potential of development for new social regulation? Is it the instrumentilisation of local action by government, or is it rather a real new answer to social needs? Finally, does this phenomenon represents a new contribution to democratic life?

The comparison was made possible by focusing on 5 major themes: 1) the evolution of labour market and public policies that combat unemployment; 2) the social and economic outcomes of cooperative and associative initiatives aiming integration; 3) the relationship between these initiatives and public policies; 4) the identification of facilitating or constraining conditions faced by these initiatives; 5) the areas of future endeavours.

The first important fact is that integration by putting people at work is not an isolated phenomenon. It doesn't initially derives from a public policy, and cannot be reduced to public programs of formation, or subsidies and others. But rather these initiatives do really emanate from local communities for whom these measures are insufficient. Quite often, these initiatives gave birth to new social enterprises, called also the new social economy.

The second remark is that social movements upstream stimulates mobilization (district organisations, unions, women's group...). Whereas movements downstream are opting for a diagonal logic combining professional formation, job creation and social intervention. In this case, public policies are sometimes facilitating, but often constraining since they are developed according to very specific target.

Also there is not a single model of social enterprise, but rather a set of three directions, sometimes in opposition, that have taken place. The first direction strives to create an intermediary type of economy. It is a very present model in countries where flexibility is strong such as in the United Kingdom. The advantage of this model is that it provides the unpriviledged groups with professional training. However, this orientation is too much focused on the classical labour market, and therefore only creates a transitory market.

A second way of intervention is to develop a sector of social utility combined with employment insurance, like in France. Here, the intervention relies more on public sector than market economy. The advantage: it gives a protected market. Disadvantage: a dependancy on social policies and the creation of precarious jobs.

A third situation, found in Italy and Quebec, places integration as a social experimentation area. That experimentation might regenarate the social economy, partly because then integration takes place into a strategy of local development combining several activities.

These initiatives can become perennial according to three or four main conditions: 1) first and above all, on the ability of public powers to acknowledge their usefulness; 2) on the capacity of associations and cooperatives to integrate an entrepreneurial behaviour in their activities; 3) on the capacity of big organisations holding economic power to support the development of social economy in new sectors (such as environment, domestic help, youth...); 4) on the capacity of union movements to invest their own financial resources into these initiatives.

What is the contribution of Quebec with respect to social economy? The constraints imposed by public powers are the same that the ones in Europe. The specificity of Quebec's experience is that social economy very often goes along with local development. The initiatives in social economy are stronger and more autonomous because first they are supported by development agent and local network of organisations that are facilitating cooperation between public, private and community sectors. Secondly because they have access to their own financial means. Third, these experiences can count on the involvement of big institutions such as union bank (Desjardins) and big union organisations.

All these national experiences show that economic integration is neither strongly institutionalized, nor at the stage of mere experimentation. Neither the recession, nor the initiatives are transitory. They are here to stay. However, four (4) major kinds of difficulties remain:

- first it is still difficult to get a real participation and make the most deprived segments in society become fully associate members, either because they are not themselves willing to, or because they are only involved on a temporarly basis on the projects.

- it remains difficult to develop an entrepreneurial culture when one has inheritated of an non-market culture based on public financing

- it is still ifficult to navigate between the Market and the State since they have developed their own practices and rules, and tend to reject, crush or assimilate foreign corpses.

- finally it is still difficult to bring public policies into adopting diagonal strategies: fragmentation and conflicts of interest still remain important.

This explains the different directions taken by the initiatives of integration in order to go beyond these difficulties:
market oriented strategies; strong pulic intervention; mix-financing and building solidarities between territories.

In the first case, it is assumed that people should ultimately integrate the private enterprise. However the private enterprise doesn't have anymore the recruiting capacities it used to have until the mid-seventies.

In the second case the perspective of a socially dedicated sector is meant not to abandon those who are in difficulty and give them the opportunity to participate in the economy. But only a few groups have access to this new non-market economy, at the risk of being marginalized.

In the last case the new territorial solidarities extend the scope of action by combining three economic dimensions: market, non-market and non-monetary. However these new strategies and new resources are continuously confronted to the institutional heritage of the past.

Plural economy and democratization: the challenges of the initiatives of integration and the new social economy

These three perspectives reveals different concerns that should not be systematically opposed. The target populations are too diversified, and the challenges too complex not to acknowledge the necessity of differentiated approaches.

However all these experiences are converging in the sense that they react against a reduction of the economy to the sole market. They claim for a plural economy in which market is still important but not unique. And it is in this context of a plural economy, combining market and non-market as well as non monetary components that they can combat a massive exclusion incompatible with democracy.

Many of these initiatives manage to reshape the Social State. Therefore we are advancing the hypothesis that these initiatives, once strongly organised, and while acting both autonomously and in partnership, could at least in generate in some countries new solutions to unemployment and Welfare State crisis. This new economy could occupy an intermediary space between State and Civil Society, between the economy and the social, between the local and the national, while keeping in sight the international. In a way, it could become an engine of transformation by broadening social and economic democracy.

The outcomes of an international research

We now try to incorporate the notions of local governance and general interest, as well as we try to bring a special attention to the relationship between social economy and public economy. Hence we will be discussing more and more the importance of a social economy in a renewed model of development of our society. Similarly we will start studying the place of social economy in developping countries in collaboration of the International Labour Organisation.