Sustaining Government Support for Social and Solidarity Economy
Author(s): Peter Utting
This post is part of a series of think pieces by scholars and practitioners working on a broad range of issues within the field of SSE. The series is one of several activities in the UNRISD inquiry on Potential and Limits of Social and Solidarity Economy.
Alternations of political parties in power and the rise and fall of political leaders raises the intriguing question of what happens when a government that has fostered an enabling environment for social and solidarity economy (SSE) is replaced by another headed by a party or leaders with less supportive inclinations. The institutionalization or sustainability of a pro–SSE policy environment is one of the major challenges confronting the development and consolidation of this form of economy.
Peter Utting is an UNRISD Senior Research Associate. He was previously Deputy Director of the Institute, where he coordinated research on social and solidarity economy and corporate social responsibility. Peter retired from UNRISD in 2014 and is currently International Co-ordinator at the Centro para la Economía Social, based in Managua, Nicaragua.
A promising development in the field of public policy for inclusive and sustainable development is the increasing number of provincial and federal governments that are taking steps to support the economic activities of organizations that also have explicit social, environmental and rights-based objectives—or what has become known as the social and solidarity economy (SSE). Often, however, such governments are associated with particular political parties and leaders that espouse left-of-centre or populist views. The constant to-ing and fro-ing of political parties in power and the rise and fall of political leaders raises the intriguing question of what happens when a government that has fostered an enabling environment for SSE is replaced by another headed by a party or leaders with more conservative or neoliberal inclinations. The institutionalization or sustainability of a pro–SSE policy environment is one of the major challenges confronting the development and consolidation of this form of economy.
Change in government = Change in SSE policy?
This question has taken on added urgency in Latin America, as the so-called shift to the left of the past decade or so shows signs of having run its course in a number of countries. The electoral victory of Mauricio Macri in Argentina in 2015, the power play that ousted President Dilma Rousseff in Brazil in 2016, the ongoing political crisis in Venezuela, and the likely departure of the government headed by the Citizens' Action Party (PAC) in Costa Rica in 2018, all raise questions about the sustainability of a pro–SSE policy agenda.
Will such shifts significantly alter the policy landscape as it relates to SSE? In some cases it is still too early to tell. In Argentina, key programmes like Ingreso Social con Trabajo (Social Income through Work) that channelled resources to cooperatives are, according to the official website, being "consolidated and not allowing new adherents". While the Ministry of Social Development has announced that such programmes will continue, procedural changes are favouring NGOs. Less clear is the future role of SSE constituents such as cooperatives and recovered factories.1
The Brazilian power play prompted the resignation of the prominent SSE leader and advocate, Paul Singer, who had headed the National Secretariat for Solidarity Economy (SENAES) since 2003. Its activities have been rolled back and its status as a state secretariat is in doubt. So too is the fate of the legislative bill supporting SSE. The multistakeholder consultative body for solidarity economy (Foro Brasileño de Economía Solidaria) has also been weakened, though it continues to be active in several regions.2
The political and economic crisis in Venezuela is likely to affect not only SSE in that country but also several others that participate in the regional cooperation scheme, the Bolivarian Alliance for the Peoples of Our America (ALBA). During the past two years there has been a major drop in the revenues mobilized through the sale of oil within the ALBA initiative, part of which supported SSE in several Latin American and Caribbean countries.
In Costa Rica, the declining power of the PAC administration runs the risk of diluting the content of the proposed framework law on SSE which is currently making its way through the Legislative Assembly. In the context of a fiscal crisis, the government is also hard pressed to mobilize additional financial resources for various SSE programmes. More worrisome is what will happen to the current pro-SSE policy environment when the PAC-led government leaves office in 2018.3
Institutionalizing SSE policy
What political and institutional elements need to be in place to ensure some continuity in a pro-SSE policy agenda when electoral competition results in a change of government? The case of Quebec, Canada, is insightful in this regard. Here the Parti Québécois (PQ), a traditional stalwart of SSE, lost the election in 2014 to the Liberal Party. Despite some setbacks—notably in relation to social housing and the role of both SSE daycare centers and the Local Development Centers (Centre local de développement / CLD) that had supported the development of social economy enterprises—a major reversal of pro-SSE policy did not materialize. Municipal authorities often continued to provide the services of the CLDs, albeit with less funding. For the SSE sector as a whole, the structure of social economy development poles in each administrative region ensured ongoing support.4 Furthermore, provincial funding for activities under the Social Economy Action Plan (Plan d'action gouvernemental en économie sociale 2015-2020), which is mandated by the 2013 SSE law, actually increased by CAD 100 million over five years.5
In Quebec, SSE policy has been institutionalized to a considerable degree. Leaving aside the question of state fiscal and financial capacity, the case highlights at least four political and institutional conditions that are key.
Law: State support for SSE needs to be locked in via law.6 This can be done at the constitutional level, as in Ecuador or Mexico, for example. It can also be done via framework laws, as in Quebec, that establish both principles and institutions for social dialogue, policy design and resource mobilization, and which call on the state to provide ongoing support. Many countries also have laws mandating the state to support specific sectors of SSE, such as cooperatives or social enterprises. Continuity is, of course, aided if and when such laws also stipulate concrete instruments for financing SSE, as occurred in relation to past laws supporting cooperatives and community development associations in Costa Rica. A key question for Brazil and Costa Rica is whether current legislative initiatives to draft laws supporting SSE will contain financial support mechanisms and ultimately be enacted.
Pragmatism: Many governments that are supporting SSE are doing so not because it is seen as an alternative to capitalist economy, but because it is a useful instrument for achieving basic development goals such as poverty reduction, food security, employment generation, small enterprise development and women's economic empowerment. Political parties of varied ideological persuasions increasingly identify with such objectives, not least in the context of the Millennium Development Goals (MDGs) and their successor, the Sustainable Development Goals (SDGs). New parties in power are likely to think twice about unravelling programmes that have demonstrated the role of SSE in social, economic and sustainable development. What is perhaps more likely is that programmes are reoriented towards NGOs, social enterprises and other small enterprises, as opposed to collective entities. Part of the advocacy work currently being conducted by SSE networks and social movements in Brazil, for example, aims to sensitize the new government to the role and utility of SSE.
Concerted action: The case of Quebec suggests the importance of another institutional arrangement for continuity, namely an established political culture of social dialogue or "concertation ", which in turn can facilitate the emergence of coalitions that might support SSE.7 Such processes and institutions for consultation and "co-construction"8 of policies were instrumental in ensuring that the 2013 SSE law received broad party endorsement.9 Where they exist, they are likely to inhibit the unravelling of state support. Costa Rica, too, has a long tradition of social dialogue but the current SSE agenda has created a number of fissures not only within the political class (including the PAC) but also within civil society associated with SSE. A related issue concerns the presence or absence of bureaucratic resistance to policy innovations associated with SSE. Continuity is facilitated once such innovations become "the new normal" within government bureaucracies. This, of course, is less likely when a pro–SSE agenda is promoted by an administration whose tenure is short-lived, as expected in Costa Rica.
Social mobilization: How social movements and networks related to SSE respond to political and policy change (whether real or suspected) is a key factor. Current mobilizations in Argentina have prompted the Ministry of Social Development to reassure citizens regarding the continuity of programmes. Similarly in Brazil, various social movements and networks are actively mobilizing to defend their interests and ensure ongoing state support for SSE. Pressure for change will, of course, be all the more effective when there is a broad-based opposition, involving social movements or networks and certain political parties, that is fairly cohesive. In contrast to Costa Rica and Argentina, Brazil and Quebec appear to lean more in this direction. A major concern in several Latin American countries relates to the weakening or fragmentation of parties more inclined to support SSE, as in the case of the Workers' Party in Brazil and the PAC in Costa Rica. The presence of intermediary organizations like the Chantier de l'économie sociale in Quebec, which acts as the voice for the SSE movement in negotiations and has developed a collaborative relationship with political parties and government, is also important.10
When all the above elements cohere, as they have to some extent in Quebec, the prospects for ongoing public support seem brighter. As José Luis Coraggio puts it, in such contexts, party policy becomes state policy. 11 Where key elements are missing, as in Argentina, Brazil and Costa Rica, such institutionalization or the sustainability of support seems far more problematic.
1 Personal communication with Susana Hintze, 10 September 2016.
2 Personal communication with Leandro Morais, 10 September 2016.
3 See Utting and Morales, forthcoming.
4 Personal communication with Marguerite Mendell, 19 September 2016.
5 Personal communication with Yvon Poirier, 10 September 2016.
6 Poirier 2016.
7 Arsenault 2016.
8 Mendell and Alain 2015.
10 Personal communication with Marguerite Mendell, 19 September 2016.
11 Coraggio 2015.
Arsenault, Gabriel. 2016. The Social Investment State and the Social Economy: The Politics of Quebec's Social Economy Turn, 1996-2015. Ph.D thesis, Department of Political Science, University of Toronto.
Coraggio, José Luis. 2015. "Institutionalising the social and solidarity economy in Latin America." In Social and Solidarity Economy: Beyond the Fringe, edited by Peter Utting, 166–182. London: Zed Books/UNRISD.
Mendell, Marguerite and Béatrice Alain. 2015. "Enabling the social and solidarity economy through the co-construction of public policy." In Social and Solidarity Economy: Beyond the Fringe, edited by Peter Utting, 166–182. London: Zed Books/UNRISD.
Poirier, Yvon. 2016. Legal and political recognition of social solidarity economy (SEE): An overview on SSE public policies and guidelines. International Network for the Promotion of Social Solidarity Economy (RIPESS).
Utting, Peter. 2015. "Introduction: The challenge of scaling up social and solidarity economy." In Social and Solidarity Economy: Beyond the Fringe, edited by Peter Utting, London: Zed Books/UNRISD.
Utting, Peter and Yasy Morales. Forthcoming. Políticas públicas para la economía social solidaria en Costa Rica: oportunidades y desafíos de la institucionalización. Paper to be presented at the ILO SSE Academy, 21-25 November 2016. San José, Costa Rica.