Abstracts, Part 1

In May 1995 the Co-operative Congress took place in Warsaw
according the new co-operative law. The new National
Co-operative Council was elected in democratic election. Now,
the most urgent problem is to strengthen the co-operative
position on the market and its successful competition.

    This document has been made available in electronic format
         by the International Co-operative Alliance ICA

                        November, 1996



               26-29TH SEPTEMBER 1996, TARTU, ESTONIA

                            ABSTRACTS:  Part 1

                           OF CRAFTSMEN

AUTHOR :Eric BIDET, Revue des tudes coopratives mutualistes
          et associatives (RECMA), Centre d'appui au
          dveloppement de la recherche en conomie sociale
          (CADRE), representing the Groupement national de la
          coopration (GNC)

If we compare it to other kinds of co-operation like the
agricultural co-ops or the banking co-ops which are the main
French co-operative fields, the co-operatives of craftsmen
appear very small - they are only one thousand realising about
7 million FF of sales volume each year.

But in another way, the analysis of this co-operative field,
recently identified in the French co-operative law (Law of
1983 on "Co-operatives of family run firms"), shows that it
has been one of the most dynamic in the last 15 years. In a
sector particularly affected by the competition of large
companies (especially in the fields of distribution and
building), the co-operative form appears more and more as a
good way to face competition.

But in a field where the co-operative traditions and the
individualism are traditionally strong, the co-operation had
to wait until the decline of the professional trade-unionism
in the very recent years to really develop some large
structures. One of the main features of the recent evolution
is certainly the emergence of these large purchasing
co-operatives which shows a change of the function of the
co-operative and responds to the necessity for the craftsmen
to escape their traditional subordination to their suppliers.

The co-operatives of craftsmen, like the craft industry
itself, are traditionally strong in the building area but the
recent services (services to farmers, hairdressers,
taxi-driver) and in the food industry (co-ops of bakers and

Finally this analysis shows that the crisis that met the
national  federation of the co-operatives of craftsmen last
year was not a crisis of the co-operatives themselves but a
crisis of the second level.
Mr. Eric BIDET
33, rue des Trois-Fontanot
BP 211
92002 NANTERRE Cedex

tel : +33 1 47 24 85 97
fax : +33 1 47 24 88 38



Boxergrand 4D
tel : +46 8 44 40 96
fax : +46 8 24 40 96

I have recently made a study of member 1993 and 1994 annual
reports of the International Co-operative and Mutual Insurance
Federation (ICMIF). On the basis of this study, I have made a
number of recommendations for the social reporting of the
ICMIF members. The present paper focuses on two of my
recommendations for developing a model for social reporting,
suitable for co-operative/mutual insurers and, I presume, as
well as for other types of co-operatives.

The first recommendation concerns the need to elaborate Basic
Co-operative/Mutual Practices for insurance operations,
according to the demand of the ICA Tokyo Congress that the
specialized organisations should develop a set of basic
co-operative principles for directing the operations in the
various co-operative branches. Such a branch-based definition
of the true co-operative applications would make it easier to
defend and promote the co-operative identity and, most
important in this context, to monitor and measure compliance
with goals in a social report of activities.

In another recent study, I have interviewed four prominent
retired consumer co-operative general managers about their
experiences. In the present paper, I have summarized the
viewpoints of one of them, a co-operative insurance CEO, in
order to illustrate the kind of data that could be helpful to
elaborate Basic Co-operative/Mutual Practices in the field of
insurance and, possibly, as well as in other consumer
co-operative branches.

I have also made a study of statements of principles
concerning member economic participation in co-operative
/mutual insurance societies, that is, practices of surplus
distribution and equity considerations. Some results of this
study, based on papers presented at various conferences of the
ICMIF, are summarised in the present paper, to exemplify a way
to develop Basic Co-operative/Mutual Practices regarding mode
of operation.

The second recommendation concerns an important section of
co-operative annual reports, giving facts about employees and
education, in some countries called the "social balance"

The education of member/policyholder/consumers is traditional
principle for co-operative/mutual insurers. But in the social
reporting it is seldom indicated how co-operative/mutual
values are reproduced and how the co-operative/mutual logic is
recreated in the minds of employees and members/policyholders
through education.

As this is a major issue in social reporting, I summarise a
study made by Gurli Jakobsen, of crop insurance co-operative,
where the co-operative learning is done by doing, as an
example of badly needed development work in insurance
co-operatives and mutuals.

I think that the two recommendations together with the kind of
studies concerning identity, mode of operation and education
of employees and members, described in this paper, are good
ways to further develop the social reporting, not only in
co-operative/mutual insurers, but in other co-operative
branches, as well.


AUTHORS : Carlo BORZAGA; Alceste SANTUARI, Institute for
          Development Studies of Non-Profit Enterprises,
          University of Trento

The welfare state reforms are characterised by a general
decline of the public provision of social services and a
growth of private supply of these services with the subsequent
evolution of new markets.

These markets have some peculiar aspects the main of which is
the difficulty for consumers of controlling over the quality
of the services provided and for the managers to effectively
supervise the efforts of employees. If the supply of social
services is organised by traditional private enterprises it
easily suffers from a low rate of profit (due to the fact that
contracts are not complete)which managers will try to overcome
by lowering the quality of the service with a consequent
diminishing demand on the part of the public.

This one of the reasons that can explain the growth of
non-profit organisations in providing social and health
services. Among these organisations one may find also
co-operative societies. But also the co-operative societies
have undergone radical changes by moving from a
single-membership to a multi-membership or multi-stakeholder
organisational form.

In this respect, the co-operative society has been changing
its nature: it transformed itself from simply one of the
organisational forms provided by the legal system to a proper
framework by which to accomplish employment and economic
policies in different countries. This has been made possible
thanks to the particular form of the co-operative society in
which different classes of individuals can find their standing
and their actual position.

The paper will endeavour to show such a transformation in
Europe and in particular in Italy by taking into account the
recent developments occurred within the co-operative movement
and underlining the specific aspects of Italian social
co-operative societies as means of accomplishing the
multi-stakeholder company.

Mr. Alceste SANTUARI
via Inama 5
38100 TRENTO
tel : +39 461 88 22 89
fax : +39 461 88 22 94
e-mail : cavenago@cs.unitn.it



          University of Valencia, e-mail: Rafael.Chaves@uv.es;
          e-mail: sajardoa@mozart.econom.uv.es

La intercooperacion es una nocion bastante vaga que
historicamente ha suscitado un gran inters entre el
Movimiento Cooperativo (y la economoa social en general) a
nivel internacional. Sin embargo, su teorizacion ha sido
reducida. Es durante las dos ultimas dcadas cuando la
intercooperacion, o mas exactamente el concepto mas general de
cooperacion economica entre empresas ha sido crecientemente
estudiado. Esta ultima situacion no es ajena al nuevo contexto
economico, mas dinamico, incierto y competitivo.

En el sector de la economia social y cooperativa se han ido
perfilando historicamente dos polos de organizaciones en su
seno, con un amplio abanico de situaciones intermedias, los
cuales presentan diferentes logicas de cooperacion
El primer polo lo integran aquellas organizaciones,
generalmente mas antiguas y de mayor tamano, que, en su
proceso de adaptacion al entorno capitalista, dinamico y
crecientemente competitivo y mundializado, han tendido a crear
y articular estructuras intercooperativas de marcado caracter
economico-financiero (filiales, sociedades capitalistas
instrumentales, etc.) llegando a conformar autnticos "groupos
empresariales cooperativos". El nucleo a agente vertebrador de
estos groupos lo ha constituido generalmente una empresa
cooperativa productiva economicamente muy dinamica, una
entidad financiera a una federacion de este tipo de

El segudo polo lo constituyen las organizaciones que
espontaneamente, y generalmente sin conexion relacional
directa entre si, han ido surgiendo a lo largo y ancho del
tejido social y economico como consecuencia de situaciones de
defensa y adaptacion al entorno (restructuracion del papel del
sector publico, desempleo, concentracion emresarial
capitalista...), situaciones de satisfaccion de necesidades
que no han sido cubiertas adecuadamente ni por el sector
publico ni por el sector privado, y en menor medida, de
motivaciones ideologicas de ciertos grupos humanos. Este tipo
de organizaciones de economia social y cooperativa (ya sean
cooperativas, associaciones o sociedades laborales) son
generalmente jovenes, presentan un tamano pequeno o mediano y
se ven aquejadas de una serie de debilidades o
condicionamientos internos que las organizaciones del primer
polo han logrado superar.

En concreto estas debilidades derivan tanto de su caracter de
pequens y mediana empresa ( y por tanto necesitada de
financiacion, de servicios de asesoramiento, formacion, de
apoyo en la comercializacion etc.) como por su genuino modo de
organizacion interno que presenta problemas de gestion,
decision y de infradotacion en resursos humanos estratgicos
(Chaves y Bland, 1994). En general, existe un cierto consenso
a nivel cientifico sobre las dificultades de acumulacion, de
gestion y organizacion que presentan tales empresas en
relacion a las caracter estrictamente capitalista.

Es evidente que la logica de los procesos intercooperativos es
sustancialmente diferente entre las dos enteriores realidades.
En los procesos intercooperativos del primer polo destacaran
las dimensiones de caracter basicamente economico-financiero
(como los controles de segmentos amplios de mercado),
organizacional (estructuras de poder) y de relacion con los
otros dos grandes interlocutores de la economia, las medianas
y grandes empresas capitalistas de su sector de actividad y el
sector publico. En los processos intercooperativos del segundo
polo, que sin duda es el mayoritario y el caracteristico del
sector de la economia social y cooperativa son especialmente
relevantes los aspectos vertebracion interna y primera
edificacion de estructuras intercooperativas con unos
contenidos minimos de apoyo logistico (en gestion, formacion,

 En la comunicacion que se presenta se pretende identificar y
articular en una estructura analitica coherente los diferentes
factores que explican la activacion y posterior desarrollo (o
involucion) de un tipo particularmente interesante de
intercooperacion, aquella implementada entre las pme de la
Econom=8Da Social (el segundo polo anteriormente mencionado) y
que presenta un contenido economico. Este ultimo tipo de
procesos intercooperativos son los que, a menudo, si son
exitosos, se encuentran en el origen de los actuales grandes
grupos cooperativos, como por ejemplo M.C.C. - Mondragon
Corporacion Cooperativa - o los multiples grupos cooperativos

Faculdad Ciencias Economicas
University of Valencia
tel : +96 386 45 25
fax : +96 386 44 15
e-mail : Rafael.Chaves@uv.es


AUTHOR :  Assist.prof. dr Zofia CHYRA-ROLICZ, Co-operative
          Research Institute, Warsaw, Poland

This paper contains the analyse (political, legal,
socio-economic, statistics) of long lasting process of
adaptation Polish co-operatives to free market economy in
1990-1995.  Beginning of political changes to free market have
brought for co-operatives in 1990 the destruction of old
organisational structure (liquidation of central and district
unions of co-operatives), which was under strong influence of
communist party.  The government took conception to built a
new authentic co-operative movement from basis of primary
co-operatives, keeping the principle of full voluntary
participation in foundation new co-operatives and its

This strong outside interference of State have brought for
co-operatives very big and deep disorganisation, breaking of
economic links and loss of large parts of co-operative
property in towns and in countryside.  Co-operatives became an
easy goal for aspirations of privatisation expressed by the
part of co-operatives' leaders, former communist, which in the
new situation became free market businessmen, created limited
liability companies or joint stock companies instead of

The adaptation of co-operative law to the new political
reality lasted almost 3,5 years. It was a difficult political
fight for autonomy of co-operative movement, its own
self-government, guarantee against possibility of outside
interference in life of co-operative. The big step forward was
made when the common co-operative property was recognised as
private property of members. The property matters in
co-operatives were also sorted out, valorisation of members'
shares was done and affranchising of buildings and lands.

Assistant Prof. Zofia CHYRA-ROLICZ
Co-operative Research Institute
ul. Jasna 1
00-013 WARSAW

tel : +48 22 827 13 14
fax : +48 22 827 48 86


AUTHOR : Jean-Francois DRAPERI, Laboratoire Georges Friedman
(URA CNRS 2048)

This contribution crosses two lines of inquiry : one
concerning the relationship between the co-operative sector
and the capitalist sector, and the other concerning markets

It seeks to show how, in the present context of worldwide
trade, co-operatives can play major role in markets building.
They can define common rules and regulations among economic
groups, even when these are powerful multinationals. These
rules do not mean that co-operative practices will fall into
line with those of the multinationals.

The paper analyses vine production of champagne as an example.
This case shows that governments' retreat does not necessarily
lead to more liberalized markets. Rather, liberalisation
builds locally or regionally regulated markets. Thus, the
number of "appellation" productions in France is showing
unprecedent growth (there are 450 today) involving a varied
array of products like vine, cheese, butter, cream, poultry,
beef, fruit and honey. This sector generates an 80 billion
franc turnover (about 16 billion USD), 30 billion of which is
in export.

The paper demonstrates that between capitalist deregulation
and its strictly state-controlled or political opposition,
today as at the beginning of the co-operative movement, a
co-operative stance emerges which is at one and the same time
an alternative and a regulator. It is an alternative because
it offers something other that liberalism, it favours quality
products, the region and its local population, negotiated
marketing rules and does not flourish at the expense of
tradition. It is a regulator because it is a counterpoint to
capitalist growth. Even if its principles are opposed to
capitalism, the co-operative direction does not call into
question in any fundamental way either the dynamics of
capitalism or its non-egalitarian foundations. Nevertheless,
it considers the market not as a given, outside the workings
of the co-operative, but rather as a major strategic factor.
It holds that the market can be built and moulded by certain
behaviour on the part of the producer and the consumer, who
act together both in terms of power relationships and in terms
of negotiations.

Mr. Jean-Fran=87ois DRAPERI
CNAM Laboratoire Georges Friedman
55, rue Turbigo
75003 PARIS

tel : +33 1 48 70 84 86
fax : +33 1 40 27 29 91


AUTHOR : Judith FOGGIN-BROWN, University Northcumbria, United

Traditionally in England, personal care within the home and
the community has been regarded as women's work. Such work is
characterised as being both low-paid and low-status. the
choice for women has been between free labour within the home
and the community or paid labour through the public or private
sectors. Increasingly such work is being organised through the
social economy.

One of the reasons for this change has been the arrival of the
national health Services and Care in Community Act 1993. 85%
of care previously provided through social service departments
is now contacted out to competing organisations. Private care
providers have been at the forefront in terms of competing for
such contracts. recently co-operatives have emerged as an
alternative to the provision of care - referred to as "care

Research is currently being carried out with the support of a
local Co-operative Development association who are working
with recently formed care co-operatives. The project will
undertake a longitudinal study in order to produce a unique
record of the formation, organisation and subsequent
development of care co-operatives.

One of the co-ops involved in this study was specifically set
up as a response to changes made to governments legislation.
(i.e. aforementioned Care in Community Act) specific issues
that have been addressed whilst studying this particular co-op
include: accounts of individual motivation to becoming
involved in a co-op, training and development of co-op
members, role of members within the co-op, relationship
between co-op members and external bodies/organisations,
membership status of services user's, comparisons of care
provision with other care providers and longer-term
development strategies.

As well as the above, the research will consider how to co-ops
respond to both internal and external changes. How dependent
they are upon wider economic structures and to see whether
they overtly address the question of women's role in the
provision of care.

Social Sciences Research Centre


tel : +44 01 91 227 4605
fax : +44 01 91 227 4606


AUTHOR : Amir HELMAN, Ruppin Institute, Israel

After the two decades of commune regime (1958-1978) it was
decided to launch economic reform.

The commune or brigade-run enterprises were changes into
township and village enterprises (TVE), to separate the
government administration from the economic management.  The
share-holding co-operative system (SHCS) is a new experiment
which developed since 1988, in order to improve some of TVE's
internal drawbacks : to redefine the property rights of the
TVE, to improve the incentive mechanism and democratic
management and strengthen the role of entrepreneurs, and also
to attract the scarce resources.

By May 1990, the number of share-holding TVEs had increased to
204,000 or 12,4% of all TVEs.  In our three-year research in
China, which is generously financed by the Dutch-Israeli
Development Research Foundation we try to concentrate on 30
industrial co-operatives.

The research is focused on the privatisation process and the
ability of autonomous units to encourage motivation,
productivity, responsibility and democracy. Objectives are :
attempting to measure the success (or failure) of the new
share-holding co-operative system (SHCS); to investigate the
effects of the institutional reforms on the organisation,
productivity, entrepreneurship and incentive mechanism of the
co-operative; examine the level of democracy and participation
in the decision making process in the share-holding
co-operative; to compare the achievements of the SHCS with
other experiments of communities (mainly Kibbutzim and

We already visited in thirty six factories in two provinces,
and met with IGO managers, technicians and workers.
Our primary impression and conclusions are the main subject of
this paper.

Ruppin Institute
40250 Israel

tel : +972 09 68 30 23
fax : +972 09 68 76 04



In 1938 Carr-Sauders, Florence and Peers wrote in their book
on "Consumers' Co-operation in Great Britain" that "...The
most important step in the history of the consumers' movement,
after the founding of the Rochdale type of society, was the
setting up of federal organisations controlled, not by
individual members, but by consumers' societies. The modern
evolution of the movement is steadily increasing the
importance of the federal undertakings, in regard both to
trade done and, in case of the national wholesale societies,
to their influence on the economic policy of the movement as a

The federation aspect of co-operatives was on the agenda in
the inter-war years, and is here again today. This is probably
because the environment of the co-operatives are changing fast
and the co-operatives themselves are facing big challenges and
have to adjust to them.

This paper will especially focus on the federation aspect of
co-operatives and the challenges and problems of federative
organisation :

*    the characteristics of federations

*    the tensions and dynamics of federations and

*    different views on the role of federative organisations

The future of co-operatives still dependent on viable
federations, but the knowledge of and research on federations
are weak.

PO Box 44
tel : +47 229 58 800
fax : +47 226 07 774


AUTHOR : Dr Simeon KARAFOLAS, University of Macedonia, Greece

Despite the long tradition of co-operative credit, in Greece
the establishment of co-operative banks was permitted only in
1993 while in 1986 the creation of urban co-operatives which
would offer credits to their members without having the status
of a credit institution was permitted.

The emergence of the co-operative credit in Greece is the
object of this presentation. Three topics are presented :

*    the legislation regarding the urban co-operatives of
     credit (called credit co-operatives) and the co-operative

*    the consequences of the creation of legislative framework
     on the development of the examined institutions,

*    the reasons for which an important development of these
     institutions is observed.

The evolution of the legislation framework is examined as well
as the difference between the credit co-operative, and the
co-operative bank in Greece; the function of the first
institution is regulated by the Law 1667/86 for the Urban
Co-operatives and the function of the second is regulated by
the Act 2258/93 of the Governor of the Bank of Greece.

The co-operative banks can carry out almost all the banking
activities. On the contrary, the credit co-operatives can only
offer credit to their members using their co-operative

The creation of the legislative framework of 1993 caused a
strong interest in the creation of co-operative banks in
Greece, especially in the provincial towns. In a first step
this interest is expressed by the reaction of credit
co-operative which needs less share capital than a
co-operative bank; however, the principle aim remains the
accomplishment of the demanded share capital for the creation
of a co-operative bank. Already credit co-operatives or
co-operative banks exist in 25 towns in 25 departments in
Greece while in 1993 there were only 3 co-operatives of

Several reasons are mentioned to explain the creation of
credit co-operatives and co-operative banks in the different
regions in Greece; the main reasons which are common for all
the institutions are : first, to keep the saved capital in the
region and create an autonomous financial basis, second, to
support more efficiently economic sectors with a big economic
and social importance in the region, third, to support the
members of the co-operative banks.

Konitsis 15
tel : +30 331 65 670
fax : +30 331 27 297



The fundamental motivation of credit union is to provide
financial services to its membership. As a practical problem
there are a number of reasons why credit unions may achieve a
less that perfect balance in the treatment of borrowers and
savers. More specifically maintaining low loan rates may
reduce the credit union's ability to offer high dividend rates
while the maintenance of high dividend rates may require
higher loan rates. Consequently, the competing pull of these
two objectives may result in the emergence of conflict between
those credit union members who on the one hand are net savers
and those on the other that are net borrowers. Given that the
members of credit unions are in turn the owners, the member
group conflict could potentially result in preferential
treatment for one particular member group.

In some countries credit unions have open or community-based
membership policies. This leads to individual credit unions
competing with each other for members with the net effect
being that loan and dividend rates will tend to standardise
across the industry. In such environment and assuming that the
credit union industry has significant proportion of the
savings and loan market it is also likely that credit union
interest rates will be dictated by market rates. The open
approach to credit union membership is at odds with the
present situation in the United Kingdom, where the membership
of individual credit unions is defined in terms of a
relatively narrow and restrictive common bond, in that it
insulates credit unions from competition from other credit
unions, provides a greater latitude for the emergence of
preferential treatment.

A further factor which is likely to exacerbate the situation
vis a vis United kingdom credit unions rests with the
regulatory framework within which credit unions operate.
United Kingdom credit unions are subject to a ceiling rate on
both dividend payments and loan charges. Under such
circumstances it is not difficult to envisage how a bias might
emerge, although in this instance the bias, if it emerges,
will be borrower-orientated in form.

On a more positive tact if it can be shown that the United
Kingdom credit union industry is characterised by increasing
returns to scale this then implies that as credit unions grow
the destructive effect on membership cohesiveness of a
borrower-orientated, or for that matter a saver-orientated
bias, if it exists, is likely to continue, the decline in per
unit costs can be divided between both member groups.

In terms of the discussion format it is proposed that the
analysis commences with a literature review, the theme of
which is the potential conflict which arises between the
interest of members who are net savers and those who are net
borrowers. The methodology employed in both the calculation of
the benefits from credit union membership and the
identification of biases towards a particular member group
would then be detailed. An application of this methodology to
United Kingdom credit unions for the year 1994 would then be
undertaken with the main body of the analysis concluding with
an examination of whether the industry is characterised by
size efficiency gains.

Mr. Charles FERGUSON
Ulster Business School
University of Ulster
Cavehill Building
Cromere Road
County Londonderry
Northern Ireland

tel : +44 01265 3247 42
Fax : +44 01265 3249 14
e-mail : C.Ferguson@ulst.ac.uk

Mr. Donal McKILLOP
Professor Financial Services
School of Finance and Accounting
Queens University of Belfast
University Road

fax : +44 1 232 32 86 49