The Weight of the Social Economy

← 8 | 9 → Acknowledgements

The present book is the result of the CIRIEC International working group “The Weight, Size and Scope of the Social Economy.” At the closing of The Weight of the Social Economy. An International Perspective, we would like to thank all the members of the working group for their collaboration and the quality of our conversations. We thank Édith Archambault and Université de Paris 1 Panthéon-Sorbonne for hosting the founding meeting of this group, as well as participants of that meeting (Gian Nicola Francesconi, International Food Policy Research Institute (Senegal); Karine Latulippe, Institut de la statistique du Québec (Canada)), and the contributors to this book for their valuable contributions. This book could not have been produced without the support of CIRIEC International staff, in particular Christine Dussart and Carmela De Cicco. We also wish to acknowledge Rafael Chaves, Chair of the CIRIEC scientific commission “Social and Cooperative Economy” until 2015, and the editors of the Social Economy & Public Economy series of P.I.E. Peter Lang: Benoît Lévesque (Université du Québec à Montréal, Canada) and Bernard Thiry (Université de Liège and general director of CIRIEC International, Belgium). Finally, we thank our translator and editor Cathleen Poehler for her professionalism and insightful suggestions throughout the process of finalizing this book.

Marie J. Bouchard and Damien Rousselière ← 9 | 10 →

← 10 | 11 → Introduction

The Weight, Size and Scope of the Social Economy

Marie J. BOUCHARD

Full professor, Université du Québec à Montréal, Canada

Damien ROUSSELIÈRE

Full professor, AGROCAMPUS OUEST, France

1. Objectives

There is a growing interest in statistics about the social economy. Throughout the world, the social economy plays an important role in job creation and retention, social cohesion, social innovation, rural and regional development, and environmental protection. In a number of countries, significant work has been done by national statistical agencies and by researchers (academic and institutional) to gather national and international data. Results tend to confirm the ability of the social economy to contribute to balancing economies, mainly by serving as an anti-cyclical force in the face of economic crises (Stiglitz, 2009; European Parliament and European Commission, 2014). The social economy is seen as having a strong potential in addressing global challenges in a renewed economy (Utting, van Dijk and Matheï, 2014).

Still, many countries and regions lack information about the social economy on their territory. Nor is there a harmonized body of data on the social economy at the global level. Moreover, a body of knowledge for promoting the importance of the social economy in the public realm has not been compiled to date. The purpose of measuring a phenomenon is to ensure its social and political recognition, namely to justify government support (Anheier, Knapp and Salamon, 1993). Here, public authorities and key players in the system have formulated requests to measure and evaluate the contribution of the social economy. Demands are made to identify the size and scope of this type of economy, especially during a ← 11 | 12 → time when other dominant systems seem to fail in their response to many social and economic needs (Stiglitz, Sen and Fitoussi, 2009). However, as noted by the Research Working Group of the 2014 Social Economy conference in Rome:1

Systematic data collection seems to be a common problem, and coordination between various statistical offices is required. Recurrent issues relate to the quality of statistics, and the absence of quality data in many cases. This seemed to be related to the lack of a clear definition in order to define the population within much larger datasets. The social economy has a large range of (often contested) meanings, and so this raises quantitative challenges (Roy, 2014).

CIRIEC (Centre International de Recherches et d’Information sur l’Économie Publique, Sociale et Coopérative / International Centre of Research and Information on the Public, Social and Cooperative Economy) decided to launch an international project on the production of statistics on the social economy.² The goal was to bring together contributions that are taking stock of knowledge on the production of statistics on the social economy. Called The Weight, Size and Scope of the Social Economy. An International Perspective on the Production of Statistics for the Social Economy, the project aimed to spur interest in the social economy and to get national statistical agencies to recognize the social economy as an important field to investigate longitudinally and in comparison with the “rest of the economy.” In this book, with reference to said CIRIEC project, we gathered expert opinions and advice about key issues regarding the statistical methods and indicators for the social economy. In particular, we wanted to know: Why is it important to have statistics on the social economy? How are they produced? How might we better understand the social economy in the future? The goal was to arrive at an overview of the current state of knowledge on these topics. The objective was not so much to describe the technical aspects of methods or tools but rather to discuss their contributions and limitations, and to identify avenues for future research in the field of statistical production. Overall, ← 12 | 13 → this book intends to help researchers and decision-makers embrace this topic with a better understanding of what is at stake.

2. Context

In recent years, considerable work has been done to map the social economy, work that nevertheless yields a wide range of notions of this type of economy and a variety of methodologies for grasping its weight, size and scope. This reflects the diversity of the economic and political contexts in which the social economy exists. It also reveals the competing development models in which the social economy is called to play a role and the different paths of its institutionalization. As many countries have recently passed national legislations on the social economy, future advancement in this field can be expected.

Pioneer research associated with CIRIEC in the early 1990s exposed the presence and relevance in various national settings of the social economy concept and outlined its core identity (Defourny and Monzón, 1992). In 1997, Eurostat published the Report on the Cooperative, Mutualist and Associative Sector in the European Union (Eurostat, 1997) and, in 2006, CIRIEC was commissioned by the European Economic and Social Committee to produce a mapping of The Social Economy in the European Union, which was updated in 2011 (Monzón and Chaves, 2008 and 2012).3 Another set of initiatives by the Johns Hopkins University on the nonprofit and voluntary sector in the late 1990s led in 2003 to the publication by the United Nations of the Handbook on Nonprofit Institutions in the System of National Accounts (Salamon, 2010). In order to build on and complement this handbook, the European Commission entrusted CIRIEC with the task of writing the Manual on the Satellite Accounts of Cooperatives and Mutual Societies. Published in 2006 (Barea and Monzón, 2006), the manual has so far been used by five European countries (Belgium, Bulgaria, the Republic of Macedonia, Serbia and Spain). Finally, recent research conducted for the European Commission produced a mapping of social enterprises in 29 European national contexts (Wilkinson, 2014).

All of these publications offer considerable knowledge about the sector and on how to measure it, with each addressing a particular aspect of the field. Some focus on the non-profit components (all voluntary non-profit organizations) and others on the market-based components (NPOs ← 13 | 14 → with commercial activities, cooperatives, mutual societies). Some exclude certain core components of the traditional social economy and concentrate on the new social economy or the solidarity economy, or cover a very wide spectrum of legal statuses, including for-profit enterprises that pursue a primary social aim. Methodologies and indicators vary from one study to another and include satellite accounts, national observatories, impact assessments (social, economic, environmental) and longitudinal and demographic surveys. From an international perspective, the social economy remains a polysemic phenomenon spanning a wide range of practices and notions (Lévesque and Mendell, 2005; Chaves and Monzόn, 2008 and 2012). For example, notions of social enterprise, social business and social entrepreneurship that began being in use as of the 1990s still carry a variety of meanings (Defourny and Nyssens, 2010; Wilkinson, 2014).

This makes it difficult to delineate and follow for statistical purposes the evolution of the whole of the social economy in a scalable fashion and in a way that allows for international comparability. Different tools and methodologies each have their own utility and limitations. Discussions about definitions might blur the legibility of the field, potentially undermining the social and political recognition of the social economy. In that context, it seems important to review the methods and their impact on the representations of the social economy, particularly in terms of outlining the field, nomenclature of activities and appropriate indicators. Lessons from these experiences have to be analyzed, especially in view of strengthening the capacity to develop coherent, rigorous and scalable information about the social economy as a whole and with respect to the nuances between the different notions or components of the sector.

3. Conceptual framework

This project adopts an open yet precise conceptual orientation. First, we have a broad definition of the social economy, allowing us to appreciate the scientific and empirical contributions brought forth by researches focusing on different components of the phenomenon. Second, while we recognize the value of standard economic indicators for measuring and comparing the social economy within national statistical accounting systems, we also acknowledge their limitations in assessing the full impact which the social economy has on the wellbeing of societies and communities. Third, we agree that these two issues – definition and methodology – are closely related, whereby a broad and open definition leads to a plurality of methodologies, and standardized methodologies to a clear definition. What is at stake is the trade-off between legibility and legitimacy, as ← 14 | 15 → social realities seem to be flattened or reduced when aggregated to satisfy the requirements of statistical treatment or, conversely, to leave room for misinterpretation or even ignorance when looked at as a series of unrelated phenomena. These issues justify the need for appropriate methodologies and indicators to quantify the social economy. They also explain the whys and wherefores of the debates about them.

3.1. Definition

Other than the technical aspects of measurement, quantifying a phenomenon involves having an accepted notion of what the subject is, valid indicators of how it can be recognized and distinguished from other empirical phenomena, and solid methodologies to compare it in different geographical, institutional and temporal settings.

The social economy is sufficiently distinct to constitute a “sector” or domain of the economy (Defourny and Monzón, 1992; Evers and Laville, 2004), recognizable as it is by its organizational characteristics, institutional rules and particular relationships with the state and the market. It refers to activities and organizations based on the primacy to people over capital. It borrows from yet also distinguishes itself from the capitalist economy and from the public economy by combining modes of creation and administration that are private (autonomy and economic risk) with those that are collective (associations of people), and its final aim is not centered on profit but on the primacy of the social mission over gain maximization (mutual or general interest). Two conditions generally explain the creation and development of social economy organizations: the necessity to respond to unfulfilled significant economic needs or social aspirations; and the fact of belonging to a social group that shares a collective identity or common destiny (Lévesque, 2006; Vienney, 1994; Defourny and Develtere, 1999). The general consensus about the social economy is reflected in the definitions adopted by international networks such as the European Social Economy Charter4 or the European Parliament (European Parliament, 2009) and, at the national levels, by the recently adopted legislative frameworks on the social economy in Europe (Wallonie, France, Portugal, Spain, Greece), Latin America (Ecuador), North America (Québec) and those upcoming in various countries of the world, including in Africa and Asia. It is by and large agreed that the social economy includes cooperatives, mutual societies and associations, and increasingly also foundations. All share a number of principles that can be summarized as follows (Monzón and Chaves, 2012: 19):

← 15 | 16 → ■The primacy of the individual and the social objective over capital

■Voluntary and open membership

■Democratic control by membership (with the exception of foundations, as these have no members)

■Consideration of the interests of both the members/users and that of the general interest

■Defense and application of the principle of solidarity and responsibility

■Autonomous management and independence from public authorities

■Use of most surpluses to pursue sustainable development objectives, services to members and the general interest.

However, the association with the term and its scientific concept, mostly used in Latin Europe, Latin America and parts of North America, is not homogenous across all countries, especially when it comes to outlining and measuring the sector. This was observed across European Union countries (Monzón and Chaves, 2012: 38; Wilkinson, 2014) as well as within one and the same country, where the term and concept of the social economy is often used interchangeably with other terms and similar concepts. Among these are: solidarity economy, popular economy, third sector, nonprofit sector, voluntary sector, civil society sector, etc. In some cases, the social economy is not defined as a sector but rather as “a mode of entrepreneurship and of economic development.”5 Over the last decade, the growing number of references to the notions of “social enterprise,” “social entrepreneur” and “social business” has generated new questionings about the identity of the social economy and the foundations on which it is built.

This is also reflected in the approaches by which the social economy is defined. The social economy may be defined from a number of angles. Among these are its definite or indefinite (hybrid) juridical components (Desroche, 1983); its rules of functioning, which have both similarities ← 16 | 17 → and dissimilarities with public or other private economic entities (Vienney, 1980, 1994); its dynamics of reciprocity and solidarity within a plural economy (Eme and Laville, 1994; Evers and Laville, 2004); its non-profit and voluntary character (Hansmann, 1987); its social and entrepreneurial character (Dees, 1998; Borzaga and Defourny, 2004; Nyssens, 2006); and its innovative function (Lévesque, 2006; Mulgan, 2006; Caulier-Grice et al., 2010). These approaches consist of more or less coherent and unified theories or paradigmatic fields (Nicchols, 2010). While some overlap with one another, others diverge in their essential orientation (Evers and Laville, 2004; Bouchard and Lévesque, 2015).

One assumption of this project is that the definition issue, notwithstanding its institutional or scientific importance, may distract attention from another important issue, that of the capacity to establish a comprehensive statistical overview of a reality that is becoming increasingly important for the future of our economies. Rather than proposing that one definition or theory is better than another, we argue that the social economy can be looked at through a variety of lenses, offering different field depths depending on which portion of the picture is of interest to the observer. We therefore use the term “social economy” in a broad sense to include associations (non-profit organizations or institutions), cooperatives and mutual benefit societies, as well as organizations that are recognized for their participation in the social economy, such as foundations, community economic development organizations, workers’ associations (e.g., sociedades laborales in Spain, informal workers-owned enterprises in Brazil) and other mission-driven enterprises. This project adopts an approach that encompasses social economy organizations and activities in a broad perspective (market and non-market components). In so doing, it also enables the identification of subsets in accordance with the definitions of the social economy currently in use at a broad level in given national settings.

3.2. Statistical indicators and tools

The social economy has a rich history. Taking various shapes, it is measured in a variety of ways in different countries (Monzón and Chaves, 2012) and in different studies (Bouchard et al., 2011). Measuring and evaluating the social economy is a complex process due to its very nature, which poses challenges.

A first challenge is that even though standard measurement techniques capture part of the social economy, another part of it remains difficult to grasp. The social economy contributes in very specific ways to the economy and society. However, since the social economy often participates in new or underdeveloped sectors of activity, its contribution may even fall “under the radar” of observation. In a challenge to standard classifications, it associates an economic activity with a social purpose and ← 17 | 18 → proposes innovative ways of doing things that correspond to values of equity, equality and social justice. Hence, applying standard statistical tools does not easily account for the identity and operating mode of this sector of the economy, which is multiform, permeable with other sectors (with emerging hybrid forms of organizations) and complex (combining social missions with economic activities). The weight of the social economy extends far beyond its contribution to job creation, GNP and economic added value. In addition to the many spillovers and externalities it generates, a large part of what it produces does not yet have quantifiable and agreed-upon measures.

Another issue is that the production of statistics for the social economy tends to relate to broader concerns about national accounting and the evolution and role thereof in policy planning. Historically, statistics have always cumulated the characteristics of a proving device, greatly based on mathematical formalism, and of a coordination device, implemented namely by administrative registers and national surveys (Chiapello and Desrosières, 2006). As the etymology of the word statistiks reveals (Desrosières, 2008), the statistical line of reasoning lies between science and government. The social legitimacy of statistics was established not so much from the formal methodologies for producing them but from their capacity to be considered as a prerequisite for decision-making in vaster sociopolitical projects. Yet, critiques have been expressed about the manipulative use of statistics by government (Data, 2009) or the inadequacy of economic indicators to actually reflect the performance of economies (Gadrey and Jany-Catrice, 2012).

Because producing statistics about the social economy has only become of interest in the past two to three decades, the stage at which we are at the moment is probably similar to that of other topics or phenomena, such as unemployment (Salais, Baverez and Reynaud, 1986), immigration (Fassmann et al., 2009), racial origin (Fassin and Simon, 2008) or visible minorities (Beaud and Prévost, 2009), which appeared only recently and are recognized in some jurisdictions but not in others. One might also think of the statistical definition of “small and medium-size enterprises,” which varies from one country to another and evolves from one period to the next. Statistical categories are indeed subject to debate and controversies. Added to this is the general warning against mistakes in economic policy that ensue from overestimating the explanatory power of numbers (La Documentation française, 2014; Ogien, 2013). Moreover, there is a growing resistance against the generalization of quantification as a mode of control of new public management (Desrosières, 2014: 34).

As any social phenomenon, the social economy is a social construct. Its quantification and measurement will result in the hardening of its ← 18 | 19 → definition and a decrease of any ambiguity about it, which in turn contributes to its legitimization. Yet, this same process will also reduce and flatten its complexity and richness, again prompting reflection about the appropriateness of definitions and methodologies. Thus, the production of statistics about any social phenomenon may become an issue, as it represents both an opportunity and a threat to legitimizing the field. This then calls for a solid social and reliable scientific construct of the social economy. That construct needs to be rigorous but also transparent and open to social actors’ participation in order to reach a high level of social legitimacy. The readers of this book should bear in mind, as they go through the different chapters, that this circumstance, or challenge, is not exclusive to the social economy.

4. Outline of the book

This book is composed of two parts. The first part examines methodological concerns and theoretical issues that need to be addressed and clarified in order to produce sound statistics about the social economy. The chapters look into indicators, qualification criteria of entities, classification systems and the international standardization of methodologies. The second part of the book explores what can be learned from specific studies. The chapters examine particular methodologies (satellite account, impact assessment, national surveys) and issues (research collaborations, informal and hybrid organizations) in different national settings (Belgium, Brazil, Canada, France, Japan and the United Kingdom). These cases, while not exhaustive, offer a good overview of some of the most important methods that are used and the questions that ensue when producing statistics on the social economy.

4.1. Methodological concerns in producing statistics on the social economy

The first part of the book begins by taking stock of how the social economy is presently being measured. We explore what representations ensue from the varied methodologies and examine the questions of identifying, qualifying and classifying the entities. We discuss issues of international comparison and of the appropriate measurement of the social economy production.

In the very first chapter of the book (Monzón), we pay tribute to the important contribution of researchers from CIRIEC in the conceptual and statistical marking of the social economy, particularly in Europe. This pioneer work owes to a large extent to researchers coming from the Spanish section CIRIEC-España, namely José Barea, José Luis Monzón and Rafael Chaves. This chapter summarizes work that led to the production ← 19 | 20 → of invaluable tools for producing and analyzing statistics on the social economy in Spain and in Europe.