CALITATEA VIEŢII · Leandro Pereira MORAIS, Miguel Juan BACIC – Contrib uții ale economiei...

CALITATEA VIEŢII

Revistă de politici sociale

Anul XXXI • Nr. 1 • 2020

CUPRINS

ECONOMIE SOCIALĂ ȘI SOLIDARĂ

Claudia PETRESCU, Mihaela LAMBRU – Introducere: Economia socială şi solidară –

provocări şi perspective pentru dezvoltarea durabilă........................................... 3

Zdenko BABIĆ, Danijel BATURINA – Provocări actuale și potențialul economiei

sociale în Croația................................................................................................. 5

Claudia PETRESCU, Mihaela LAMBRU – Rolul întreprinderilor sociale în sistemul

românesc de protecție socială.............................................................................. 24

Arturo Luque GONZÁLEZ, Paul Renato Solís BENAVIDES, Maria Bertha

Aragadovay SISLEMA – Durabilitatea antreprenoriatului în cadrul economiei

sociale și solidare: o analiză a factorilor sociali .................................................. 46

Leandro Pereira MORAIS, Miguel Juan BACIC – Contribuții ale economiei sociale

și solidare la implementarea obiectivelor dezvoltării durabile și construcția

indicatorilor de evaluare: studiu de caz Araraquara, Brazil ............................... 70

CALITATEA VIEŢII, XXXI, nr. 1, 2020, p. 1–94

QUALITY OF LIFE

A Journal of Social-Policy Issues

Year XXXI • No. 1 • 2020

CONTENTS

SOCIAL AND SOLIDARITY ECONOMY

Claudia PETRESCU, Mihaela LAMBRU – Introduction: social and solidarity

economy – challenges and perspective for sustainable development.................. 3

Zdenko BABIĆ, Danijel BATURINA – Current challenges and future potentials of

social economy in Croatia................................................................................... 5

Claudia PETRESCU, Mihaela LAMBRU – Exploring the role of social enterprises

within the Romanian welfare system .................................................................. 24

Arturo Luque GONZÁLEZ, Paul Renato Solís BENAVIDES, Maria Bertha

Aragadovay SISLEMA – The sustainability of entrepreneurship within the

social and solidarity economy: an analysis of social factors ............................... 46

Leandro Pereira MORAIS, Miguel Juan BACIC – Contributions of the social and

solidarity economy to the implementation of the sustainable development goals

and the construction of evaluation indicators: the case of a settlement in

Araraquara, Brazil.............................................................................................. 70


SOCIAL AND SOLIDARITY ECONOMY

INTRODUCTION: SOCIAL AND SOLIDARITY ECONOMY – CHALLENGES AND PERSPECTIVES

FOR SUSTAINABLE DEVELOPMENT

CLAUDIA PETRESCU MIHAELA LAMBRU

The contribution of social economy organizations to the economic, social and environmental development is increasingly recognized at international level. A wealth of research is emerging constantly in this field. This special issue of Quality of Life Journal is dedicated to social and solidarity economy and its challenges and perspectives for sustainable development. The goal of this special issue is to approach and discuss the situation of social and solidarity economy at international level, in terms of opportunities and constraints for development.

A preliminary version of the selected articles included in this special issue have been presented and discussed during the workshops of the 7th CIRIEC International Research Conference on Social Economy “Social and Solidarity Economy ‒ moving towards a new economic systemˮ, June 2019. The CIRIEC conference was an opportunity for academics, practitioners and decision makers from 42 countries to discuss the latest research challenges and topics in the field of social and solidarity economy at international level.

This special issue on social and solidarity economy gathers four research papers focusing on topics such as social economy contribution to the implementation of sustainable development goals, social economy role in local development, social economy eco-system, the role of social economy entities in welfare system. The selected papers bring together an international perspective on social and solidarity economy development trends, by analyzing different approaches and case studies from Europe and Latin America.

The social economy eco-system from Croatia is presented in the article Current challenges and potential of social economy in Croatia. The authors analyse the trends and challenges of the social economy development in Croatia as the newest EU state. The paper provides an assessment of the current state of affair in the cooperative sector and social entrepreneurship, and an overview of the institutional context of the development of cooperatives and social enterprises. Based on the assessment of the social economy in Croatia and of EU best practices, the authors propose some solutions for the development of the social economy sector.


CLAUDIA PETRESCU, MIHAELA LAMBRU 2 4

The contribution of social enterprises to the welfare system reform is analyzed in the article Exploring social enterprises role within the Romanian welfare system. The presentation of a historical overview of the social economy organizations’ evolution in Romania shows that contemporary social enterprises are deeply rooted in social economy traditions and their present challenges and perspectives are strongly dependent on policy decisions and historical events that shaped their present condition. The development of the Romanian social enterprises is in tight connection with the evolution of the welfare state and the article explores the challenges of social enterprises specific roles within a post-transitional welfare system.

Two articles are analyzing the social and solidarity eco-system, and the relation to local development and sustainable development from two Latin America countries, Ecuador and Brazil. The sustainability of entrepreneurship within the social and solidarity economy: an analysis of social factors presents the Ecuadorian social and solidarity economy and analyses the social factors that influence sustainability of social enterprises. Taken into consideration that in Ecuador there is a significant waste of public and private resources on enterprises that fulfill no apparent social or economic purpose, the authors analyze the internal and external factors that influence the sustainability of social and solidarity economy.

The relation between social and solidarity economy and sustainable development goals is addressed in the article Contributions of the Social and Solidarity Economy to the implementation of the Sustainable Development Goals and the construction of evaluation indicators: the case of a settlement in Araraquara, Brazil. The article provides an analysis of a municipal social economy policy application in order to explain some of the necessary contributions to reach certain SDGs, and proposes a new set of indicators that can emphasize better the relation between SSE and SDGs.

CURRENT CHALLENGES AND FUTURE POTENTIALS OF SOCIAL ECONOMY IN CROATIA

ZDENKO BABIĆ DANIJEL BATURINA

he social economy sector in Croatia has been neglected for a long time and has not been recognized as a space for sustainable jobs and the development of a more inclusive

and cohesive society, as is the case in many Eastern and Central European countries. On the other hand, social entrepreneurship is a relatively new phenomenon established in this century. The aim of this paper is to assess the trends and challenges of social economy development in Croatia as the newest, last EU member state. On the basis of a secondary data analysis, the paper scrutinizes trends in social economy development. Social entrepreneurship is analysed as a part of the social economy that is strengthening, as well as the economic activity of associations that tends to turn into a social economy or a solidarity economy. The paper will also give an overview of the instances of the institutional context of the development of cooperatives and social enterprises, such as the recent legislative and policy changes, as well as the institutional framework with some insights into recommendations how to promote the development of the social economy sector in Croatia.

Keywords: social economy; cooperative sector; social enterprises; Croatia.

INTRODUCTION

Over the past decades, surpassing its quantitative significance, the social economy has not only imposed its ability to significantly contribute to resolving new social problems, but has also strengthened its position as an institution necessary for stable and sustainable economic growth, harmonizing services with needs, increasing the value of economic activities that serve social needs, more equitable distribution of income and wealth, correcting imbalances in the labour market and, in short, deepening and empowering economic democracy (Monzon and Chaves, 2016).

Adresele de contact ale autorilor: Zdenko Babić, Danijel Baturina, Faculty of Law, Zagreb University, Nazorova 51, 10000 Zagreb, Croatia, e-mail: [email protected].


T

ZDENKO BABIĆ, DANIJEL BATURINA 2 6

The social economy sector in Croatia has been neglected for a long time and has not been recognized as a space for sustainable jobs and the development of a more inclusive and cohesive society, as is the case in many Eastern and Central European countries.

The aim of this paper is to assess the trends and challenges of the development of the social economy in Croatia as the newest, last EU member state.

The methodological approach used in the paper includes a desk analysis of a collection of secondary data based on available documents, reports, studies, strategies, and other documents relevant for social economy in Croatia and partly for the European context. Information on policies and their analysis, measures, financial instruments and information on the legal, institutional and financial framework will be used, as well as the data available from statistical databases and government institutions and offices.

After a short note on historical chronological analysis of the context of development of social economy in Croatia, this paper will analyse trends in social economy development in the last five years since Croatia became an EU member (2013‒2018). Based on an analysis of key indicators of the co-operative sector in Croatia, we will provide an assessment of the current state of affairs in the cooperative sector of the Croatian economy. On the other hand, social entrepreneurship is analysed as a part of the social economy that is strengthening as well as the economic activity of the associations that tends to turn into a social economy or a solidarity economy. It should be noted here that currently the social economy sector in Croatia mainly encompasses cooperatives and social entrepreneurship1 type of organizations. The analysis in this paper will be based on extensive desk research on current available data from the prior researches. In addition to some economic indicators, the paper will also give an overview of the instances of the institutional context of the development of cooperatives and social enterprises, such as the recent legislative and policy changes, as well as the institutional framework.

The final part of the paper will provide concluding observations on future trends in the development of the social economy in Croatia which we will compare them with the trends in EU countries, especially considering the report on the latest social economy developments in the European Union (Monzon and Chaves, 2016). The main obstacles for the development of the social economy sector will be identified, and key measures for policymakers how to tackle the aforementioned obstacles and measures to promote the development of the social economy sector will be proposed based on analyses of the best EU practice in the social economy.

1 Which are not a special legal form in Croatia but could be different types of organizations that satisfied certain criteria that would be described in the paper.

3 FUTURE POTENTIALS OF SOCIAL ECONOMY IN CROATIA 7

HISTORICAL ASPECTS OF THE DEVELOPMENT OF SOCIAL ECONOMY AND SOCIAL ENTREPRENEURSHIP IN CROATIA

Social economy Modern cooperatives in contemporary Croatia started to develop after the

collapse of feudalism in the mid-19th century. Before that, a type of so-called familial cooperatives existed in Croatia (Pejnović, 2016), but cooperatives in contemporary meaning of that term, started in Croatia on the island of Korčula with a credit-saving cooperative named ‘Blagajna uzajamne veresije’2 which was established in 1864 with the aim to provide a better financial framework for the development of agricultural and craft sector (Mataga, 2005). Cooperative members respected cooperative values and invested agreed amounts of money in their cooperative, which were then used to finance projects of cooperative members mostly in agricultural (fisheries, vineyard and agriculture) and craft sector on the island of Korčula at that time.

In that period (mid-19th century), Croatia was a part of the Austro-Hungarian empire and under Austro-Hungarian administration. More precisely, Dalmatia and a part of Istria were under the Austrian administration in the Dual-Monarchy, but Slavonia and Croatia (eastern and central part of Croatia) were under the Hungarian administration with a significant autonomy, especially in the judiciary, administration, education and agriculture. The aforementioned division had implications on the development of cooperatives at that time in Croatia. Thus, in Dalmatia cooperatives developed faster under the Raiffeisen influence. In that period, the legal framework in Croatia for cooperatives was the Austrian Law on Cooperatives from 1873. In Central Croatia and Slavonia an impetus for development of cooperative sector was made after the Catholic Congress which was held in Zagreb in 1900. The Promotional Committee for Founding Raiffeisen’s Cooperatives was founded and comprehensive activities were proposed at the aforementioned Congress. Two years later, the Croatian Agricultural Bank was founded, which gathered all the Croatian peasant cooperatives and started operation in Zagreb (Mataga, 2014).

By 1907, the Cooperative Alliance was founded in Dalmatia with over 100 active cooperatives at that time. The number of cooperatives significantly increased before World War I (394 cooperatives in 1911). On the other hand, in the region of Slavonia and Croatia at that time (the beginning of the 20th century until WWI), three different Cooperative Alliance were established (Pejnović et al., 2016): Central Association of Croatian Peasant Cooperatives which was founded 1911, Cooperatives which operated under the umbrella of the Croatian-Slavonian Economic Society and cooperatives that operated under auspices of Alliance of Serbian Agricultural Cooperatives in Zagreb. According to some sources, before WWI

2 English translation of the term ‘Blagajna uzajamne veresije’ – Mutual Aid Treasury.


around 1,000 cooperatives with 150,000 members operated in Croatia and Slavonia (Pejnović et al., 2016) part of Croatia.

Between the two world wars, the legal framework for cooperative development in Croatia stood almost unchanged and the aforementioned old Austrian Law on Cooperatives from 1873 still regulated the field. After WWI in 1918 Croatia moved from one nation alliance (Austro-Hungarian) to another, the Kingdom of Serbs, Croats and Slovenes which changed its name into the Kingdom of Yugoslavia in 1929. In the political arena the Croatian Peasant Party became very influential at that time and some of their leaders like the Radić brothers influenced developmental tendencies not only in the cooperative sector in Croatia, but also in general agriculture policy. So, under Croatian Peasant Party’s influence cooperative movement under the name ‘Economic Concorde’ was formed which significantly contributed to the development of cooperative sector in Croatia at that time. This positive framework for cooperative movement resulted in a significant increase in cooperative membership and, according to some research, in 1938 in Croatia more than 2,300 cooperatives were registered with more than 450,000 members (Mataga, 2014). In the beginning of WWII the Independent State of Croatia (NDH) was formed which banned all political parties, including the Croatian Peasant Party and a negative period for cooperative development in Croatia begun and followed after WWII during the socialist period.

After WWII, the socialist period started in Croatia with the development of state planned economy, collectivization and nationalization of private property and agricultural land, and abolition of market economy. Cooperative sector at that time was seen as a ‘market economy child’, so in that ambient socialist rulers created their own view of the cooperative sector in new socialist society. Consequently, they formed a new institutional framework for creating new ‘socialist cooperatives’ instead of those old forms of markedly oriented cooperative sector which was highly developed and vivid between the two world wars in Croatia. According to the new socialist legal framework created in 1946 and 1953, bigger and influential cooperative members were forced to ‘give their own private property such as agricultural land’ to new collective socialist cooperatives which followed the Soviet kolkhoz model. In reality that meant the end of the private cooperative sector in Socialist Croatia and the period of so called ‘socialist cooperatives’ started from 1946 (Pejnović, 2016). After some social changes within ex socialist regime in Croatia, according to some researchers (Novković and Golja, 2015), a kind of flexibilization was introduced after 1974 and cooperatives were allowed to serve as associations for self-employed farmers, artists or tradespersons, allowing them cost savings for supplies or easier access to markets. On the other hand, cooperatives in socialist Croatia were formed as associations of members sharing an economic interest and the socialist state promoted collectivism, which meant that Croatian cooperatives from socialist time did not follow some of the most important cooperative principles.


Due to the aforementioned and described socialist experience, negative influence and connotations about cooperative sector are still alive in contemporary Croatia. So, especially in the beginning of the transition process, the cooperative sector was seen by some policy makers as a socialist relict what definitely adversely influenced the development of cooperative sector which was discredited in the first ten years of transition to a market economy (last ten years of the 20th century). In contemporary Croatia the impetus for the development of modern cooperative sector started in the transition period with the first Law on Cooperatives, which was enacted in 1995. After that Law there were several changes in legal and institutional settings in the cooperative sector in Croatia, and the details are presented in the next section which deals with current trends.

Social entrepreneurship The evelopment of social entrepreneurship is a relatively new phenomenon in

Croatian terms, although social economy has a distinctive history as described above. Approximately 15‒20 years ago, the promotion of social entrepreneurial activity in Croatia began, mainly through foreign organizations3. The Anglo-Saxon school of social entrepreneurship was promoted, which can be explained by the donor-driven practice of foreign organizations (Vidović, 2012; Vidović and Baturina, 2016). The unfavourable environment for third sector initiatives is characterized by patron attitudes of the state, and due to the lack of modernization capacities in social policy (Bežovan et al., 2016.b) social entrepreneurship entered policy and practical agenda rather late.

The discourse on social entrepreneurship and social enterprises emerged around 2005 when the concept was “imported” from abroad, i.e., introduced by international organizations and donors (Vidović, 2012)4.

With the further development of the sector, particularly with the intensification of the EU accession process, understanding of social entrepreneurship in Croatia came closer to the EU approach. In the year 2006, the first conference “Emerging models of social entrepreneurship: possible paths for social enterprise development in Central East and South East Europe” was held. In the same year, a special issue of the online magazine Civilnodrustvo.hr on social entrepreneurship was published.

3 Although we may say that the opening of space for social entrepreneurship started with the welfare reforms in the 90s and Law on social care from the year 1997 that enabled other stakeholders than the state to be involved in the provision of the welfare services (Bežovan, 2008, Baturina, 2016). Besides civil society due to lack of available resources intensified discourse and start to plan self-financing activities and way to achieve financial sustainability (Vidović, 2019; Baturina, 2016).

4 We must shortly note the issues of terminology and their usage in the different policy fields. Both terms that mean social in Croatian and which are used for social entrepreneurship, “socijalno” and “društveno”, have some unpleasant connotations for different social groups: “društveno” evokes the collectivism imposed during the socialist regime, while “socijalno” evokes poverty, low income, and social assistance.


A year after the Conference on Self-financing Activities and Social Entrepreneurship in Non-Profit Sector was organized. At the end of year 2009, the first conference which specifically discussed social entrepreneurship in Croatia was organized (Šimleša et al., 2016; Vidović, 2012).

Since the early 2010s, many conferences, round tables, and panel discussions have been organized on the topics of social enterprises and social entrepreneurship. Several studies and books have also been published, and information tools created. Many of these dissemination activities have been organized with the financial support of the IPA (Kadunc et al., 2014). Annual assignment of Awards for Social Entrepreneurship was jointly organised by the Association for Creative Development SLAP (Waterfall), the Ministry of Labour and Pension System and Forum for development of social entrepreneurship (SEFOR)5. The first awards for social entrepreneurship were given at the beginning of 2012 and an award was also given the next year. After that, this practice has stopped. In 2013 the preparation for development of Strategy for the Development of Social Entrepreneurship in the Republic of Croatia for the period of 2015–2020 begun, and it was delivered in 2015 and was a key moment for the recognition of the social entrepreneurship in the Croatian context. The period from the delivery of the strategy till nowadays will be in focus in the next chapter where we will discuss current developments in the field.

SOCIAL ECONOMY IN CROATIA: CURRENTS STATUS AND TRENDS

Cooperative sector The first Law regulating cooperative sector in independent Croatia, Law on

Cooperatives, was enacted in Croatian Parliament in 1995 (Official Gazette, 36/1995). The law has introduced international cooperative standards and principles in the Croatian cooperative sector, but many important issues were not properly defined like cooperative property issues, minimum number of members, minimum member contribution fee etc. (Mataga, 2014). The next phase in legal and institutional settings happened in 2002 when Law on Amendments and Additions to the Law on Cooperatives (Official Gazette, 12/2002) was enacted. Aforementioned amendments from 2002 established a new cooperative umbrella organization called Croatian Alliance of Cooperatives (CAC) instead already existing Croatian Cooperative Alliance (CCA). This was not only a change of the name, but also the way and terms of operation that were provided by a leading umbrella institution aimed to promote cooperative sector development. Namely, in the previous umbrella organization (CCA) membership was on voluntary basis, but according to the aforementioned amendment from 2002 membership in (CAC) became obligatory,

5 Whose activities in the meantime declined.


what according to some authors ruined one of the basic cooperative principles that membership in cooperative sector should be open and voluntary (Mataga, 2014).

According to some other research (Tratnik et al. 2011; Nedanov et al., 2012), after 2000s aforementioned legal and institutional changes resulted in a sharp increase of new cooperatives mainly with the aim to benefit from different kind of state aid and subsidies which were directed towards cooperative ‘revival’ from different ministries, but without real know-how and real cooperative development motives. This upward trend created a superficial development in cooperative sector which was not sustainable. Moreover, very often motivation for creating new cooperatives was maximization of self-interest through using state subsidies which were directed towards cooperative sector development at that time rather than real cooperative development motives (Božić et al., 2019). Authors as, for example, Tratnik (Tratnik et al., 2011) suggest that the low requirement criteria (only three members were required to found a cooperative, and the minimum membership contribution was unspecified), resulted in a sharp increase with 571 new cooperatives that were founded in Croatia from 2000 to 2007 only (not including savings-credit cooperatives).

It was noticed that many of these newly established cooperatives were not operating and new amendments of the Law were introduced in 2011 with the aim to increase requirement criteria and also to demand new registration of all cooperatives in order to have a clear picture of cooperative sector6. The new Law of Cooperatives enacted in Croatian Parliament during 2011 (Official Gazette, 34/2011) stipulates minimal number of members increased from three to seven, minimum member contribution was also defined and all operated cooperatives had to align with new Law requirements within a proposed time limit7. Parallel with this increase in legal requirements, Croatian economy was hit by a sharp recession in 2009 which lasted for almost six years, but the hardest hit was in the first years so that macroeconomic framework for cooperative sector development was also negative during the period 2009‒2013 (Table no. 1). Finally, at the end of this consolidation process the number of cooperatives in Croatia decreased for almost 50%, the number of employees decreased for more than 35%, and the number of members more than 33% (see data in Table no. 1).

According to the last available data for 2016 (according to the Croatian Alliance of Cooperatives database), at the end of 2016 in Croatia 1,218 cooperatives operated with 2,595 employees and 20,500 members. Total revenues of cooperative sector amounted to around 220 million Euro in 2016 what was somewhat below 0.5% of GDP in Croatia, while in some EU countries (Italy for instance) the share in GDP is more than 10%.

6 To see the real number of operating cooperatives in Croatia due to the problem that many of registered cooperatives have not operated.

7 Also, this Act introduced social cooperative as an organizational form, which connected cooperatives more to the social entrepreneurship.


Table no. 1

Trends in cooperative sector in Croatia

31.12.2011 31.12.2012 31.12.2013 31.12.2016 COOPERATIVES (number) 2,060 1,069 1,169 1,218 MEMBERS 28,866 18,767 19,485 20,483 EMPLOYEES 4,246 2,680 2,743 2,595

Source: Croatian Alliance of Cooperatives database. Regarding sectoral development in Croatia, cooperatives in agricultural

sector are dominant, more precisely the agricultural and fisheries sectors’ share in 2016 in the total revenue of the overall cooperative sector was 70%. So, cooperatives are most dominant in agriculture, where 495 organizations (41% of total) operate with 7,580 shareholders (37% of total) and 1,208 employees (47% of total).

Trends presented in Table no. 1 suggest a mild revival of cooperative sector in the last few years in comparison with the data from 2012, what gives us an insight of a positive development, but these positive trends should be enhanced with proper policy measures and a possible Strategy for cooperative sector proposed by the government and enacted by the parliament.

Social entrepreneurship Croatian legislation does not recognize social entrepreneurship as a specific

legal term. However, the legislation does not prohibit it either (Spreckley, 2012; Vidović, 2019). Social enterprises can be active within the existing legal framework which is constituted from different acts that regulate cooperatives, associations, foundations, professional rehabilitation and business development8. The most general social enterprises forms are an association, cooperative, Limited Liability Company and in some cases private institution9. Only a minor part of these organizations are recognized as social enterprises, as it will be discussed below. They are not recognized as a separate legal form, but as a status that an organization has by the nature of its

8 Cooperatives Act, Law on Associations (OG 74/14), Law on Foundations and Funds (OG 36/95, OG 64/01), Law on Institutions (OG, 76/93, 29/97, 47/99, 35/08), Croatian Companies Act (OG 152/11, OG 111/12), Act on Professional Rehabilitation and Employment of Persons with Disabilities (OG 143/02, OG 33/05, OG 157/13), Public Procurement Act (OG 90/11, OG 83/13, OG 143/13), Law on Small Business Development Encouragement (OG 29/02, OG 63/07, OG 53/12, OG 56/13), Law on the Rights of Croatian Defenders from the Homeland War and the Members of their Families (OG 174/04, 92/05, 2/07, 107/07, 65/09, 137/09, 146/10, 55/11, 140/12, 33/13, 148/13, 92/14).

9 The Law defines an institution as an entity for permanent activities in the fields of general interest if they are not performed with the aim of making a profit. To be treated as entities engaged in the general interest, the establishment of the institution in the special fields requires approval from the state.


operations and its mission. However, the presence of legal inconsistencies is confusing and creates problems in the development of social entrepreneurship. In the recent research, organizations stated legal environment as one of the biggest barriers to their development (Bežovan, et al., 2016)10. More problematic is tax framework that should be improved by the measures of the strategy. It defines its non-profit status and privileges that organizations can use to enhance their activities. For economic activities which are the core of activities of social enterprises, tax framework is certainly limiting (Baturina, 2018).

In 2015, the first Strategy for the Development of Social Entrepreneurship in the Republic of Croatia for the period of 2015–2020 was adopted. The Strategy defines social enterprise as a “business activity based on principles of social, environmental and economic sustainability where gained profit/surplus is entirely or partly reinvested for community well-being” (Government of the Republic of Croatia 2015) The Strategy addressed four relevant dimensions: 1. legal and institutional framework, 2. financial framework, 3. education, and 4. visibility and recognition. The Strategy allocated around 35 million EUR to be available mostly through the European Social Fund operational programme (2014‒2020), which is a really big amount in comparison with finances available in the years before the strategy (Baturina, 2018). There are nine criteria for being a social entrepreneur established in the strategy and these criteria in significant aspects have similarities with the EMES approach (Defourny, 2001: 6‒8) and consider three dimensions usually ascribed to social enterprises (entrepreneurial dimension, social dimension, and governance dimension11). Organizations in different above mentioned legal forms that conform with those criteria are considered to be social enterprises12.

One of the first goals of the Strategy is to develop evidence (or registry) of social enterprises. For now, we do not have the exact number of social enterprises. The registration of social enterprises or social entrepreneurs13 will be based on several (nine) criteria. By fulfilling the required criteria, a social enterprise would be eligible for financial supports and grants, but in year 2019 this kind of registry was still not established.

Project iPRESENT (Šimleša et al., 2015) at the end of the year 2014 established 90 social enterprises. The research of Šimleša et al. (2015) noted that 14.4% of social enterprises had 0 employees, 40% had 1‒4, and only 6.66% had

10 Together with a lack of favourable tax treatment and as an especially important barrier increasing bureaucracy.

11 EMES ideal type approach was operationalized to be practically applicable in the Croatian context.

12 Organisations will prove their compliance with these criteria by their founding acts and business activities, annual work programmes and triennial strategic/business plans, annual reports on the realisation of the annual work programmes, and reports on social impact (Government of the Republic of Croatia, 2015). Practice form grant tenders for social enterprises has shown that those criteria are applied in a limited manner (Baturina, 2018).

13 They can also be physical persons.


more than 20 employees. Most organizations (81.1%) had incomes lower than 2 million HRK (around 262,123 EUR). The most recent estimates (Vidović, 2019) sugest the number of 52614. Among them15 the author states associations pursuing social entrepreneurship and relevant general interest that registered for economic activities (346), social cooperatives (20), veterans social-working cooperatives (35), cooperatives pursuing social affairs (33), privately owned foundations pursuing general interest activities and pursuing economic activities (5), companies funded by associations pursuing relevant general interest activities (50), other companies pursuing explicit social aims, operating not for profit (10), institutions funded by associations pursuing general interest companies (15), and sheltered workshops (7).

Some initial typologies of social enterprises were established. Vidović and Baturina (2016) recognize social enterprises driven by employment for vulnerable groups, the ones driven by income generation to ensure provision of their free services to beneficiaries, and those driven by innovative solutions to unaddressed social needs16.

Until recently, different governmental bodies and institutions were regulating the operation of specific legal entities17. No official governmental body was exclusively responsible for the development of social entrepreneurship. After the Strategy was adopted, the Office for Social Entrepreneurship was established as a central unit for SE sector. The Office is founded within the Ministry of Labour and Pension System, since this Ministry coordinated the process of Strategy development.

The front of this strategy was hard reality of implementation, which shows that stakeholders overestimated possibilities of development of the sector (Baturina, 2018). An institutional acknowledgment that happened in Croatia with the adoption of the Strategy for Social Entrepreneurship Development in 2015 increased expectations from different actors around social enterprise. However, poor implementation of the Strategy caused overall disappointment. The application of the nine criteria turned out to be too complicated, and institutional actors lacked capacity to implement the Strategy. Tenders that were supposed to be available

14 But they are based on specific criteria and methodology that are counting possible social enterprises, not the actual ones. A report will be published soon and it is part of Social Enterprises and their Eco-systems: A European mapping report.

15 Social enterprises are a minor part of the general third sector, for example, there are more than 52,000 registered associations in Croatia out of which only 346 are recognized as social enterprises, and more than 1,000 cooperatives of which social cooperatives are smaller part (Vidović, 2019).

16 Vuković et al. (2017) on the other hand recognize three types of social entrepreneurs: those coming from associations and identifying with civil society, those acting as professional managers and those acting as entrepreneurs.

17 Such as Ministry of Labour and Pension System, Ministry of Entrepreneurship and Crafts, Ministry of Social Policy (former name) and Youth, the Government Office for Cooperation with NGOs and the National Foundation For Civil Society Development.


from the strategy just did not happen18. In addition, political climate and an absence of political will to prioritize social enterprise development in the policy agenda characterize the current situation (Ferreira et al., 2019; Baturina, 2018).

At the policy level, there is a lack of horizontal coordination between the sectors and the ability to follow and recognise modernisation trends, which is particularly evident in the areas of social innovation and social entrepreneurship19. Europeanization capacities in this regard are modest (Baturina, 2018; Bežovan 2019). Despite the lack of institutional and financial support and existing legal disadvantages, interest in social entrepreneurship and social enterprises is still growing in several areas of the ecosystem. We are witnessing emergence of new social enterprises, new courses and educational programmes, some social enterprise incubators and accelerators and other financial and support programmes, developed mainly in an intermediary sector20 (Ferreira et al, 2019; Vidović, 2019). Civil society organizations are developing programs in wider conceptualization of WISE (acquiring skills-education, support to employment and social integration), and there are some WISE examples of good practice (Baturina, 2016; Baturina, 2018). In the third sector, social innovations are being thought out, by trying to articulate and suggest some new paths of economic development or the ways of entrepreneurial action (Baturina, 2016). In addition, the new areas of the solidarity economy in Croatia are not yet conceptualized, social supermarkets are one of the examples (Marić and Klindžić, 2018; Knežević et al., 2017). Orlić (2014) also sees solidarity groups as one of the developers of the solidarity economy initiatives21.

We may say that social entrepreneurship has past phases from donors-driven to provisionally state-driven (by means of the first Strategy) to bottom up driven. The third sector and the social enterprises in welfare domain are in a restrictive ecosystem, and are trying to evoke bottom up changes (relatively independently ‒

18 Namely, the strategy was adopted in 2015 and the first serious tender for the “Strengthening of Social Entrepreneurship” with over 10 million HRK allocated (about 1.3 million EUR) financed 18 projects, which included starting as well-established social enterprises. The resulting contracts were signed in May 2017. Some smaller projects related to other Ministries (like Homeland veterans in the project: “Promoting socially entrepreneurial Croatian war veterans, veteran’s civil society organizations and cooperatives” that was co-financed by European Social Fund) were noted, but overly there is a lack of tenders having in mind the scope of the Strategy. In May of 2019 the tender “Strengthening the Business of Social Entrepreneurs ‒ Phase I.” was announced. It had financial allocation of 100,010,000.00 HRK, which is approximately 37% of funds initially envisaged in the Strategy for development of social entrepreneurship 2015‒2020. (Tender info: http://www.esf.hr/natjecaji/ socijalno-ukljucivanje/poziv-na-dostavu-projektnih-prijedloga-jacanje-poslovanja-drustvenih-poduzetnika-faza-i/).

19 There are some other Strategies that recognize social entrepreneurship at least in some aspects, like The Strategy for Combating Poverty and Social Exclusion in Croatia, 2014‒2020.

20 Also, the first Croatian Network of Social enterprises was established, but it is still informal, gathering around 20 social enterprises (Vidović, 2019).

21 The author concludes (Orlić, 2014) that the groups of solidarity debate are a movement and as well as the related idea of the economy of solidarity, and in Croatia they encountered a fertile soil and gradually began to affirm themselves.


with “help” of European social fund). The need for new solutions is highlighted, but welfare state is slow in transformation (Bežovan, 2019; Bežovan et at., 2016), and SE is slowly showing itself as one of emerging answers.

DISCUSSION: CROATIAN SOCIAL ECONOMY AND SOCIAL ENTREPRENEURSHIP IN EU CONTEXT

Croatian social economy compared with more developed western European countries is seriously lagging behind due to the influence of several historical factors that underpinned that development, like ex socialist legacy in which civil activities were under strong socialist government’s patronage, planned economy which hindered entrepreneurial activities, negative legacy towards socialist type of cooperatives formed on nationalized privately owned agricultural land etc. Moreover, at the beginning of transition process Croatia was hit by war and aggression that created high human and economic costs. After the war and in the first years of 21st century, a legal framework was created for cooperatives and for civil society organization development. But on the other hand, negative connotations about cooperatives influenced even policy makers of that time and resemblance of that approach could unfortunately be still felt today, while, for instance, Strategy for social economy or cooperative sector development was not launched to date22. In the process of the accession to the EU Croatia harmonized its legislation and social economy approach was formally accepted, but in real, practical field small steps were taken. These are the most important explanations which lie behind underdeveloped cooperative sector in Croatia within EU context, as it is presented with comparative statistical indicators in Table no. 2.

Table no. 2

Croatian cooperative sector in EU context

EU Croatia COOPERATIVES (number) 176,461 1,218 MEMBERS 141,502,512 20,483 EMPLOYEES 4,707,682 2,595 REVENUE (Euro, million) 1,004,830 215.3 COOPERATIVE MEMBERSHIP (per 1000 citizens) 277.3 4.9 Share of cooperative employment in total employment (in %) 2.2 0.2

Source: Cooperatives Europe 2015 and Croatian Alliance of Cooperatives data base (2017).

22 It is important to initiate a discussion about the need to formulate Strategy for social economy or cooperative sector as the Strategy for the Development of Social Entrepreneurship in the Republic of Croatia for the period of 2015–2020 encompasses only a small part of cooperative sector – social cooperatives, but more than 90% of cooperative sector in Croatia are a different kind of cooperative organization.


Regarding statistical data covering broader social economy sector in Croatia, the situation is similar according to the data published by the European Economic and Social Committee (Monzon and Chavez, 2016). Namely, the displayed data (Monzon and Chavez, 2016) showed that in all types of social economy organizations (cooperatives, mutuals, associations and foundations) around 15,500 paid employment jobs were registered in Croatia in 2014/15, which was around 1% of the Croatian total employment, while at same time EU28 average was a share of 6.3% employees in social economy sector.

As it could be concluded from the data presented in Table no. 2, according to all statistical indicators, the number of cooperatives, cooperative membership, cooperative employment or total revenue of cooperative sector in Croatia are significantly underdeveloped compared within the EU context. There are different explanations regarding underdevelopment of cooperative sector in Croatia, from the lack of adequate institutional support, socialist legacy and path dependent theory which resulted in similar developmental trajectories in many Eastern European countries, to the negative effect of ‘crony capitalism hypotheses’ in some work (Božić at al., 2019). According to Broz and Švaljek (Broz and Švaljek, 2019), another explanation is hiding behind a lack of public policy measures specifically aimed at cooperatives like subsidies or tax exemptions (except few support measures for veterans’ cooperatives only). Broz and Švaljek stated that cooperatives in Croatia are in a way discriminated because, in recent years, state aid measures directed to small and medium-sized enterprises are mainly directed towards companies and crafts, but cooperatives have been excluded from those measures (Broz and Švaljek, 2019). From the text above it is clear that the cooperative sector in Croatia needs a strong impetus from policy makers in order to achieve its full potential, especially having in mind the aforementioned strong cooperative tradition which was present in Croatia between the two world wars.

In other aspects, related to social entrepreneurship, we need to recognize differences between the specific development of the sector in Croatia and the development of social entrepreneurship in the EU. There is a growing recognition of the role of social enterprise in Europe (European Commission, 2014). We can reflect on what is the developmental status of social entrepreneurship in CEE (Central Eastern European) countries which Croatia is a part of.

A map of social enterprises and their eco-systems in Europe maybe gives the best overview of the status and development of social entrepreneurship in Europe. The level of social enterprise activity, relative to the number of ‘mainstream enterprises’, is small, perhaps in the order of less than 1 per cent of the national business population, but the number is getting bigger (European Commission, 2014). The numbers of social enterprises in Europe vary significantly. The smallest number of social enterprises is estimated for Malta (31‒62), and the biggest one for France (96,603). Croatia has several times fewer social enterprises than countries


of similar size (Borzaga et al., 2020)23. Main mission areas of social enterprises in Europe include social and economic integration of the disadvantaged and excluded, social services of general interest, other social and community services, public service and land-based industries (European Commission, 2014).

When we examine the region, there are some common elements of CEE & SEE (Central and South Eastern European) countries that have marked the path of social entrepreneurship development compared to the EU context24. Leś and Kolin, (2009) argue that the growth of social enterprises in CEE can be mostly attributed to democratization, decentralization, and the changes that resulted in growing unemployment, and widening welfare gaps25. Fragile institutional frameworks have hindered the development of social enterprises. Comparative analyses have shown that, when compared to western EU, social enterprises in CEE&SEE are less developed, more invisible and unrecognized (Galera, 2016; European Commission, 2014). Their role appears to be marginal (Borgaza et al., 2008) when compared to Western countries. It is rather new and small and there is a lack of sufficient financial support from governments as well as support mechanisms (Vandor et al., 2017).

The facts related to the comparison with EU tradition and development of social entrepreneurship are reflected in Croatia. The lack of a policy and institutional framework for the development of social entrepreneurship, with a particularly emphasize on tax status, greatly reduces the impacts of social entrepreneurship (Baturina, 2016). Frequently unclear responsibilities at the level of ministries and implementing bodies that go along with a lack of understanding and general knowledge of this part of the third sector make the development of the area even more fragile and fragmented.

Although financing is a significant problem that would contribute to a greater economic impact in Croatia, innovative financing mechanisms have not been developed (Kadunc et al., 2014). In that area, there are some limited recent developments (Vidović, 2019). Social entrepreneurship is still not recognized among citizens (Šimunković et al., 2018)26 or in the educational system (Baturina, 2019; Vidović, 2019)27.

23 New wave of mapping social enterprises and their eco-systems in Europe is currently under the way. We still wait for the comparative report but have reflected some results for Croatia.

24 For example, Galera (2016) cited incomplete decentralization, corruption, low investment and social protection, lack of transparency low inclination towards entrepreneurship, cultural legacies, severe stigmatization of disadvantaged groups, under-development of public-private partnerships. Many CEE countries had undergone structural changes and severe economic shocks that have overall led to social problems (Borzaga et al., 2008).

25 Welfare state did not integrate non-profits in social policy and specifically social service delivery in CEE countries (Mansfeldová et al., 2004.), which was also potential space for development of social entrepreneurship.

26 Authors conducted a survey, with a limited sample, which showed that Croatian citizens are still not sufficiently familiar with the concept of social entrepreneurship.

27 Although there are certain positive developments (Vidović, 2019). Also, according to some analyses (Toplek, 2019), faculties are increasingly recognizing the importance of social entrepreneurship and the benefits that come with introducing such subjects into teaching content.


Social policy is the most prominent area for social entrepreneurship development which brings some opportunities, but also some limitations. Third sector in general has some impact in providing social services for the groups on “margins” of society and in local communities (Baturina, 2016). Regarding opportunities, the Strategy for Development of Social entrepreneurship is partly oriented towards social and work integration of disadvantaged groups but, as we note, it faced significant challenges in implementation. The new strategy for relieving poverty and social exclusion mentioned social entrepreneurship and civil society in some spheres, for example entrepreneurship for socially disadvantaged persons and PWD (persons with disabilities), as well as fostering social cooperatives employing persons with limited work abilities, but this was not followed up by concrete actions in implementation.

Social Work Act (in 2013) introduced “workfare” obligation for the recipients of minimal income benefit. They are obligated to work for public good when called by local government for 30‒80 hours per month. But that obligation was not imposed due to limited capacities of local communities to organize public works. The development of WISE social innovations in local communities, together with public partners could be an opportunity to answer this challenge in more effective ways (Baturina, 2018).

The tradition of Work Integration Social Enterprises (WISE) is practiced in Croatia in a limited fashion. Marginalized persons are mainly supported by state measures (Marković et al., 2017). Active labour market policies are, particularly recently through European Social Fund, opening some space to civil society organizations and social enterprises. Although WISE’s are not an integral part of active labour market policies, there is a wider opportunity for their development in the activities of social and economic integration of vulnerable groups. Civil society organizations are developing programs for wider conceptualization of WISE, as mentioned, as well as for social integration of different vulnerable groups. Besides, social cooperatives are created in different areas related to social inclusion.

Also, some specific new social problems are quicker addressed by civil society initiatives (for example homelessness or youth work), and could be institutionalized in social policy partly by the development of social entrepreneurship area. The relatively generous resources that the first Strategy for the Development of Social Entrepreneurship (2015‒2020) foresees, due to the question of the capacity of the administration of funds, but also of the underdeveloped sector and its potential for absorption, did not have an impact on the sector’s development (Baturina, 2016; Baturina, 2018).

CONCLUSION: FUTURE PERSPECTIVES OF SOCIAL ECONOMY AND SOCIAL ENTREPRENEURSHIP IN CROATIA?

Potential space for social economy development in Croatia is significant. There are new forces mainly concentrated in academic and entrepreneurial circles,


which are aware of this new opportunity especially after Croatia became a full EU member in 2013, and some European funds became available for this kind of activities. On the other hand, the public sector and policy makers, especially at the local level, are still not familiar with social economy concept and development potentials and that is a serious obstacle for social economy growth in Croatia. In that sense, it seems reasonable to start an awareness raising campaign about social economy development potentials among policy makers at local levels and even to organise short educational seminars to inform them and increase their capacity. The next phase should be forming a strategic partnership between educational institutions with research and education capacity in social economy field with those local communities and their policy officials in order to start concrete social economy projects. Regarding social entrepreneurship, these suggestions were somewhat included in the first Strategy for its development, but unfortunately its implementation is almost non-existent.

The Social Economy Report (CIRIEC, 2017)28 has shown that Croatia significantly lags behind in statistical indicators of the volume, economic strength and recognition of the social economy in relation to other countries. The social economy sector in Croatia has been neglected for a long time and has not been recognized as a space for sustainable jobs and the development of an inclusive and cohesive society, as is the case in many European countries. The report can be a catalyst for initiating a greater interest of policy makers, practitioners and the academic community in order to provide an appropriate framework and support for the development of the social economy and the exploitation of its demonstrated potentials. Under conditions of indefinable and delayed implementation of the development strategy of social entrepreneurship, the lack of any strategy of the development of cooperatives, and the general lack of perspective of social development and alternative (solidarity) economic practices, this seems more than necessary.

Cooperatives, especially social ones, and social enterprises in welfare domain are “swimming against the current” and trying to evoke bottom-up changes relatively independently with some “help” from European (social) funds. Social entrepreneurship is far from the horizon in which it would have what European Commission recognizes as an ecosystem (European Commission, 2014) that would support its development (Baturina, 2018; Vidović, 2019)29. Obstacles to the development of social economy and social entrepreneurship also apply to the value system that is based on a passive behaviour and dependence on the state, a high level of expectations from government programs and subsidies (Vidović, 2012;

28 Mapping exercise regarding social enterprises and their eco-systems in Europe (European Commission, 2014) gives similar results of lag of development of the social entrepreneurship sector in comparison to other European countries.

29 Vidović (2019) states that social entrepreneurship is still in the phase of progressive emergence (as identified in the study of Galera and Salvatori in 2015), because it is stagnating due to a weak performance of institutional actors in providing the supportive framework.


Bežovan et al., 2016). A need for new solutions and social innovations is highlighted in Croatia. However, civil society and social enterprise sector as well is still recognized as a space for debate on social innovations and as a new perspective to address social risks in an innovative way (Bežovan et al., 2016). Welfare state, as well as other parts of society, is slow in transformation. Social economy and social entrepreneurship can be one of the emerging answers for enhancing the quality of life, making changes in the ways of thinking about economy and focusing on sustainable development.

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ectorul economiei sociale în Croația a fost neglijat o lungă perioadă, nefiind recunoscut ca un spațiu pentru locuri de muncă sustenabile și de dezvoltare a unei societăți mai incluzive și cu

un grad de coeziune sporit, ca în cazul multor țări din estul și centrul Europei. Pe de altă parte, antreprenoriatul social este un fenomen relativ nou, propriu secolului actual. Scopul acestui articol este să evalueze tendințele și provocările dezvoltării economiei sociale în Croația, ca cel mai nou stat al Uniunii Europene. Pe baza analizei secundare de date, articolul investighează tendințe în dezvoltarea economiei sociale. Antreprenoriatul social este analizat ca parte a economiei sociale care capătă forță, dar și ca activitate economică a asociațiilor care tinde a se transforma într-o economie socială şi solidară. Articolul oferă, de asemenea, o panoramă a stadiilor contextului instituțional al dezvoltării cooperativelor și întreprinderilor sociale, cum ar fi recentele schimbări legislative și de politici, cu unele referiri la recomandările de dezvoltare a sectorului economiei sociale în Croația.

Cuvinte-cheie: economie socială; sectorul cooperativ; întreprinderi sociale; Croația.

Primit: 24.01.20202 Acceptat: 05.02.2020

S

EXPLORING THE ROLE OF SOCIAL ENTERPRISES WITHIN THE ROMANIAN WELFARE SYSTEM1

CLAUDIA PETRESCU MIHAELA LAMBRU

ocial enterprises are embedded in the local context, their organizational characteristics and operational strategies being influenced by the institutional settings, political culture and

historical traditions and events. Similar to other European countries, Romania has included the modernization of the welfare systems in the development agenda of the last decade. One of the areas of interest was to better understand and promote the dynamics of the social enterprises as economic, social development actors and facilitators. From a neo-institutionalist perspective, this paper aims to explore the role of social enterprises as a component of Romanian welfare system. It starts with an overview of the history of the Romanian social enterprise, its roots and drivers; it continues with the identification of the roles, challenges and development processes of the social enterprises as welfare services.

Keywords: social economy; social enterprise; welfare system.

Over the past decades, the concept and practice of social enterprises (SEs) have grown incrementally to become nowadays a significant topic for research, practice and policy reforms in many countries around the world. Defined as organizations combining entrepreneurial dynamic to provide services or goods with a primacy of social aims (European Commission 2016; European Commission 2019; European Commission 2020), SEs can be found in various national context and sectors of activity, having several forms of legal incorporation (cooperative, association, business), and combining multiple resources (market and public resources, procurement, citizens donation and volunteering).

The social mission of SEs business model had often oriented the SEs activities towards traditional “welfare type” activities such as social services, health services,

Adresele de contact ale autorilor: Claudia Petrescu, Institutul de Cercetare a Calităţii Vieţii al Academiei Române, Calea 13 Septembrie, nr. 13, sector 5, 050711, Bucureşti, România, e-mail: [email protected]; Mihaela Lambru, Facultatea de Sociologie şi Asistenţă Socială, Universitatea din Bucureşti, B-dul Schitu Măgureanu, nr. 9, sector 1, Bucureşti, e-mail: [email protected].

1 Part of this article was published as working paper in the CIRIEC International Working papers series – Lambru, M. and Claudia Petrescu. (2019). Social enterprises role in Romanian welfare system. CIRIEC No. 2019/17 and in Lambru, Mihaela și Claudia Petrescu. (2019). Social enterprises and their eco-systems. Country report: Romania. European Comission. Luxembourg: Publications Office of the European Union.


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2 THE ROLE OF SOCIAL ENTERPRISES IN THE WELFARE SYSTEM 25

work integration services. In more developed welfare state systems, SEs are being oriented toward innovative and even niche activities such as circular economy, collaborative economy, migration, energy, and transport. Recent comparative reports (European Commission 2020) confirm that Social Enterprise concept and practice have evolved in all the European Member States, becoming an integrative part of the contemporary welfare states, a vehicle and solution for identification of and response to new or unmet society needs.

The role of social enterprises within the welfare system was addressed and captured by the scientific literature developed in the last decades. Some authors emphasize the relations between SEs practice and the provision of social services as a consequence of the state and market failure (Kibler et al. 2018; Teasdale 2012; Nicholls and Teasdale 2017; Doherty, Haugh and Lyon 2014); others highlight the role the SEs play in providing employment to vulnerable groups (Aiken 2007; Teasdale 2012; Nicholls and Teasdale 2017; Doherty, Haugh and Lyon 2014; Elsen and Walliman 1998; Gidron and Monnickendam-Givon 2016) or in the empowerment of vulnerable groups (Bode, Evers and Schulz 2006; Gonzales 2007), as well as the mobilization of social capital (Evans and Syrett 2007; Kay 2006; Evers 2001).

The development of social enterprises is strongly influenced by the political and economic contexts and by the institutional environment in which they perform. The context characteristics influence functions and roles played by social enterprises. Moreover, the functioning and performance as well as the output of SEs activity are enhanced or hampered by the politics, economic development, valorisation of innovation and technological advancement as well as the capacity of the working force and the relevance of the public policy, administration and legislation (Kerlin 2017; Kerlin 2013; Borzaga and Becchetti 2011; Alter 2010; Young 2012, Borzaga and Galera 2009; Teasdale 2012; Nicholls and Teasdale 2017). A major context element influencing the definition and functioning of social enterprises is represented by the type of welfare regime in which they operate.

In the past decades, the landscape of the Welfare State has witnessed dramatic changes worldwide, marked by governments’ increasing incapacity to cope with multiple social pressures in a difficult socioeconomic context. In this regard, there is an extensive research literature that analyses the changes of the profile of the welfare states in different regional contexts. Starting from the examination of different typologies of welfare state regimes (Esping-Andersen 1990), we have witnessed the development of different theoretical models and typologies capturing the welfare state regimes transformation (Bonoli 1997; Ferrara 1996; Ferrara 2005; Castles 1998; Arts and Gelissen 2002; Gidron and Monnickendam-Givon 2016; Ferrera and Hemerijck 2003; Gilbert 1999; Gilbert 2003; Evers and Guillemard 2013; Morel, Palier and Palme 2012). The recalibration of the European welfare state included changes in the redistributive role and more emphasis on an enabling role, where the main accent is not on engaging in direct provision of goods and services, but rather on creating enabling conditions for many other actors to step in,


design and deliver social services up to the citizens’ expectations (Gidron and Monnickendam-Givon 2016). To this end, a variety of policy instruments are used to promote the partnership and complementarity between public and private actors; move from a compensatory welfare system (reactive) to a preventing one (proactive) and from passive social policy measures of support to active provisions of social inclusion (Baglioni 2017; Gilbert 1999; Gilbert 2003; Evers and Guillemard 2013; Morel, Palier and Palme 2012).

A specific strand of research literature focuses on the changing realities of the welfare state development in CEE, post-communist countries (Aidukaite 2011; Cerami 2006; Cerami and Vanhuysse 2009; Deacon 1992; Fenger 2007; Inglot 2008). All these studies indicate that CEE countries present distinctive welfare characteristics based on their common historical, institutional and socioeconomic past. Some major common characteristics refer to a return to the Bismarkian social insurance system established before the Second World War; accelerated social security reform within a short period of time; great influence of foreign experts and organizations in policy design; issues related to unemployment and labor migration; accelerated demographic transformation; weakness of the associative sector and civil society organizations in general; high level of corruption; increasing inequalities and social exclusion (Golinowska et al. 2009; Ferge 2011).

As part of this regional trend, Romania has also modernized the actual Welfare State model by developing and strengthening a mixed of welfare systems. Despite greater economic and social pressure, the State’s inability to cope with a high demand for social services, and the difficulties of the public authorities in maintaining and increasing the quality of public services, considerable progress took place.

Over the past three decades of democracy and market economy, both public institutions (at central and local levels) and non-governmental organizations have been set up and successfully contributed to the overall development of the country. Many of these organizations have established public‒private partnerships due to public market openness towards private actors such as non-governmental organizations and non-profits. While social contracting is no longer a novelty for governmental decision-makers in Romania, the logic of investing in social entrepreneurship and opening the public market to all social economy entities remains both a novelty and a challenge for public policy development and implementation.

The reform of the welfare system in Romania included the decentralization of social protection services, the reform of the public pension system (social pensions, and the introduction of the private pension system ‒ the second and third pillar); development of the unemployment insurance system; health insurance reform; development of social inclusion measures (introduction of the minimum guaranteed income, redefining social benefits system, active measures for employment of vulnerable people); development of the quality standards for social services (Cerami and Stanescu 2009; Zamfir 1999; Zamfir, Stanescu and Arpinte 2015).


The development of social enterprise concept and practice in Romania is strongly linked to the larger concept of social economy. Both concepts of social economy and social enterprise have been almost simultaneously introduced in Romania after 2005, generating some confusion among the existing stakeholders. Also, both concepts have been narrowly understood as a new way to connect the social inclusion policy with EU funding (European Commission 2019; Lambru and Petrescu 2017; Petrescu and Negut 2018).

The present article aims at analysing the development of the Romanian social enterprises in connection with the evolution of the welfare state. The structure of the article has two main parts. The first part presents a historical overview of the evolution of social economy organizations in Romania, covering pre-communist, communist and post-communist periods. The second part of the article is trying to clarify the question of social enterprises specific roles within the Romanian welfare system.

HISTORICAL ROOTS AND MILESTONES IN THE DEVELOPMENT OF THE ROMANIAN SOCIAL ENTERPRISES

The following section of the article describes and analyses the historical background of the development of social enterprise in Romania. It presents the dynamics of social economy organizations and the process of social enterprise institutionalization. Associations and foundations with entrepreneurial interest, mutuals and cooperatives have all survived and adapted to the dramatic changes of political and economic regimes taking place in the last 70 years of Romanian history, from capitalism through communism and, back to capitalism, after 1989.

In Romania, social enterprises have roots in associative, mutual and cooperative traditions. These entities reached their apex in the 19th century, when associations and cooperatives of all sorts started to play a more important role in supporting the socioeconomic modernization of the country.

Between WW1 and WW2, new and modern legislative frameworks for associations and cooperatives were enacted, allowing these organizations to develop and expand (Epure and Saulean 1998; Lambru 2013; Petrescu 2013; Lambru and Petrescu 2016). The pre-communist period is characterised by the development of a variety of associative forms. The Romanian Constitution of 1923 provided the first full recognition of citizens’ freedom of association. The Law 21/1924 regulated how associations, foundations and mutual aid associations functioned; it was inspired by the French legislation from 1901. This Law also allowed the development of entrepreneurial activities aiming to support the organisational mission of associations.

Mutual aid associations represent a special case, as they are one of the most entrepreneurial organisations within the Romanian landscape of associations.


Mutual aid associations of retirees (RMAAs) have a long track record in Romania, first mentioned in the census of social assistance and care institutions conducted in 1936 (Manuila 1938), as organisations providing social and financial services for their members. Unlike other European countries, where these organisations evolved rapidly after World War II, and function today as settled credit unions and/or are involved in mutual insurance/reinsurance businesses, in Romania, contemporary mutual aid associations only provide a small amount of financial loans to their members and deliver a limited range of social services.

The cooperatives experienced a significant growth during the pre-communist period, when worker, consumer and credit cooperatives emerged. The first Romanian legislative provisions on cooperatives date back to year 1887; between the two world wars, various legal acts triggered the development of cooperatives (the First Law of Cooperatives was issued in 1923).

The natural development of the social economy organizations was interrupted when the communist regime came into power. The communist regime made decisions (Les and Jeliaskova 2007) to fit the communist ideology and to be used as instruments of the new political regime. From nationalisation to forced incorporation into the state infrastructure, from demutualization to the development of quasi social market organisations, many tools were used by communists in order to control them. All the surviving social economy organizations have been fully integrated within the agro-industrial communist economy, functioning under strict coordination of the communist State Party. During communist times, it was impossible to register and set up independent organizations, outside the State Party’s control. This notwithstanding, mutual aid associations and cooperatives continued to function despite rapid and dramatic changes in the Romanian political and economic contexts. Under the communist regime, mutual aid associations were placed under state control and fully integrated in the newly established welfare system. The goals to be pursued, the services to be delivered and the income sources were established in a top-down fashion. The cooperatives (worker, consumer, credit and agricultural cooperatives) became a main economic actor, together with state-owned industrial enterprises; the state coordinated their work and simultaneously set resource requirements, production and export plans. As part of the centralised economy, during the communist period, public authorities tended to consider cooperatives as private businesses, since they were formed based on the freely expressed consent of members who could hold property rights according to the law (though they actually had no say with regard to their rights or joint assets) (Cace et al. 2010; Petrescu 2011; Lambru and Petrescu 2014). In fact, cooperatives were not accountable to their members but to the state power and the communist party.

The association and foundation sector was deeply controlled by the communist regime. Very few associations survived the communist regime, and they only had


formal autonomy: some developed around special interests (such as philately or numismatics), traditional crafts (such as bee keeping or animal breeding), while others were associations with specific target groups, like people with disabilities and tenants’ associations (Epure and Seulean 1998).

In 1989 Romania went to a new change of political and economic regime, moving from dictatorship to democracy, from planned economy to market economy. In the post-communist period, Romania witnessed a significant rebirth of associations, including mutual aid associations, and a collapse of the cooperative sector. The expansion of associations was both quantitative and qualitative. Associations contributed to innovation in the area of public interest services ‒ particularly social services ‒ and played an active role in advocating for the development of social enterprises. The first social entrepreneurship initiatives have appeared in the early 1990s, promoted mainly, by associations and foundations. Small-scale operations thus bloomed in an environment that did not foster entrepreneurial endeavours. The main motivation pushing associations to start up entrepreneurial activities was the need to secure funding to accomplish their social mission.

By mid-1990s, a specific category of associations, namely RMAAs, began to reorganise their operations, diversify their services and expand their offices; they registered a constant growth in membership and represent one of the most successful types of bottom-up social enterprise in the country (Lambru and Petrescu 2016). RMAAs were set up in order to fight the social and financial exclusion of the elderly. They provide a wide range of services (free of charge or at reduced prices) to both their members and other elderly people from the community. Such services include reimbursable and non-reimbursable financial services, medical services and other social protection services (home care services, socialisation activities, and occupational therapies) according to their members’ needs and financial capability. Non-reimbursable social services are financed using the surplus resulting from the financial services (loans) provided to the members.

One can regard the cooperative tradition as another root, albeit not a driver, of social enterprise development in Romania. Romanian traditional cooperatives have not participated in debates and reforms concerning the social economy in general, or social enterprises in particular. Since 1990s, the cooperatives have been perceived as institutions belonging to the communist era. Cooperatives are faced with the need to find a new identity and to reform their system in order to meet the market imperatives. The current political class has paid little attention to these “remnants of the former regime” which, at best, have been lumped together with small and medium enterprises (SMEs), but most often have been largely overlooked. In the years following the fall of communism, the cooperative sector faced major challenges as a consequence of the property retrocession to former owners, decreased production due to lack of markets for certain products, governance issues, a dramatic


drop in membership and significant deficit related to communication capabilities and public image.

Yet, it is worth mentioning the recent development of a new generation of cooperatives, set up after 2005, many of which pursue general interest goals and engage in new business areas such as ecological agriculture, renewable energy, and new crafts. Also, in Romania, worker cooperatives are at the root of sheltered workshops and contemporary work integration social enterprises (WISEs), as they integrate people with disabilities in the labour market. In the post-communist period, Romanian legislation on sheltered workshops aimed at facilitating the work integration of people with disabilities. In 1992, Law 57/1992 on the Employment of People with Disabilities stipulated that at least 70% of sheltered workshops’ employees should be persons with disabilities. Since 2002, the percentage of employees with disabilities has been reduced to 30%.

An important milestone in the post-communist period has been the EU accession and membership phase. The EU accession took place in 2007, bringing along a new narrative and policy toolkit targeting social economy organizations in general, and social enterprises in particular. In Romania, the concept of social enterprise was introduced after 2005, shortly before the accession into EU. The new policy narrative regarding social inclusion was emphasising the instrumental role of WISEs. The socio-economic and political contexts, dominated lately by economic crisis and pressure to reform and upgrade public services (particularly social services) and to develop solutions for sustainable work integration for disadvantaged groups, steered Romanian decision-makers to pay interest towards both the social economy and social enterprises.

Since 2007, as a new member state of the EU, Romania has gradually become integrated into the supranational European policy; the country was simultaneously exposed to and adhered to the common European models of policy reforms. The development of legislation on social enterprise strongly links with the European trends in this area. Romanian associations acted as policy entrepreneurs putting the social entrepreneurship issue on the government agenda, working strategically towards the institutionalisation of social enterprises and integrating European trends towards general interest service reforms with the national policy agenda.

After 2010, strongly influenced by the European social inclusion agenda and under the pressure of the associative sector, the government organised public consultations on the legislation regarding the social economy and social enterprises. Associations and foundations, mutual associations and WISEs played a major role in advocating for social enterprise legislation and were deeply involved in adding relevance and practicability to the law. Already interested in the development of entrepreneurial activities in order to pursue their social mission, having a legal framework allowing entrepreneurial activities within specific limits, associations seized the opportunity to include the social enterprise issue into their agenda. This


was a way to secure their investments and innovations, mainly in social services, but not exclusively.

At this stage of institutionalisation of social enterprise, a good understanding of the conceptual framework behind social enterprise was crucial. Concurrently with the increasing interest of public authorities to promote and support the development of social enterprise initiatives, the interest in related research has also grown, and debates with respect to the specificity of this type of organisation, its social utility, its characteristics and the profile of relevant organisational actors have intensified. Due to confusion around the concepts of social economy and social enterprise, attempts to design and promote a comprehensive legal framework fostering the development of social enterprise posed challenges.

The recent evolution of the concept and practice of social enterprise in Romania is closely linked to the development of the concept of social economy ‒ the latter being more “visible” and easy to grasp for various stakeholders. While the legislation’s foundation is grounded in the social economy concept, its focus aims to regulate social enterprises. In fact, social enterprises have been included in the Law on the Social Economy (Law 219/2015). Throughout its institutionalisation process, the public debates shaped by the rhetoric of social inclusion centred on the concept and use of new social enterprises. Policy makers view ex lege social enterprises in Romania as vehicles for employment of vulnerable groups. The rest of social enterprises, not complying with this specific line of business and operating in a variety of domains of general interest, remain largely ignored.

The development of the policy framework for social enterprises in Romania took place in the context of EU funding. Despite the recommendation of the associative sector to widen the spectrum of social enterprises regulated by the new legislation, the government largely complied with a narrow policy approach, which defines and characterizes social enterprise as policy instruments for social inclusion.

Creating the institutional framework for social enterprises raised the expectations of Romanian practitioners regarding the role of social enterprises within the welfare state. These expectations have yet to be fulfilled according to many stakeholders.

METHODOLOGY

This article is based on the findings of an extensive research on Romanian social enterprises carried out between 2016‒2019. In order to allow for data triangulation, multiple research methods were used: 1) desk research of financial data related to social enterprises using REGIS database of the National Institute of Statistics (NIS); 2) in-depth interviews with social enterprises, sheltered workshops and associations and foundations from social and health areas representatives (20),


in-depth interviews with decision makers at local and national level (6), in-depth interviews with representatives of social services providers and social insertion enterprises networks; 3) social documents analysis (reports on public procurement for social enterprises, reports on non-governmental sector in Romania). For secondary data analysis we have also used data from Ministry of Labour and Social Protection on accredited social services providers (number, typology, services provided), National Agency for Disabled Persons on sheltered workshops (number, typology, legal incorporation) and National Agency for Employment on registered social enterprises (number, typology, legal incorporation). For the section of the article, analysing the state of implementation of the legal provisions related to reserved contracts and social procurement reform in Romania we have exploited the findings of the research report produced for the Center for Not-for-Profit Law Association on “Reserved contracts in public procurement”.

THE SE TYPOLOGY AND DEVELOPMENT TRENDS WITHIN THE ROMANIAN WELFARE SYSTEM

When we look to the universe of social enterprises in Romania one can identify a variety of de facto (associations and foundations with entrepreneurial activity, RMAAs, cooperatives pursuing general interest aims) and legally recognized social enterprises (ex lege social enterprises and WISEs), many of them with deep roots in social economy traditions. The next section of the article will present the evolution and role specificity of Romanian social enterprises within the Welfare State.

Associations and foundations with economic activities Associations and foundations that carry out economic activities represent the

most dynamic actors in the pursuit of the development of social enterprise. Associations and foundations are engaged in economic activities to address social issues either directly or indirectly (by developing a separate limited liability companies in which they are the main shareholder). The market oriented associations and foundations develop their economic activities (social, cultural, educational, health and so on), based on the availability of the financial resources, that are most of the time, scarce. One possibility to secure financial resources necessary for their activity apart from the traditional methods (grants, sponsorship, subsidies, donations, membership fees, etc.) was the development of economic activities enabling them to independently secure part of the needed resources in order to be able to fulfil their social goals.

According to the data from in-depth interviews, associations and foundations’ economic activities include the delivery of various services for the general public (social services, care giving, education, environment protection, labour market


services, culture, sport, tourism, fair trade, accounting, archiving, printing etc.) or even the production of goods (food, jewelries, toys, textiles, decoration etc.).

The data of the National Institute of Statistics (NIS), for 2015, indicate 42,707 active associations and foundations, out of which 5,302 carry out economic activities (12% of all active associations and foundations). In market oriented associations and foundations there are 13,117 employees (13% of associations and foundations employees). Associations and foundations’ total incomes/revenues from economic activities have increased between 2010 and 2015. In 2015 the average percentage of the revenue of associations and foundations from economic activities was 29% (Table no. 1).

Associations and foundations’ territorial dispersion is uneven and indicates a concentration in urban areas (approx. 75%) and in the more developed regions of Romania (55% of associations and foundations are located in the three most developed regions) (CSDF 2017, 22‒23). This has a huge impact on the level of accessibility of their services, particularly in the areas facing the most serious social problems (rural and poor areas).

Table no. 1

Evolution of association and foundations with economic activity in Romania 2000–2015

Associations and

foundations 2000 2010 2011 2012 2013 2014 2015

Number of organizations 1,219 2,730 3,832 4,058 4,468 4,744 5,302

Number of employees 1,942 12,561 15,038 16,097 11,272 12,469 13,117

Economic activities’ income in total associations and foundations’ income (%)

34.20 55.63 57.25 28.07 29.92 28.66

Number of organizations that had a surplus

1,589 2,299 2,341 2,133 2,289 2,656

Total income (thousand EURO) 51,319 529,284 829,828 713,211 2,045,685 2,117,577 2,543,032

Source: CSDF, 2017. Romania 2017. Non-profit sector – profile, evolution and challenges; NIS, data processed by the Research Institute for Quality of Life (RIQL), 2013.

If we consider only the associations and foundations active in the delivery of

social services of general interest, 9% of the associations and foundations from social/charitable field carry out economic activities, 8% of those from health field, 12% of those from education, 12% of the cultural ones, 10% of the civic ones and 9% of those from environment (Table no. 2).


Table no. 2

Associations and foundations’ areas of activity and % of associations and foundations having economic activities per area of activity, 2010‒2015

Associations and foundations’ areas

of activity 2010 2011 2012 2013 2014 2015

Social/charity 5,961 6,651 7,587 8,192 8,688 8,861 % with economic activity 8% 7% 7% 8% 8% 9%

Education 2,927 3,257 3,858 4,632 5,151 5,453 % with economic activity 11% 10% 9% 11% 11% 12%

Culture 2,738 3,211 3,713 4,589 5,035 5,310 % with economic activity 9% 10% 9% 11% 10% 12%

Health 1,601 1,655 1,808 2,079 2,252 2,456 % with economic activity 8% 7% 8% 8% 8% 9%

Civic 970 1,092 1,273 1,495 1,606 1,623 % with economic activity 9% 9% 9% 9% 9% 10%

Environment/ecology 743 868 989 1,111 1,199 1,233 % with economic activity 8% 8% 7% 8% 8% 9%

Source: CSDF, 2017. Romania 2017. Non-governmental sector – profile, evolution and challenges.

Role of associations and foundations in welfare system Associations and foundations with economic activities are the most active SEs

in tackling the social exclusion issues in Romania. Those organizations represent the nexus of the social service providers (quantitative and qualitative) and some of the most important employers for vulnerable groups. Also, they are the main social innovators in the field of social protection by developing new types of social services, in accordance with the needs of beneficiaries, introducing new concepts and practices in social policy (ex. social integrated services at community level, quality standards for various types of social services). With regard to social protection, according to data analysis from interviews with decision makers, the associative sector is the main private provider of services. This is due to its capacity to innovate and respond effectively and affordably to the people and community’s needs. Also, associations and foundations partner with the public institutions in the process of policy design, policy advocacy and social protection reform.

As other European countries, Romanian’s welfare system has opened the social services provision public market to other actors, particularly to associations and foundations due to the state failure to develop and deliver social services to divers and growing needs, and public resources’ scarcity. Insufficient public resources (Romania has the lowest social protection spending as percent of GDP, in EU) and the reduced capacity of the welfare system to respond rapidly to the growing social needs represent the main reasons for the development of associations and foundations as social service providers. Starting with 1998, the state had opened


the social service market to other providers by introducing various public‒private partnership formulas. Ten years later, the state had further strengthened its regulatory role by imposing also quality and cost standards both for public and private social service providers. All social service providers, public as well as private, should be accredited by the Ministry of Work and Social Justice. This accreditation is intended to certify compliance with quality criteria and standards in social services at national level.

In Romania, social services of general interest (social protection, health, culture, education) are developed and provided by the state and private sector, the associative sector being one of the main private actors in this field. According to the National Registry of Accredited Social Services Providers in 2020, 2,978 accredited social services providers deliver 4,265 licensed social services. Almost 60% of the accredited social service providers are private providers (associations and foundations, mutual aid associations, limited liability companies, church organizations) and 56% are NGOs (MMPS, 2020). The number of associations and foundations that are accredited to provide social services is 1,664, almost double of the associations and foundations with economic activities in the social/charitable field. (MMPS, 2020) A number of 1,659 licensed social services (meaning 42% of all licensed social services) is provided by private organizations. Associations and foundations have specially licensed home care services for elderly/people with disability, day care centers for children and their families, day care centers for people with disabilities, social canteens, residential centers for the elderly, and centers for other categories of vulnerable people.

In Romania, social services comprise a wide range of services and activities aimed at supporting vulnerable people “to overcome difficult situations, prevent and combat the risk of social exclusion, increase the quality of life and promote social inclusion” (Law 197 / 2012, Article I, point 3). This diverse range of services may include social services (accommodation, food preparation, food, cleaning, counseling, therapy, etc.), health services, educational and training services, cultural services or leisure.

In the last 15 years, it can be witnessed a development of economic activity within the associations and foundations accredited as social services providers. The analysis of qualitative data indicates this economic activity in the field of social services (charging the cost when the beneficiaries that can afford to pay) or in other economic fields where they employed some of their beneficiaries from vulnerable groups. The revenue from economic activity enables associations and foundations to provide social services free to vulnerable groups.

The decision-makers, representatives of associations and foundations who have been interviewed on different research projects, consider that the associative sector is also the most important employer for vulnerable people. Many of associations and foundations have set up protected shelters where the employees are mainly people with disabilities. This type of social inclusion represents an important source


of income for people with disability while ensuring for many of them, the transition to regular labour market.

The associations and foundations contribution to social inclusion policies and implementation includes also the empowerment of marginalized people through various mechanisms such as social production and social mobilization (Gonzales 2007). The social production mechanism of social enterprises implies the development of competencies and capabilities of vulnerable people. Most of associations and foundations that carry out economic activities deliver many educational opportunities for their beneficiaries. The social mobilization function is related to civic empowerment that defines the people capacity to challenge the rules and norms that lead to social inequalities and injustice. Their support services offered to vulnerable groups include also counselling and mentoring.

WISE-type enterprises – sheltered workshops and social insertion enterprises

In Romania, there are two types of work integration social enterprises – sheltered workshops dedicated only to people with disability and social insertion enterprises centered on all types of vulnerable groups.

Sheltered workshops Sheltered workshops were established in the first years of the post-communist

period as an institutional form to support the work integration of people with disabilities. Companies and associations can develop these entities and foundations or public administration and at least 30% of their employees should be people with disabilities (Law 448/2006 on protection of people with disabilities).

Contemporary sheltered workshops are organized according to the Law 448/2006 (Law on protection of people with disabilities) and perform productive work, participate in commercial activities, and also provide personal and social services to fully integrate their recipients in the open labor market and society.

Romania has introduced a quota-system for stimulating employers to hire people with disabilities. According to it, any private or public organization with at least 50 employees should employed persons with disabilities in a proportion of minimum 4% of total employees. Otherwise, employer should pay at the budget 100% of the national minimum salary for all the vacant positions. Until 2017, as an alternative, the defaulting company could buy goods or services for the given amount from authorized sheltered workshops. From 2017, this alternative was not available and this had an important impact over the sheltered workshops. The change in the legislation regarding protection of people with disabilities from 2017 (G.O. 60/2017) generated a reduction of the market for sheltered workshops and of their revenues. Because their fiscal facilities were eliminated, most of them do not


want to renew their authorization, and until March 2020 only 27 sheltered workshops renewed their authorization. According to the information provided by National Agency for Fiscal Administration, the amount that is collected monthly from this disability tax is around 42 million EUR.

According to statistical data, there were 48 such units in 2006 and one year later (in 2007) their number increase more than three times (150 sheltered workshops were registered). By 2010, the number of registered sheltered workshops was 419, while by 2017, their number almost doubled (708) (ANPD 2017; Achitei et al. 2014; Constantinescu 2013). During 2007‒2017, most of those sheltered workshops were companies (64%), associations and foundations (28%) or cooperatives (2%) (ANPD 2017). The number of associations and foundations managing sheltered workshops increased after 2011 from 56 to 197 in 2017 (they are already mentioned at the associations and foundations) (Table no. 3).

Table no. 3

Romanian sheltered workshops evolution between 2008‒2017

2008 2010 2011 2012 2013 2016 2017 Sheltered workshops 207 481 330 564 667 759 708 Managed by: Limited liability companies 156 378 245 391 455 495 442 Associations and foundations 24 58 56 109 149 204 197 Cooperatives 22 24 11 20 19 16 15 Other types of organizations 5 21 18 40 43 43 42 Public institutions 0 0 0 4 1 1 1

Source: ANPD 2017.

Social insertion enterprises The Law on the Social economy (2015) regulates the activity of the social

insertion enterprises. According to the law, social insertion enterprise is an instrument for the integration of vulnerable people into the labour market, including people with disabilities. Social insertion enterprises and sheltered workshops are functioning in parallel with neither one replacing the other one. The incorporation form of social insertion enterprise could be cooperative, association or foundation, mutual aid association or limited liability company. Each one should fulfill social enterprise criteria (Art. 3) and employ at least 30% of people from vulnerable groups such as (Art. 10): long-term unemployed, former drug addicts, unemployed ex-offenders, minorities facing discrimination (e.g. Roma, NEETs, victims of domestic violence, single mothers, homeless, etc.).

Considering that social insertion enterprises facilitate the insertion of vulnerable persons into the labor market, they must also provide accompanying measures specifically tailored for them (information, counseling, professional training, job


adaptation to the person’s capacity, accessibility of the work place according to people’s needs, etc.). These accompanying measures have the role to empower vulnerable people and enhance their chances in view of the socio-professional insertion.

Due to a highly bureaucratic registration process (administrative documents to prove the existence of employees from vulnerable groups, an annual report on the activity carried out, accounting documents etc.) and lack of the fiscal facilities or other assets dedicated exclusively to them, many of social insertion enterprises are not officially registered in the National Registry of Social Enterprises. These are the reasons why the interviewed representatives of social enterprises considered that the number of social insertion enterprises registered is very low. At the end of February 2020 only 129 social enterprises were included in the National Registry of Social Enterprises (ANOFM 2020) and only 16 are work integration social enterprises (WISEs).

Role of WISEs in welfare system WISEs are instruments of the welfare system, being an active social policy

measure for social inclusion. WISEs have a specific role in ensuring paid employment to vulnerable people, especially to people with disabilities, as well as to empowering vulnerable groups to integrate socio-professionally. The employment of disabled people has a double impact ‒ economic and social.

From an economic point of view, the WISEs have an important role regarding the integration in the labour market of a specific category of employees, training and retraining in line with labour market demand, and bridging the transition from sheltered employment to free labour market.

The social role of WISEs comprises two major components, social integration (interaction with others, strengthening self-esteem, providing support services), and mobilizing social capital by providing a new social environment for the persons with disabilities. The WISEs’ representatives consider that the most important role of these organizations is to offer the opportunity for vulnerable people, especially for people with disabilities, to become active persons in the labor market and to expand their social interactions. More specifically, they represent a way to get those people out of their ordinary life environment and to restore their self-confidence.

Between 2012 and 2016, there was an ascending trend in the number of sheltered workshops registered as well as the number of people with disabilities employed. It is worth mentioning that by 2017, the number of employees had decreased as shown in Table no. 4. This was one of the consequences of the changes in legislation relative to sheltered workshops. By the end of 2017, only 465 people were employed by sheltered workshops, as a follow up of the implementation of the provisions of G.O. 60/2017 and the abolition of the facility offered to economic agents to buy products made by sheltered workshops in exchange for the quota of employees with disabilities to be hired.


There is no official data available regarding the transfer of people with disabilities from sheltered workshops to free labour market, yet, different studies and information from stakeholders’ in-depth interviews show that this transition rate is generally very low due to the type and gravity of disability as well as, the companies limited interest to hire them (RAS 2009; Achitei et al. 2014).

Table no. 4

The evolution of the employees’ number in sheltered workshops

Sheltered workshops 2012 2013 2014 2015 2016 2017

Number of sheltered workshops 564 667 691 723 759 708 Number of employees in sheltered workshops 1,690 1,769 1,733 1,785 2,015 1,550

Number of disabled persons employed at national level 28,756 29,842 30,556 32,147 33,449 33,593

% employees in sheltered workshops of total disabled persons employed at national level

5.88% 5.93% 5.67% 5.55% 6.02% 4.61%

Source: DPPH 2011; ANPD 2015; ANPD 2016; ANPD, 2017; Alături de voi 2014.

Mutual aid associations of retirees The main scope of Mutual aid associations of retirees (RMAA) is to offer

financial, social, health and cultural services for elderly people and their communities. They act as incipient credit unions that help their members to cope with financial risk exclusion by providing small loans. They are not involved in insurance/ reinsurance of activities like other similar organizations from Western Europe (Lambru 2013; Grijpstra et al. 2011)

According to the data of the National Institute of Statistics, between 2000 and 2015, the number of RMAAs has increased with more than 65%. In the same time, the number of employees nearly doubled (Table no. 5).

Table no. 5

Mutual aid associations’ evolution in Romania

Mutual aid associations for

retirees 2000 2010 2011 2012 2013 2014 2015

Number of organisations 133 203 193 198 201 218 219 Number of employees 1,306 1,306 2,176 2,240 2,412 2,544 2,450

Source: CSDF, 2017. Romania 2017. Non-profit sector – profile, evolution and challenges; NIS, data processed by the Research Institute for Quality of Life (RIQL), 2013.


Role of mutual aid associations of retirees in welfare system Mutual aid associations of retirees are a safety network for more than 1.5 million

members and their families. They offer a wide range of non-bank financial services (loans) and social services tailored to the needs of its members, mostly senior citizens. RMAAs covers various risks common to the Romanian welfare system: financial exclusion, social exclusion and costs incurred by specific events (eg. funerals, non-covered health costs). Based on membership status, RMAAs cover the funeral costs for all members, from the social fund available. For other health events, the costs are covered within the limits of the funds approved annually by the General Assembly.

Considered as incipient credit unions, RMAAs provide small loans for retirees and their families with a low interest rate. In this way, they cover the financial risk of the majority of Romanian retirees due to the fact that they are not eligible for banking services as the level of retirement benefits per annum is low.

While the core services supplied are financial ones – small loans for their members ‒, the range of services delivered is much broader and includes: social services, cultural, recreational activities, direct services for small fees in exchange of work provided by members, food shops with lower prices, repairing workshops, medical and funeral services, beauty services. These services are provided to all elderly people in need. The fees for services are different depending on the membership status.

ROLE OF THE SE IN EMPLOYMENT OF VULNERABLE GROUP

Romania has funded the social enterprises’ start-up from 2009 to 2015 through the Sectoral Operational Program Human Resources Development (SOP HDR) (Axis 6 – Social economy). An amount of EUR 429,153,699 was earmarked, through SOP HDR, for both the social enterprises’ start up and the research/assessment of the field. Through these funds, 1,339 social enterprises have been set up and 8,332 jobs have been created. Of those, 70% (933) were organized as limited liability companies, 22% (293) as associations and foundations, 6% (82) as cooperatives and 2% (26) as mutual aid associations (Table no. 6).

Taking into account the fact that social enterprises have been considered as forms of social inclusion (the axis that financed SEs’ start up were dedicated to social inclusion of vulnerable groups), 74% (6148) of the new jobs created were for vulnerable persons (Roma people, persons with disabilities, NEETs, young people beneficiaries of the social protection system, people unemployed, people living in poverty, vulnerable women etc). The main issue is related to the sustainability of these jobs created by the SEs and financed through SOP HDR (Petrescu 2019).

The poverty rate in rural areas of Romania was higher (48.5%) than in urban ones and was caused by the predominance of agriculture within the overall economy,


which is associated with low income and seasonality of work, but also with the fragmentation of the agricultural holdings, small dimension of the farms, low level of entrepreneurship. The latter factor represents an important determinant of poverty and exclusion for people from these areas. Because of that, the SOP HDR promoted the social entrepreneurship in rural areas and 67% (897) of social enterprises financed were rural.

Table no. 6

Social enterprises’ startups financed through SOP HDR, POSDRU 2009‒2015

Forma de organizare Regional intermediary

body who managed the

implementation

Social enterprises

number

Jobs number

Limited liability

companies Coops Assoc. &

Foundations Mutual aid associations Others

South East 251 1,481 195 4 49 3 South West 175 1,196 106 54 15 South Muntenia 340 2,005 241 4 95 Bucharest-Ilfov 67 399 49 8 10 Nord West 250 1,767 180 4 64 2 Centre 256 1,484 162 8 60 26 Total 1,339 8,332 933 82 293 26 5 Source: Center for Non-profit Legislation, 2019. Data from Ministry of European Funds, General Direction European Programs Human Capital, 2018, Data received according to the document 36332/23.05.2018.

RESULTS AND CONTRIBUTION

Compared with other western European countries, the development of social economy actors and their role in welfare service marketization occurred in Romania also, but with limited coverage and a much reduced policy toolkit. Each type of social enterprise has a specific role in the welfare system and this is related to the characteristics of the activities carried out by these organizations. Public policies target in particular the role of social enterprises in relation to social inclusion of vulnerable groups and do not take into consideration other possible roles.

The new legislation developed in Romania (Law on social economy 219/2015 and Law on public procurement 98/2016) offers interesting perspectives with regard to the contribution of the social enterprises to the development of services of general interest. Moreover, special provisions in the public procurement framework (the law 98/2016) regarding social clauses and reserved contracts have been introduced, although the implementation is inconsistent.

The main challenges that social enterprises face in Romania are as follows: 1) limited awareness and understanding of the social enterprise conceptual framework that impacts on the potential of social enterprises as a modern vector to reforming


social services; 2) the underdevelopment and underfunding of Romanian social service sector despite the growing demand for such services; 3) the limited availability of funding for development of social enterprises.

The small number of registered social enterprises, but also the reduced capacity of those created through the structural funds to support themselves, makes them marginal within the Romanian welfare system. Also, we can add here issues related to self-recognition, many of the NGOs that carry out economic activities are not declared as social enterprises in the absence of fiscal facilities.

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răspuns la problemele tranziţiei – texte selectate. Cluj-Napoca: Eikon.

ntreprinderile sociale sunt integrate în și dependente de contextul local, caracteristicile lor organizaționale și strategiile operaționale fiind influențate de relațiile instituționale formale

și informale, cultura politică, normele și tradițiile existente. Similar cu alte țări europene, România a inclus modernizarea sistemului de protecție socială pe agenda de dezvoltare din ultimul deceniu. Unul dintre domeniile de interes a fost să înțeleagă și să promoveze mai bine dinamica întreprinderilor sociale în calitate de actor și facilitator al dezvoltării sociale. Din perspectivă neo-instituționalistă, acest articol își propune să exploreze rolul întreprinderilor sociale ca o componentă a sistemului de bunăstare din România. Articolul oferă o imagine de ansamblu asupra istoriei întreprinderilor sociale românești și a influenței diverselor sisteme politice asupra lor. A doua parte analizează rolurile, provocările și procesele de dezvoltare ale întreprinderilor sociale ca servicii de protecție socială.

Cuvinte-cheie: economie socială; întreprindere socială; sistemul de bunăstare.

Primit: 10.02.2020 Acceptat: 01.03.2020

Î

THE SUSTAINABILITY OF ENTREPRENEURSHIP WITHIN THE SOCIAL AND SOLIDARITY ECONOMY:

AN ANALYSIS OF SOCIAL FACTORS

ARTURO LUQUE GONZÁLEZ PAUL RENATO SOLÍS BENAVIDES

MARIA BERTHA ARAGADOVAY SISLEMA

he present study is situated within the Ecuadorian social and solidarity economy. It is a diagnosis of the perception of how social factors influence the sustainability of the sector’s

entrepreneurship. The perspective presented here is a result of the pragmatism of the civil service of the National Institute of Social and Solidarity Economy and may be taken as a theoretical basis for the design and implementation of comprehensive institutional interventions at the national level. Based on the findings of this study, there is a need to modify the current paradigm of action in the implementation of programs and projects, and to re-assess the reality in which the sector operates at ground level, and the impact of social factors that are part of this ecosystem. A reflection on the successful components, limitations and operational considerations gives insight into the way forward for this sector, and provides guidance on establishing processes of participation, social equity, and economic and social inclusion. The outcome of the research is an innovative instrument that may be used to provide relevant information and references as well as orientation for further research into socially sustainable good practice.

Keywords: diagnostic; factors; sustainability; entrepreneurships.

INTRODUCTION

The 2008 Constituent Assembly of Ecuador determined that the national economic system be based on the social and solidarity model. This change of perspective implied a need to acknowledge a diversity of economic approaches; consequently, in addition to the public and private sectors around which public policies had been established, the social economy was to be recognized. This was

Adresele de contact ale autorilor: Arturo Luque González, Paul Renato Solís Benavides, Maria Bertha Aragadovay Sislema, Technical University of Manabí, Ave. José María Urbina y Che Guevara, Portoviejo, Manabí, Ecuador and Euro-Mediterranean Observatory on Public Policies and Democratic Quality, Universidad Rey Juan Carlos, Paseo de los Artilleros 38, 28032 Madrid, Spain, e-mail: arturo@elcandelero; [email protected]; [email protected].


T

2 ENTREPRENEURSHIP WITHIN THE SOCIAL AND SOLIDARITY ECONOMY 47

to include family businesses, the informal sector, the subsistence economy, the care economy and wage labor. The principal objective of this sector is the sustenance of the social and economic unit on the basis of its primary resource: labor. Working within this framework and with a view to facilitating the construction of a social economy, the 2008 Constitution of the Republic of Ecuador proposed the creation of various forms of mixed economy, based on public‒private companies, to be established in the space between the fully private economy and public projects. To facilitate this relationship between the public and the social economy, the possibility arose of creating a partnership through participatory budgets. Models of public‒private partnership now include management by philanthropic organizations, by charitable foundations and through worker co-management. In Ecuador, this transition from the public, private and social economic sectors as isolated entities, toward the current mixed forms is a necessary process for the construction of a social and solidarity economy in which human beings and their welfare are prioritized over capital. In this model, production practices, finance and consumption are focused on the improvement of living standards. These modernizing developments, according to Coraggio (2001), made the social economy significantly more visible.

According to the Superintendence of the Social and Solidarity Economy, between 2013 and 2018, organizations within the non-financial sector of the Social and Solidarity Economy (SSE) of Ecuador grew by 186%. There are currently 9,620 associations and 2,661 non-financial collectives, without taking into account organizations concerned with inclusion. The National Institute of the Social and Solidarity Economy (ISSE, 2014) is charged with defining the profile of the SSE based on the 2010 economic census (carried out every ten years), from which it emerged that, of 511,130 economic units, 68.7% correspond to the social economy, and 0.43% to the social and solidarity sector. This shows the importance of the sector to the rate of employment in Ecuador. On the other hand, the ISSE notes that the economic income generated is in the order of just 3.72% of GDP (2018). The sector is considered a de facto part of the productive and subsistence economy, while it is also an important source of self-employment.

Within the global context, the data are also revealing, with the European Union (EU) alone having 2.8 million enterprises and companies of all sizes considered part of the social economy, and these account for 8% of Community GDP (Euromed, 2018). In addition, the European social economy employs more than 19.1 million workers, 82.8 million volunteers and 232 million partners in collectives, mutual societies and similar entities (European Commission, 2019). According to the International Collective Alliance (2019), collective members make up at least 12% of the world’s population and employ 280 million people worldwide, in addition to contributing significantly to generating stable employment (CICOPA, 2014). Consequently, the International Labor Organization (2019: 14) states that:

A. LUQUE GONZÁLEZ, P. R. SOLÍS BENAVIDES, M. B. ARAGADOVAY SISLEMA 3 48

“The varied organizational forms that comprise the SSE can be found all around the world, and have been important players in the process of economic and social development in a variety of economic activities and geographical and cultural contexts”.

Due to the scale of the sector and its impact, and to the need to generate comprehensive and sustainable interventions, it is necessary to carry out an analysis of the social factors that affect the sustainability of SSE enterprises; for example, according to Jaramillo, Morales, Escobedo and Ramos (2013), infrastructure and equipment is often abandoned as a result of a lack of planning and focus. However, there is a significant legal framework in Ecuador related to the fostering and promotion of the SSE. The National Assembly (2008), in Article 57 of the Constitution of the Republic of Ecuador of 2008, recognizes collective rights and different forms of expression and organization. Article 276 of the same document provides for the possibility of building a structure for progress with “a fair, democratic, productive, socially conscious and sustainable economic system based on the equal distribution of the benefits of development and the means of production” (: 35), and of integrating, within the domestic regulatory framework, socio-cultural, administrative and economic activities that help preserve national integrity. Article 283 makes a definitive pronouncement within the constitutional mandate, stating that “the economic system is social and cooperative” (: 141). This shows a structural change with respect to the 1998 Constitution, which recognized the social market economy as the defining form of domestic economic organization and placed the private equity sector at the heart of public policy. Cardoso, writing in the book, Insituto Nacional de la Economía Popular y Solidaria [National Institute of Social and Solidarity Economy] (2014, p. 96), describes how this situation was modified:

“Financial inclusion simply meant bringing those populations that had no access to financial services within the reach of the system dominated mainly by private banks and, therefore, making the assumption that financial inclusion was synonymous with banking. The purpose was to create the conditions for formal banking to be extended from its areas of interest in big business toward providing credit and financial services for the low-income population, which implied giving support to micro-credit and micro-finance approaches. A great effort was required of large banks in order to adapt their supply systems, methodologies and technologies to the generation of low-volume financial and credit services that depend on the small-scale financial requirements of small capital firms and micro-enterprises”.

The Organic Code of Planning and Public Finance (COPFP) gives guidelines to the executive in regard to non-refundable lines of investment; these must be agreed by the pertinent institutions of state – by suitable planning for the implementation


of investment programs and projects – to support productive entrepreneurship in the SSE (National Assembly, 2010). Within the same context, Article 4 of the Organic Code of Production, Trade and Investment (COPCI) establishes the need to “encourage the production, trade and sustainable consumption of goods and services, with social and environmental responsibility, as well as their commercialization and use of environmentally clean technologies and alternative energies” (: 3); and paragraph 1 of the same document highlights the importance of “encouraging productive development in areas of poor economic progress” (National Assembly, 2010: 4). These legal provisions point to a paradigm of acknowledgement, fostering and promotion of the various individual, associative, cooperative and community initiatives that are enshrined by the promulgation of the Organic Law of the Social and Solidarity Economy (LOEPS). A challenge for the future would be to evaluate the implementation of this legal framework and assess the decentralized state structures and decentralized local authorities on which these precepts are based (National Assembly, 2011).

The importance of carrying out research and creating proposals that seek ways forward in associative entrepreneurship is underscored by domestic legislation in relation to the recent past, in which support was also provided by the so-called third sector. There remains the question of why it is common to find a significant amount of infrastructure and equipment, under SSE ownership, that is under-utilized, or in a state of deterioration. There is no specific information on this phenomenon, since what would point to administrative incompetence is seemingly a taboo subject among public and private institutions. In order to verify that this reported waste of resources was, in fact, a reality on the ground, various inspections and exploratory observations were made. In the Free Union Association of the province of Pastaza, a milk pasteurizing plant, installed in 2010 and financed by public funds, has yet to be put into operation. Another example was found within the Corporation of Huaconas and Cullugtus Rural and Indigenous Organizations (CHCORI) of Colta County in the province of Chimborazo, where social breakdown caused by political conflicts has led to the under-utilization of a cheese processing plant financed by international cooperation funding. In this first analysis of unconsolidated ventures, failure appears to follow from a lack of social cohesion, together with errors in planning and design in investment projects. It is also worth noting that the national poverty rate in Ecuador stands at 23.2% of the population and extreme poverty is at 8.4%. In the rural areas, poverty reaches 40% and extreme poverty, 17.7%, isolated exceptions notwithstanding (INEC, 2019). Such circumstances do not help the consolidation of SSE processes.

Sepúlveda and Gutiérrez (2016) highlight the key factors affecting sustainability in entrepreneurship, and the Historias Prácticas [Practical Histories], compiled by the Superintendence of the Social and Solidarity Economy (2016), appears to bear


out this view. It is clear that most projects have been aimed at financing productive assets, infrastructure and equipment to the neglect of social and anthropological areas of development. There has been no emphasis on the process of training human capital and leadership, or dealing with issues of gender, associativity, governance or parliamentary procedure within collectives, all of which have conspired to impede sustainable processes.

This research focuses on the analysis of the reports by the 109 ISSE officials that constitute the totality of the institute’s personnel, nationwide. To this end, an analysis of the social factors that influence sustainability was carried out, motivated by the ephemeral nature of many of the enterprises and the significant waste of public and private resources that fulfill no apparent social or economic purpose. These provide a wealth of phenomenological perspectives and views that allow an evaluation of whether or not the results are attributable to the actions that have been implemented in the various SSE programs or projects in Ecuador.

THEORETICAL FRAMEWORK

Sustainability has become a fundamental concern impacting regional development in Ecuador. The imbalance of man versus nature stands out as a vital issue in a situation in which legislation is geared to favoring transnational companies, with the blessing of all kinds of supranational bodies that give their consent to, and normalize what should be exceptional situations (Luque and Jiménez-Sánchez, 2019). The obvious environmental impacts and social inequality form a parallel reality within contemporary society. Since the 1960s, there has been an evident need to address these issues, but only from the early 1990s did local authorities cautiously start to intervene in the processes of sustainable local development (Bermejo, 2014; Morales, 2006). Sustainability processes are conceptualized as a set of knowledge, skills, abilities and values that the members of an organization, company or territory possess in order to address their problems (Krohling, 2015; Aznar et al., 2014; Fernández and Geba, 2005). These knowledge sets are based on sustainability criteria, that is, having the necessary know-how and awareness, and being capable of valuing work related to the environment. To achieve this, it is necessary to rely on various forms of capital: human, physical and environmental. Within a non-profit organization, sustainability is also part of social accountability or social balance. According to the study, Indicators of Tourism Sustainability Applied to Industrial and Mining Assets: Evaluation of Results in Some Case Studies, conducted by Pardo (2014), sustainability can be measured by the indicators set out in Table no. 1.


Table no. 1

Sustainability indicators

Components Levels

Management Components (MC) Provision of economic funds Economic contribution of local entities.

Social and Economic Components (SEC)

Benefits for the local community Collaboration of the local population Improvement of infrastructure Increase in equipment Creation of new employment Local sourcing of workers

Cultural Components (CC)

Level of client or consumer satisfaction Boost to local culture Stimulation of the local cultural offering Carrying out of parallel external activities Level of community satisfaction

Environmental Components (EC)

Level of environmental recovery Aesthetic considerations of the recovered environment Use of renewable sources of energy Application of energy-saving measures Connection of infrastructure to the natural environment

Source: Author’s own criteria based on the study of Indicators of Tourism Sustainability Applied to Industrial and Mining Assets: Evaluation of Results in Some Case Studies. Pardo (2014).

Sustainability The sustainability of an enterprise is based on factors such as human,

economic and environmental capital. For SSE organizations, this conceptualization is interwoven with society, in addition to being part of the processes of social accountability and social balance (Fernández and Geba, 2005). Ensuring sound sustainability processes requires the knowledge, skills, abilities and values of those involved to overlap between work and the environment, in accordance with the Sustainable Development Goals SDG 2030 (Bassols, 2014; Linares and Morales, 2014; Sachs, 2014).

Sustainable development According to the European Council of Gothenburg 2001, sustainable

development in SSE initiatives comprises three dimensions: social, economic and ecological. In the first case, it is necessary to have indicators of inter- and intra-generational equity and, especially, of the way in which some groups seek to dominate others. With regard to the second dimension, the economic structure itself should be questioned, and the model of wealth accumulation should be altered in favor of the analysis and interpretation of the dynamics of ecology and inclusion. Finally, in the third area, the possibility of using renewable resources in


economic processes should be explored, in order to prevent excessive waste, with the exception of biodegradable products such as compost (Guerra 2014; Artaraz, 2001). It is worth recalling the words of Arjen Hoekstra (2019), inventor of the concept The Water Footprint: “Water has no place in the world economy and trade”. At the Conference on the Human Environment, held by the United Nations in Stockholm (1972), converging topics on development and the environment were discussed and analyzed, concluding that development models are linked to social, productive, economic and environmental aspects so as to inexorably guarantee fair and ecologically viable socio-economic growth in harmony with nature; this type of development is called eco-development (Sepúlveda and Gutierrez, 2016; Estenssoro, 2015; Gudynas, 2003). In this context, ideas are rolled out aimed at overcoming the problems of underdevelopment, deprivation, poverty and the environment, especially in countries considered part of the Third World. According to the United Nations (2019):

“Roughly half the world’s population still lives on the equivalent of about US$2 a day with global unemployment rates of 5.7% and having a job doesn’t guarantee the ability to escape from poverty in many places. [...] Sustainable economic growth will require societies to create the conditions that allow people to have quality jobs that stimulate the economy while not harming the environment”.

Sustainable development, or eco-development, is a form of economic and social development in which the environmental variable must be taken into account by ensuring quality of life within the ecosystem, adapted to the characteristics of each sustainable territory, thereby becoming sustainable over time and humanistic in approach.

Determining factors for sustainability of entrepreneurship in the SSE These factors are categorized into internal aspects, as well as (to) those

relating to the ecosystem. SSE sustainability processes depend on the skills and attitudes of the workers, and also on the possibility of cooperating with other economic units in social, cultural, economic, political and environmental contexts. These, in turn, are framed in the three sectors of government, private enterprise and the social and solidarity economy (Luque et al., 2018; Krohling, 2015; Guerra, 2014; Coraggio, 2011).

Without taking into consideration social indicators, such as the satisfaction of needs and improvement in quality of life ‒ which show significant gaps ‒ and without an analysis of cultural or environmental impacts, rural enterprises are characterized only by their financial and economic approaches (Quiroga, 2001). From the point of view of rural development, sustainability is a key element, as it focuses on mitigating problems such as the deterioration of water resources and


biodiversity, desertification, the fight against poverty and the integration of excluded social groups (women, youth, migrants, indigenous groups and people of African origin, among others). In this context, sustainability factors fall within the sociocultural, economic, environmental and institutional political order (Sepúlveda, 2008). According to the study, Determinants of Sustainability Factors in Rural Agricultural Enterprises, carried out in four regional departments of Colombia (Antioquia, Cauca, Nariño and Valle del Cauca), rural sustainability is limited to two components and three sub-components: 1) Socio-Organizational, including social capital, organizational planning and territorial integration; 2) Business, including economy, technological productivity and market orientation.

According to Rodríguez et al., (2017), the definition of the sustainability index brings together the most successful enterprises with those that have shown poor results from their activity. The least successful are those in the context of technological productivity and market orientation, and the most successful are located within the context of social capital and integration. According to López, Astudillo, Carpio, Delgado and Amón (2011), in the analysis of the factors that influence the entrepreneurship and sustainability of companies in the city of Cuenca, Ecuador, the external and internal factors that both promote and limit the sustainability of entrepreneurship are: financing, market conditions, legal frameworks, educational level, business behavior and motivation. Therefore, it is beneficial for such enterprising behavior to have a positive impact on entrepreneurs through the setting of goals, encouraging persistence and trust, and providing fulfillment.

Social aspects The various intervening agents in the SSE must also be analyzed, including

organizations, supporting entities and consumer groups. Max-Neff, Elizalde and Hopenhayn (1986), make reference to the Abraham Maslow pyramid, arguing that, in a social context, motivation is to be found in the search to satisfy basic needs. These are classified from physiological, to those of safety and belonging, and ultimately to self-esteem and self-realization. Individuals toward the top of the pyramid have already satisfied the limitations found at the base. In organizations of the solidarity economy, the entry and exit of partners are usually determined by kinship or close friendship, albeit without strict legal process. At the same time, politics is the determining factor in decisions taken for the common good, which often leads to notorious problems arising from the management of social relations and the level of governance. In response to this analysis, the most effective way of encouraging economic and social inclusion is by promoting initiatives arising from the solidarity of the community (Arboleda and Zabala, 2011).

The Ecuadorian citizen has a mental schema in regard to SSE entrepreneurship that precludes the possibility of developing economies of scale and competitiveness; there is a persistent belief that the goods, products or services of this sector are of


low quality (Coraggio et al., 2010). There is also the perception of poor management by institutions and assistance programs in the public and private spheres, which means that the production chains are insufficiently supported, notwithstanding isolated successful cases such as the Tungurahua Development Agenda (Sanchez, 2016). In regard to other exogenous elements, entrepreneurs must also avoid considering their enterprises to be impoverished or that they are merely micro-enterprises, created by the poor for the poor. Such qualifiers tend to affect the entrepreneur’s subconscious and diminish confidence, motivation and the drive for achievement (Graña, 2002). Therefore, social psychology is an aspect in need of analysis for its contribution to the social development and strengthening of organizations; it is important to remember that social constructs must have strong foundations and be sensitive to the negative effect that certain labels that are applied to them may have.

Culture, politics and religion As suggested by Vera, Rodríguez and Grubits (2009), there is an ongoing

dispute, at the social level, between individualism and collectivism. This arises from the need felt by enterprise partners to gain social, economic and political status, and to leverage power relations that confer some level of prestige. From within, organizations culturally define the conditions of inclusion and exclusion by age, gender, ethnicity, educational level, economic circumstances, place of residence or place of birth, and nature of leadership. Meanwhile, the widespread recognition of partisan political choices, paradoxically, does not lead to greater humanism in these processes (Kehl, 1993). It should be borne in mind that SSE entrepreneurship is developed around values and traditions, customs and social relations, and that the sustainability of rural development depends fundamentally on the conservation and dynamism of communities.

To this end, it is necessary to guarantee such aspects as cultural legacy, traditional wisdom and the use of knowledge, as well as preserving a sense of belonging and identity within the historical, cultural and environmental heritage of each people. The ties to outsiders are based on the precepts of creed, while the conception of faith influences levels of trust, and, above all, the model of coexistence and the practice of values and principles (Valenzuela and Cousiño, 2000). The association between peers is a kind of relational capital, analogous to an insurance policy, mitigating the attrition of daily life. Although not all problems may be offset in this way, such associations constitute refuges against the buffeting of everyday existence (Vasquez, 2010).

Associativity This is a social construct, operating in the long term, in which the associated

parties are often somewhat inexpert. In many cases the association is not one of


reciprocity, but is based merely on individual interests, since the entry of partners into an organization is permitted for the temporary expedient of allocating financial resources, rather than out of a need to implement the processes of production, collection or marketing, or of implementing the financial associations that are typical of a solidarity economy. As a result, it is easy to lose sight of the governing principles of social enterprises, such as solidarity, reciprocity, and redistribution, among others (Coraggio, 2001). What is more, associativity is an aspect of competitiveness from which management models are implemented that allow decision-making processes focused on sustainability over time. It further assists in the development of effective organizations that enjoy friendly relationships with their partners, and it encourages their ability to negotiate and build institutionalism. Such conditions for sustainability should be oriented toward management, administration and marketing aspects (Bedregal, 2014; Polo, 2013; Sepúlveda, 2008).

Education Mere training processes are an insufficient response. In rural development, a

transformation of the skills of the farmer is needed, improving not only agricultural knowledge, but also abilities in leadership and management, while technical knowledge as a plant operator or commercial specialist is also desirable. Organizations must become oriented to taking responsibility for the surpluses and profits arising from economic activity rather than limiting themselves to a simple interest in pursuing scarce sources of employment (Luque et al., 2019). Education is, therefore, a determining factor in the success of SSE entrepreneurship. Internally, operability will depend on those areas of knowledge that the enterprise partners possess, as well as on the environment; whether efforts aimed at fostering self-employment succeed, will depend on training policies adapted to factors such as age, literacy or educational level (Ortiz and Millán, 2011).

In response to this, local initiatives aimed at developing the economy have arisen. Movements such as Un Pueblo un Producto [one people one product] (UPUP), or common characteristics such as productive pride, culture, landscape and environment all drive regional ventures that may be considered examples of endogenous development. This approach has the following characteristics: 1) local people are in charge of the initiatives; 2) local agents involved in businesses, production cooperatives and those local people who, ultimately, are the consumers all work together as members of the same community; 3) there is a high level of planning and internalization of the process; 4) investment from abroad is not prioritized; 5) small-scale investment is encouraged and external resources are accepted, as long as there is control over them by local people; 6) the use of locally available resources is identified and extensively planned; 7) local governments provide support and orientation for processes, but do not control them; 8) opportunities are shared by all members of a local community and are not monopolized by a few;


9) local authorities (devolved regional governments, prefectures and municipalities) promote the development of the capacities of the local population (Noda, 2014).

Models of intervention in sustainable development Models should not be standardized mechanisms as not all organizations share

the same value system, interpret reality in the same way, have the same ability to overcome obstacles or adapt to changing circumstances (Canedo et al., 2014). By way of example, the corporate management model set out by Mondragón has, as its starting point, the basic principles of the cooperative. These provide behavioral guidelines to those involved, who, in turn, design and execute shared projects through participatory organization. Likewise, projects are planned and executed in a product-market context, with customers, suppliers and associates in a competitive environment. The profits corresponding to the enterprise partners are the main means of assessing efficiency, by selecting relevant indicators for verification (Mondragón, 2012).

METHODOLOGY

Sustainability analysis in the processes of SSE is complex. Existing correlations are difficult to identify, reproduce and disseminate in the existing context, due to their ethnography. Any analysis must be based on a qualitative-quantitative research approach as established by the National Institute of the Social and Solidarity Economy (ISSE), taking into account the main social factors that influence the processes of sustainability through SSE entrepreneurship. Consequently, over the course of six months, data in the form of numerical scores and appreciation frequencies were processed and analyzed with regard to their level of influence (Hernández et al., 2014; Kayatama, 2014). Some of the components that influence SSE sustainability in its socio-political aspects were identified and validated descriptively (Bernal, 2015; Hernandez et al., 2014). In addition, through the research tool, and using explanatory-experimental analysis, it is possible to establish the cause-and-effect relationships, and the behaviors that encourage them.

Variables of the study The internal and external factors that influence the sustainability of SSE

entrepreneurship are considered independent variables from a social perspective. Various indicators for this category were defined and are described in Table no. 2; these served as the basis for the research tool design in which the primary information was developed (Soriano, 2014). The dependent variable is the sustainability of the entrepreneurship of the social economy, which has been revised following the guidelines of Coraggio (2011).


Table no 2

Operationalization of the social variable

Concept The sustainability of SSE entrepreneurship depends on the balance of social factors within organizations and in harmony with the entrepreneurship ecosystem (environment).

Dimension Social

Indicators Associativity Political aspects Culture and Education

Basic items Causes of individualism or collectivism?

What factors affect the governance of the association?

What is the level of education of the partners?

Factors that build self-confidence?

How the gender and equity approach is applied within the organization?

Level of technical training in entrepreneurship?

What aspects demotivate social organization?

How leadership is fostered?

What alternative spaces for recreation and communality are fostered in the organization?

How to drive the need for achievement?

What causes or conditions lead to internal conflicts? Impact of legal regulations?

Age of business partners?

What is the level of knowledge of partners and the aptness of statutes and regulations?

How generational replacement is motivated?

How religion impacts organizational harmony?

How party politics affects the cohesion of the organization?

Techniques Survey of officials of the National Institute of the Social and Solidarity Economy

Instruments Questionnaire in Google Forms https://forms.gle/SY5oTLnqjdVQbjJA9

Source: Author’s own data.

Research techniques According to Torres, Salazar and Paz (2014) and Palella and Martins (2012),

surveys are the most suitable instrument for collecting and recording information. The survey used in this research was reviewed and approved by the National Director of the ISSE, Diego Castañeda, in order to permit its subsequent application by the 109 Institute officials around the country, which constitutes the totality of the operational team. This was to ensure that the results obtained are representative, effective and quality-assured. The following procedure was followed:

1) Letters of request were prepared and forwarded to the National Director of the ISSE in order to obtain authorization to open the research process.


2) The survey questionnaire was designed in Google forms based on the items and indicators identified in the operationalization of the identified variables.

3) The questionnaire, https://forms.gle/SY5oTLnqjdVQbjJA9, was reviewed and approved by the ISSE; a pilot test was applied to five people in order to establish the taxonomy of inconsistencies.

4) The objectives of the study were made known to the concerned parties. 5) A meeting was called to set dates for the release of the survey. 6) The survey was released via the National Directorate of Human Resources

of the ISSE. 7) The quantitative data was processed and the phenomenological concepts,

criteria and perceptions were extracted for analysis. 8) The results were made known to the National Directorate of the ISSE.

RESULTS AND ANALYSIS

The interpretation of phenomenological concepts and views obtained and processed from the survey, as well as the quantitative interpretation of the criteria obtained all served to inform the views of the ISSE officials concerning the analysis of social factors influencing the sustainability of SSE entrepreneurship. It was found that SSE ventures face sustainability difficulties over time, such as limited resources, precarious financing, marketing difficulties, high production costs due to relatively expensive materials, and, above all, internal conflicts and lack of management capabilities. Each of these are subject to analysis and discussion in the following sections. It is clear that public and private institutions, and support agencies must give greater impetus to entrepreneurship through planned actions with specific investment, in order to achieve real growth in SSE organizations. At all times, it should be borne in mind that sustainability processes contribute significantly to lower unemployment rates and the creation of fair employment.

Association relations With regard to associativity, according to 77.8% of respondents, membership

of a group is motivated by individualistic interest and not out of the need to promote the values and principles of the SSE. This is confirmed by the fact that, in the view of 76.3%, individualism can be observed within organizations, and this acts as a demotivating factor for 51.23%. It should be pointed out that legally recognized organizational structures are not attributable to any public or private institution, but support entities may appropriate these out of their own interests and institutional agendas. It is evident that associativity within the SSE in Ecuador responds to transitory private interests. In certain circumstances, these interests are fostered by managers of public institutions with whom organizations need to comply through quantitative plans, programs and other aspects. This leaves aside the


qualitative factors of organizational strengthening, the improvement of management capacity, and the promotion of partisan politics, much of which has its origin in the processes of social irresponsibility (Luque and Herrero-García, 2019). The exceptions to this situation underline the fact that there are associations that are capable of being strengthened by the constant practice of principles such as: commitment, loyalty, solidarity, reciprocity and the common good, all of which are aimed at improving the quality of life.

It is recognized that in today’s society there is a tendency to work individually. Human beings grow in a hegemonic environment in which, from the early stages of education, autonomy is promoted and the competitiveness of the productive and reproductive aspects of life is fostered. The partners of SSE organizations retain a culture of making the least effort, and when there are no immediate positive economic results, abandonment and break-up ensue. Many organizations, especially those in the rural sector, are unaware of the supervisory obligations to which they must be subject when acquiring legal status. Non-compliance with these results in conflicts, breaking existing cohesion and causing demotivation. In Ecuador, the implementation of policies to foster and promote the sector have not been sufficiently clear and specific; for 20.4% of those surveyed, the services offered by public and private entities are clientelistic and lack long-term vision, allowing private capital firms to intrude on, or become associated with SSE organizations. These are frequently based on spurious legal grounds, with the purpose of benefitting from public procurement processes. The opening of these processes by the state for SSE organizations to provide goods and services led to a 300% increase in associations between 2016 and 2019, largely motivated by monetary interests, and harming those organizations that had been established between 2013 and 2015 in strict observance of the principles of the social and solidarity economy. Ten years after SSE became enshrined in national legislation, it is clear that the implementation of public policy does not meet the original requirements, since there is no true differentiation of treatment by institutions such as the National Public Procurement Service (SERCOP), the Internal Revenue Service (SRI), the Health Control and Regulation Agency (ARCSA) or the Superintendence of Control and Power of the Market (SCPM).

The need for collective achievement Individualism and associativity for the exclusive interest of gaining access to

clientele programs clearly reflect the lack of drive for collective achievement; 62.4% of respondents state that the creation of associative structures does not lead to collective processes of participation and suitable procedures for decision making and problem solving. In the analysis of the criteria, this also raises the question of what control organizations and bodies should promote and ensure mandatory compliance and the assessment of corporate objectives.


The governance of SSE organizations This refers to the way in which social groups exert power and authority; it is

subject to alteration when the rights of the partners are not respected. The research data highlight the fact that 17% of the partners of the different organizational structures require constant information on administrative and financial functioning, and periodic checks of accountability, in order to ensure transparency. Indeed, a lack of transparency leads, in 13% of cases, to suspicions of corruption and, in turn, to internal conflicts and crises of governance (Luque, 2018).

Influence of the gender equity approach on the sustainability of SSE entrepreneurship

According to 90% of respondents, the failure to implement this paradigm has a medium-high effect on the sustainability and stability of SSE organizations. In the interpretation of results, this concept refers principally, and in the same percentage, to the physical differentiations between male and female, and to a lesser extent toward the view of equal opportunities.

Leadership styles in the sustainability of SSE enterprises The ability to influence people is certainly not a common skill. When

leadership is toxic, according to 82% of those surveyed, it creates a sense of rivalry, and often results in those under such leadership seeking to satisfy their own needs before worrying about those of others; a negative leader puts self-interest before the community and encourages the disintegration of the organization by taking advantage of it for personal benefit. However, in response to such behavior, much will depend on the maturity and collective leadership of the group in letting itself be influenced by an unsuitable leader. The promotion of good leadership should be reinforced by participation and training prior to the legal creation of the SSE organization; 16% of those surveyed believe that it should be made a legal requirement that partners pass a course of governance and leadership training before being granted permission to begin operations. This would help to promote certain values in organizations, such as commitment, empathy, integrity, proactivity, creativity, honesty, responsibility, joy, tolerance, authority, participation and transparency. Finally, it is vital that the cultural belief be erradicated that an entire organization should be subject to the authority of a single individual.

Religion and sustainability as factors that foment internal conflict In the view of 56% of those surveyed, there is no influence of religion on the

social sustainability processes of entrepreneurship. It is emerges that, for the most part, this is a question on a personal level and, in organizations, common economic and social objectives tend to carry more weight. However, 40% of respondents


stated that religion defines culture, and, in some regions, this factor interferes with working practices.

Influence of party policy on the cohesion of SSE organizations and on internal conflict

According to 81% of respondents, the influence of party policy is negative because of the way the clientele operates in political organizations at election time. Partisan expediency eventually determines whether enterprises are supported or not, and ideological differences between partners create conflicts that, undoubtedly, lead to lasting disputes and barriers within organizations.

Educational level and its consequences According to 96% of respondents, there is a clear relationship between a low

educational level and sustainability. This is a paradigm that must be broken, since there are clear socio-cultural indicators that access to opportunities is subject to the level of studies achieved. Training that is currently being provided within the SSE sector demonstrates that individuals are able to emerge with a suitable degree of expertise in the use of their skills and abilities.

Among those surveyed, 45% think that knowledge provides the tools for effective participation and promotes growth; formal education positively impacts results and fosters different visions of social constructs. It is recommended that state policy be reoriented to promote educational programs, including intensive programs for high-school diplomas with an entrepreneurial focus. In designing training initiatives, the following deficiencies should be borne in mind: 1) most partners have an elementary level of knowledge in relation to national educational levels, and few opportunities to access formal higher education; 2) there is widespread technological and legal illiteracy, and the lowest levels of training are closely linked to the most vulnerable sectors; 3) SSE organizations do not have the resources to undertake the training and up-skilling of their partners; 4) the partners of organizations possess empirical knowledge of production processes, and rely on external expertise in order to make any improvements; 5) there are exceptions to be found in the self-education and training of some leaders.

Technical training for entrepreneurship 78% of the group studied claim that the partners of the SSE organizations do

not have sufficient training for the sustainability of their enterprises, with a particularly lack apparent in regard to management skills. This problem is greater in the rural sector due to the limited access to formal education there. Even the younger generations entering the sector have difficulties in accessing higher


education, according to 87% of respondents, since poor high-school provision in rural areas puts them at a disadvantage in university entrance examinations, resulting in few being able to find places at state universities.

Alternative spaces for recreation and social harmony To foster these aspects, the criteria compiled by the ISSE team have been

adopted, these include: 1) the development of collective activities such celebrating events of common interest, providing camps, sports facilities, group walks, bingo and exchange and barter clubs; 2) the creation or improvement of financial services tailored to existential and axiological needs as expressed by Max-Neef and Zemelman; 3) the fostering of community work; 4) The promotion of interrelationships between SSE organizations leading to the creation of exchange networks; 5) raising awareness of the SSE through educational techniques with an emphasis on communication and experiential training in schools, colleges, universities, neighborhood associations and communities, leading to endogenous development and promoting local consumption; 6) the establishment or improvement of socio-cultural spaces aimed at reducing stress and promoting health and a positive mind-set; 7) the promotion of dialogue, assertive communication and constant reflection on common social and economic problems; 8) the promotion of volunteer partner programs to provide mutual help in caring and family-related tasks; 9) the construction or improvement of the physical spaces where SSE organizational activity takes place, leading to increased cooperation, sharing, solidarity, equity and inclusion; 10) the provision of seminars, conventions or forums, by supporting agencies to encourage reflection on strategies aimed at strengthening the SSE.

Solidarity in SSE organizations Of the criteria set out in the survey, for 85% of those studied, solidarity within

the SSE organizations is understood to mean support for others’ concerns, and is manifested in initiatives such as: 1) the formation of savings banks, mutual banks and syndicates; 2) joint participation in social and cultural activities; 3) the provision of direct economic support for participants from vulnerable groups; 4) the equal distribution of profits and surpluses; 5) the creation of caring environments that meet the needs of identity and economic and social inclusion, in which positive and negative experiences may be shared; 6) the promotion of fair trade, and the exchange of goods or services in local, regional and national networks; 7) the practice of values such as transparency, respect and empathy; 8) environmental awareness; 9) the elimination of competition between small producers and the drive to join forces toward building economies of scale; 10) the conservation of non-renewable resources and the promotion of recycling; 11) the creation of job opportunities for disadvantaged sectors in skilled, non-professional employment.


Impact of legal regulations For 41% of the group analyzed, the current legal regulations for the SSE do

not differentiate among the operability of the different sectors that it comprises. This is due to a lack of awareness and clarity in regard to this sector by authorities at all levels of local and national government, with the result that little importance is given to legislation and the necessary legal reforms.

CONCLUSIONS

Associativity In interpreting this phenomenological knowledge, it was observed that, in

Ecuador, SSE agents are unaware of the importance of acting together and it is clear that individuals, for the most part, are only associated in order to access certain benefits, such as being in receipt of investment projects and state contracts, or because of the exclusive need to generate economic resources without putting collective interests before those of individuals. As a medium-term process, associativity by interest is encouraged by the failings of support entities, which include a lack of planning, a sporadic implementation of interventions, and a general absence of methods aimed at strengthening organizations. In addition, the actions of the clientele bypass the control mechanisms that are in place. These shortcomings lead to distrust among partners, many of whom opt to abandon the enterprise.

This research shows that cultural individualism and the lack of institutional and educational action obscure the concept that an association of SSE is in fact based on: the common good. It may also be considered that no policies or interventions are implemented that seek to break the cycle of selfishness and cultural individuality; this is favored by weak generational replacement and the adoption of organizational structures in order to meet specific demands for public procurement. These factors sometimes lead to a kind of organizational cannibalism. To meet this difficulty, it is considered necessary to reinforce actions and activities aimed at improving the relationships of trust between partners.

Of the respondents, 53.2% state that, in order to generate and strengthen this social construct, the state must take the lead in promoting continuous training and development, within an environment of equitable power relations and common success. Additionally, 23.9% of those polled recommend the establishment of internal systems that recognize and reward the fair and effective participation of partners in the life of SSE organizations.

Political aspects It is acknowledged that governance practices are not a part of standard

procedure and, within SSE organizations, there are doubts about their legitimacy.


For 16% of partners, there is ignorance of internal regulations, which leads to non-compliance with rules. Another significant finding of the research indicates that 75% of directors often practice vertical leadership that does not respect these laws: management is carried out as if the venture were their private business. According to 13% of those surveyed, intolerance caused by differences of religion and political ideology, especially party loyalty among partners, negatively influences governance, as does the lack of intercultural considerations, failure to implement gender equity, the lack of transparency and the non-participation and exclusion of young people.

For the improvement of gender relations and equity, certain actions might be implemented, such as: 1) promoting public regulations that ensure the equal participation of men and women, in organization policy areas; 2) providing specialized training for the empowerment of vulnerable groups; 3) generating socio-cultural spaces to promote the engagement of families; 4) promoting a culture of respect and rights, teamwork, fair treatment and equity in formal educational spaces and from an early age.

A reform of the Organic Law of the Social and Solidarity Economy (LOEPS) is proposed, so as to provide for incentives applicable to organizations that implement the equity and equality approach, and to ensure the payment of fair wages based on equal work between men and women.

When individual beliefs are not respected, internal conflicts often occur. For example, the church, state and families often assign women a leading role in the tasks of the home and in the reproductive role in the family, thus diminishing opportunities for education and training; meanwhile, other religious beliefs actively promote the obedience and subordination of women.

The influence of religious beliefs on entrepreneurship can be positive when they promote a sense of the common good and condemn the practices of corruption. There are enterprises constituted by religious groups that function effectively, and whose beliefs provide motivation to meet goals.

The Organic Law of the Social and Solidarity Economy contains legal lacunae that are easy to adapt to the requirements, processes, objectives and interests of whichever party is in power at both the national level and at all levels of the decentralized, autonomous governments (regional governments, municipalities and parish councils). There are shortcomings also in the construction of the legal regulatory framework since this is not proof against a political party legislating in favor of other trends and ideologies prejudicial to the sector.

Culture and education While educational level is an important factor for improving the outcomes of

entrepreneurship, especially in the financial and managerial areas, the role of practical experience should not be ignored. Illiteracy today takes many forms, and practical knowledge of how to use technology to access virtual platforms for administrative procedures and make use of legal resources is also of vital importance.


In contrast, a low level of studies is linked to poor self-esteem, and leads to partners being subject to the leadership of those with a higher level of education and their decisions, whether good or bad. Meanwhile, changes aimed at improving this situation are difficult to evaluate; results indicate that a general lack of analytical capacity allows leaders that are not fully competent to manage associations for their own convenience.

The natural vocations of partners (or the roles in which they best perform) are within the productive areas, yet there are indications of willingness to take the lead in social development processes. However, it can be concluded from the observed criteria that the regulations governing the financial sector of the Ecuadorian social and solidarity economy do not facilitate the design of credit products that approximate to the operational and capital requirements of the real SSE sector. A differentiated regulatory framework is required in respect of social security and labor, with tax incentives and recognition of economic acts of solidarity between organizations. The results of the qualitative research into the institutional vision of ISSE officials on the creation of social spaces or activities indicates these would help establish environments of trust and mutual respect. Furthermore, a deeper level of understanding of one another’s circumstances might be achieved by strengthening social bonds, improving levels of associativity and encouraging participation in decision-making.

The research reported here indicates that a new vision is possible for the SSE sector, starting from the reality on the ground. It should be noted that there is little regional information available and, therefore, the factors influencing social sustainability in local contexts must be inferred. The results demonstrate that the paradigm of intervention currently prevalent in Ecuador must be broadened from a narrow economic and financial approach to systematic models that address the comprehensive range of factors revealed in this study. The current policy aimed at fostering entrepreneurship, in fact, promotes associativity by interest, individualism, misrule and cannibalism among associative groups, and gives little consideration to aspects that influence the consolidation of the social foundation.

The challenge remains to review the current legal framework governing the social and solidarity economy in Ecuador with a view to adopting and adapting comprehensive interventions and management models based on considerations of the welfare of the population. This, in turn, challenges the academic community to investigate the establishment of various archetypal models of organization and integration. This research represents a gateway to understanding the SSE and its social reality at the local level, and serves to redefine concepts and reflect on the institutions implicated and their compliance with their role as assigned by the constitution. The findings, as revealed to date, show that a deeper analysis is needed of the use of public funds for the consolidation of the social and solidarity economic system in Ecuador.


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rezentul studiu se înscrie în cadrul economiei sociale și solidare din Ecuador. El este o diagnoză a percepției asupra modului în care factorii sociali influențează sustenabilitatea antreprenoriatului

social. Perspectiva prezentată aici este rezultatul pragmatismului serviciului civil ce îl oferă Institutul Național al Economiei Sociale și de Solidaritate și poate fi considerat drept bază teoretică pentru designul și implementarea unor intervenții instuționale de largă răspândire la nivel național. Pe baza rezultatelor acestui studiu, se impune modificarea actualei paradigme de acțiune în implementarea programelor, proiectelor și evaluării realității în care operează sistemul la primul nivel și al impactului factorilor sociali care sunt parte din acest ecosistem. O reflecție asupra componentelor ce au avut succes, asupra limitărilor și asupra considerațiilor ce țin de partea operațională conferă perspective asupra căii de urmat pentru acest sector și oferă linii directoare în stabilirea proceselor de participare, echitate socială și incluziune economică și socială. Rezultatul cercetării este un instrument inovativ care poate fi folosit pentru a obţine informație relevantă și referințe, cât și orientare în vederea cercetărilor viitoare asupra bunei practici sustenabile din punct de vedere social.

Cuvinte-cheie: diagnostic; factori; sustenabilitate; antreprenoriat.

Primit: 29.11.2019 Acceptat: 12.02.2020

P

CONTRIBUTIONS OF THE SOCIAL AND SOLIDARITY ECONOMY TO THE IMPLEMENTATION

OF THE SUSTAINABLE DEVELOPMENT GOALS AND THE CONSTRUCTION OF EVALUATION INDICATORS: THE CASE OF A SETTLEMENT

IN ARARAQUARA, BRAZIL

LEANDRO PEREIRA MORAIS MIGUEL JUAN BACIC

n Brazil, and in many other countries, the Social and Solidarity Economy (SSE) has been an innovative alternative for job and income generation, and a solution to cope with social and

labor inclusion, in the last two decades. It can also be considered a new, more humane and inclusive model of development. This fact contributes to improving the quality of life, both for people and their communities, especially those with social and economic disadvantages. This conclusion led the United Nations to recognize the SSE as one of the auxiliary contributions to fulfilling the Sustainable Development Goals (SDGs). This is because the SDGs integrate and merge the three dimensions of sustainable territorial development: economic, social and environmental. However, at present, we need conclusive quantitative and qualitative studies and methodologies to be able to “quantify” the effective contributions of the SSE to the SDGs. Thus, this article aims to use a real and innovative experience of municipal SSE, carried out in an area of high socioeconomic vulnerability (Monte Alegre Land Reform Settlement), in the Brazilian municipality of Araraquara (SP), to explain its effective contributions to achieving certain SDGs. With this study, which is still being carried out, we also intend to propose a set of indicators for SDGs 1, 2, 5, 11 and 12, which can be applied in the future, as well as to other SSE experiments.

Keywords: social and solidarity economy; settlements; territorial development; ecosystem; indicators; 2030 Agenda, Brazil.

INTRODUCTION

The 21st century is fundamentally marked by two major characteristics that seem to go hand in hand: 1) significant material advances, reflected in the current

Adresele de contact ale autorilor: Leandro Pereira Morais, UNESP – Câmpus Araraquara, Rod. Araraquara-Jaú Km 1 – Machados – Araraquara – SP – CEP 14800-901 Brazil, e-mail: lpmorais@ gmail.com; Miguel Juan Bacic, Institute of Economics, University of Campinas, Rua Pitágoras, 353 Barão Geraldo – CEP 13083-857 Campinas (SP), Brazil, e-mail: [email protected].


I

2 CONTRIBUTIONS OF THE SOCIAL AND SOLIDARITY ECONOMY 71

technological wave, which some call the “4th Industrial Revolution” and 2) increasing poverty, inequality and social exclusion. In other words, despite advances in economic, financial, productive technical infrastructure, information and communication technology, we still live with alarming levels of multidimensional poverty, growing inequality and income concentration, affecting a large share of the world’s population that lacks basic services, education, health, food, housing etc. In this context, the discussion about the role of the Social and Solidary Economy (SSE) as a real and symbolic instrument to cope with this scenario is pertinent. Therefore, it has been presented in recent years as an innovative alternative for job and income generation and as a response to socio-labor inclusion. In general, the SSE comprises a variety of economic and social practices, which perform activities of production of goods, service provision, solidarity finance, trade, fair trade, and solidarity consumption (Morais and Bacic, 2019). One of the pragmatic ways of demonstrating such potentiality is by exposing existing territorial experiences and how such experiences relate to the goals set out in the 2030 Agenda for Sustainable Development Goals (SDGs). This Agenda is an ambitious and transformative action plan for people and the planet and is based on 17 Objectives and 169 goals.

Thus, we understand that one of the main ways of accomplishing these goals is to apply them locally. In Brazil, many municipal administrators and their advisors, in preparing and executing their respective government plans, incorporate goals and actions in different areas that must align with the SDGs. It is necessary, therefore, to systematize them, as well as to use them as an instrument for implementing and disseminating the SDGs as guidelines for local public policies. The SSE is an important ally when considering this task, given its operative elements (self-management, democratic participation and governance, ties with the territory, reciprocity, socioeconomic inclusion, environmental sustainability, etc.) as well as their impacts on the territory.

From this perspective, this article aims to use the experience of municipal SSE policy application to explain some of the contributions necessary to reach certain SDGs. It also shows that it is possible to apply the objectives derived from the 2030 Agenda at the municipal level, from the perspective of the SSE. In addition, it is understood that the findings uncovered, in light of the literature concerning the production of indicators, contribute to the elaboration of a set of indicators that can highlight relations between SSE and SDGs in this territory, and can be applied in further studies.

The case study to be presented deals with a group of activities related to the SSE and performed as a means of generating work and income located in the municipality of Araraquara (SP), Brazil. This is a specific solidarity economy enterprise (SEE), founded in 2008 by the Monte Alegre Female Settlement Association (AMA) by a group of women from this land reform settlement, located in the rural area of the municipality. The association was set up with the purpose of creating a place to produce certain goods, as a work and income generating activity for the families of women living in an area of high socioeconomic vulnerability.

LEANDRO PEREIRA MORAIS, MIGUEL JUAN BACIC 3 72

The Association, through “Padoka” ‒ a community bakery set up by this Association ‒ provides food and products of nutritional value, mainly using raw materials of natural origin and without preservatives.

Another form of work and income generation in the settlement is the production of fresh agricultural produce. All experiments target the shortening of production and consumption chains, as well as the close collaboration between small farmers in the region, who supply raw materials such as flour, cassava, honey, etc. In general, the products are marketed in the settlement, in the municipality, at street markets and rural and urban markets, even offering public and private events in the surrounding area.

Recent studies point to the fact that, in addition to the generation of work and income, these experiences have transformed the lives of women living in this area (many of whom are heads of the family), as they now participate in decision-making processes in force in the community, as well as in the municipal participatory budgeting1. This conclusion indicates an improvement in the living conditions of these women in this territory; in the economic, social and political spheres, since obtaining work and income generation, in addition to economic resources, the emancipation of these women and their participation (“voice”) in the construction of local public policy.

This experience relates to several SDGs, such as numbers 1 and 2 (No Poverty and Zero Hunger); 5 (Gender Equality); 11 (Sustainable Cities and Communities); 12 (Responsible Consumption and Production), etc. Particularly in the case of SDG 1 and 2, the settlers, previously living in conditions of extreme poverty, currently earn a higher income than the national minimum wage (SDG 1), with family income in some cases reaching 2 to 3 monthly minimum wages. In addition, regarding a food production experience, the results also relate to SDG 2, as it ensures food security in the locality.

Methodologically, the study is based on a descriptive analysis of the experience and the mapping of its “ecosystem”, which will encompass and constitute the structure of the article, starting with a brief discussion about the relationship between SSE and SDG. This is followed by a presentation of the entrepreneurial ecosystem for the municipality of Araraquara, and a discussion on the case of the settlement, based on its community bakery (Padoka), identifying advances and challenges for strengthening the experience. In addition, the article will carry out a literature review on the process of building indicators, in order to design indicators that can quantify elements of the SDG and that can be applied to subsequent studies.

Basically, the methodological processes of this work consist of a bibliographic review and technical visits and interviews to the location under analysis. It is worth

1 Participatory Budgeting refers to the participation of the organized population in the decision-making processes of finance and public policy. This is a kind of “democratic radicalization”, where democracy “is seen not only as a means to achieve better resource allocation, but also as an end in itself” (Pires 1999, 43). (Our translation).


noting that this work is fundamentally part of an action-intervention project (university extension program) carried out by the Center of Extension and Research in Solidarity, Creative and Citizenship Economics (NEPESC) at The State University of São Paulo (in Portuguese: Universidade Estadual Paulista ‒ UNESP ‒ Araraquara), from 2019 to 2020.

SOCIAL AND SOLIDARITY ECONOMY AND SUSTAINABILITY DEVELOPMENT GOALS: A RELEVANT AND NECESSARY RELATIONSHIP

In Brazil and in many other countries, the SSE has been, in recent years, an innovative alternative for job and income generation and a solution for social and labor inclusion. For many, it can also be considered as a new, more humane and inclusive development model (Morais, Dash and Bacic 2017).

The SSE comprises a variety of economic and social practices, which perform activities of production of goods, provision of services, solidarity finance, trade, fair trade and solidary consumption (Morais 2014). The SSE is characterized by a lack of consensus regarding its conceptualization and quantification. A study by the Inter-Agency Task Force on Social and Solidarity Economy (2018), which is an SSE task force within the United Nations, maps different terminologies used in official (government) documents and publications on all continents. This mapping confirms that tbe large number of terminologies is due to the different modes of generation, achievements and behavior that this sector manifests in different countries.

Despite the various terminologies that exist, SSE can be defined as “a concept that refers to companies and organizations, in particular cooperatives, mutual benefit societies, associations, foundations and social enterprises, which specifically produce goods, services and knowledge, while pursuing economic and social goals and promoting solidarity” (Borzaga, Salvatori and Bodini 2017, 36). Álvarez (2018, 6) synthesizes the SSE as a set of socioeconomic practices that “combine cooperative entrepreneurship with the association of people trying to fulfill needs”.

In addition, we observe that SSE organizations offer comparative advantages in addressing social, economic and political challenges around the world, including social cohesion, empowerment and recognition of a plural economy. First, they are often created from the ground up, emerging within local communities. Second, volunteers play an active participatory role, often taking part in setting up and starting cooperatives. Third, their activities generate surpluses, which are distributed to their owners.

Consequently, the governance structure also tends to be more inclusive and democratic, providing different types of partners (workers, members, volunteers, users, etc.) with a voice within the collective decision-making process, enabling community empowerment and supply and demand for local services.

Such characteristics led the United Nations to recognize the SSE as one of the auxiliary paths that can contribute to the construction of more inclusive and


sustainable development “models”, currently expressed by the SDGs (United Nations 2010, 2014). Thus, the SDGs are integrated and merge the three dimensions of sustainable territorial development: economic, social and environmental. It should be kept in mind that the SDGs comprise an ambitious set of seventeen objectives and 169 goals, defined and developed through broad dialogue among United Nations Member States, local authorities, civil society, the private sector and other stakeholders2.

According to Utting (2018), the SDG methodology per se can mask sub-national level deficit outcomes, as well as risk diverting attention and policy resources from marginalized groups. The concept of SSE necessarily meets the SDG’s objective of “leaving no one behind”, by redirecting attention to local territories and vulnerable groups and thus emphasizing active citizenship and participatory democracy, which are essential to meeting the demands of marginalized groups. This stems from the fact that SSE acts directly with people and within their territories, ensuring a bottom-up approach that is closely linked to the real demands of communities.

Also, according to the author, several reports identified links between the SSE and specific objectives and called on governments and multilateral organizations to include SSE in their discussions and planning related to the implementation of the SDGs. Utting (2018) listed four SDG thematic areas: food security/sustainable agriculture, access to social services, women’s economic empowerment, and employment/ decent work.

Another study that discusses the relationship between SSE and the SDGs is the research on Seoul, carried out by UNRISD (2018). According to this research, the implementation of the SDGs at the local level, through mechanisms of democratic governance and local planning and execution, is crucial.

However, we still need to develop well-defined methodologies to quantify the socio-territorial impacts of the experiences of social or cooperative enterprises in their respective territories. The complexity of the phenomenon ‒ not only given the economic impacts, but also social, political, cultural and environmental ‒ also requires the combination of quantitative and qualitative methodologies. This is an important topic on the SSE research agenda. According to UNRISD (2018), although the positive impacts of the SSE in their respective territories are evident, we still experience the “underdevelopment of methodologies to collect and analyze data on the impacts of SSE” (p. 17).

From the quantitative point of view, there were advances, shown through two studies: International Labor Organization (2017) and Monzon and Chaves (2017). The first presented an overview of how the key variables of SSE are measured. However, they only present the traditional measurements of employment and productivity. On the other hand, the second study analyzed 28 European countries

2 These documents can be found at: http://www.unrisd.org/80256B3C005BB128/(httpProjects)/ 51FF4ADFC37CEE3DC125829500498071?OpenDocument.


and represented a leap forward regarding the quantitative information on SSE, up to the year 2015. However, both recognize the fact that this task is still at an embryonic stage and presents a challenge for our times.

It is also important to mention the efforts made at the International Conference on Labor Statistics (CIET), held in October 2018, in Geneva (ILO headquarters)3, where methodologies that will assist in this major challenge of quantification were discussed and advanced.

From a qualitative point of view, it is worth mentioning the work of Castro and Oreamuno (2017) that suggests a different approach to understanding the impacts of the SSE in their respective territories, beyond the traditional quantifications of the generation of income and jobs. According to the authors, this is due to the fact that “instead of producing specific impacts, cooperatives develop a range of social roles within their communities, which means they influence the dimensions of development more dynamically” (p. 148).

In other words, complex social phenomena require “holistic” measures and metrics of understanding that, in this case, were created from four analytical categories inspired by the United Nations Human Development Report, namely: health, education, income and public goods and services ‒ collective capacities.

Álvarez and Alárcon (2019) try to relate the theory of cooperative principles and the economic theory of social transfers as conceptual support to generate a concrete tool for scaling the contributions of the SSE to the implementation of the SDGs.

The major challenge will be to merge quantitative and qualitative methodologies to construct a metric that is effectively able to measure the complexity of the impacts of SSE experiences in their respective territories (Morais and Bacic 2018). In dealing with this problem, the next topic presents the experience in Araraquara (state of São Paulo), which can be used as a case study to create ways to record and measure the inextricable relationship between the SSE and the SDGs.

THE ENTREPRENEURIAL ECOSYSTEM FOR THE SSE IN THE MUNICIPALITY OF ARARAQUARA (STATE OF SÃO PAULO)

The entreupreneurial ecosystemic construct for the SSE One of the major challenges of creating, maintaining and strengthening SEEs

is the effective establishment of an entrepreneurial ecosystem for the SSE. According to Spilling (1996), an entrepreneurial ecosystem is a community within a region of interdependent actors, with diverse interacting roles, determining the ecosystem’s performance and ultimately the entire economy of a region.

We understand that the formation of the entrepreneurial ecosystem for the SSE is a fundamental step towards the emancipation of the SSE. One of the major

3 https://www.ilo.org/global/about-the-ilo/newsroom/news/WCMS_646530/lang--en/index.htm.


problems of SEEs is that the prerequisites for the construction of the “emancipatory space” or the “space of autonomy” are skills and resources that are not available to most people that participate in self-management groups. For this reason, it is not possible to simply copy and reproduce the institutions that operate within the entrepreneurial ecosystem ‒ including traditional companies ‒ when we think about the articulation of a set of institutions and actors that are expected to act on behalf of the SSE. These enterprises should have characteristics wich lead to socio-economic, political and cultural implications in their territories, different from those that can be found in traditional companies (Morais and Bacic 2019).

Thus, it is clear that the construction of the entrepreneurial ecosystem is a complex task, marked by many challenges, resulting from the the fact that the concept is recognized as something systemic and dynamic. When it comes specifically to the entrepreneurial ecosystem for SSE, such complexity and challenges intensify, given the very inherent structural weaknesses that characterize the SSE, as well as the field of institutionalization of its policies, which is still open to change and development.

In general, as Serrano systematized (2015, 173), ecosystems are “networks of actors” (entrepreneurs, researchers, funders, politicians ‒ executives and legislators, etc.) that take into account the physical-territorial and cultural dimensions of the territory concerned. This territory is marked by a set of systems, such as: a) political systems (alliances and coalitions among the social actors and the political actors that form the basis for territorial governance); b) production systems (which induce the creation of networks of actors involved in the production of goods and services) and c) territorial innovation systems (created by some groups of actors involved in the generation and diffusion of innovation). Such systems make up a “physical component” with sociological, political and economic consequences. The author also finds that the ecosystem construct must take into account the need to promote “self-reflection”, that is, to be able to carry out an “endogamous” analyze, through research, the creation of statistics and analysis of impacts as well as the need to open and strengthen ties with social movements.

Another important aspect for the construction and maintenance of the solidarity entrepreneurial ecosystem consists of “community participation” processes (Bajo 2017). According to the author, the success of the emergence and maintenance of SSE in its respective territories (in the specific case of this study, the cooperatives), depends on community participation. This participation leads the community to adopt a protagonist role in the process of constructing their own citizenship, their inclusion in the process of co-construction of rules and practices, i.e., as fundamental participatory actors in the co-construction of territorial public policies.

Drawing on some other studies on the SSE ecosystem, we understand that a coherent proposal for a structure for the SSE-driven entrepreneurial ecosystem includes: a) knowledge, political awareness and legal ways of recognizing policies and actions; b) access to the market; c) public and fiscal support for start-ups; d) access


to finance; e) tools to promote mutual support networks; f) research development and capacity building in the area (European Commission 2016; Kim and Jung 2016; Morais and Bacic 2019).

Based on this structure, it is worth presenting how this ecosystem has been co-built in the city of Araraquara.

Entrepreneurial ecosystem for SSE in Araraquara (state of São Paulo) According to data from the State Data Analysis System Foundation (Seade),

the Brazilian municipality of Araraquara, located in the central administrative region of the state of São Paulo with an area of 1,003.63 km², has a population of 222,791 (2017), Gross Domestic Product (GDP) of R $ 7.98 billion (2014), a per capita income of R $ 36.7 thousand (2014) and a share of GDP of 0.43% (2014).

Considering its productive diversification, agro-industry stands out in the region, and is the main anchor of Araraquara’s economy. The clothing, textile and metal and mechanical industry sectors are also very important. The sectors related to the agroindustrial activities of citrus processing, sugar and alcohol, prevail and determine the regional dynamics. In the metalworking industry, there are many industries linked to the agroindustrial segment, but the recent presence of the aeronautical segment also stands out with the implementation, at the beginning of the century, of a unit of Embraer, an important Brazilian company. In metallurgy, the power generation sector has also been important since the 1970s. Additionally, it is worth mentioning that the city of Araraquara is an important center for trade and services for the entire region, including universities and research centers.

Specifically regarding the SSE in the municipality, according to Fonseca et al. (2014), the idea was first introduced in 2004, when the Center for Sciences and Languages of UNESP created the Center for Studies in Solidarity Economy and Citizenship ‒ NEESC. In 2005, the City Hall created the Solidarity Economy Coordination, linked to the Secretariat of Economic Development. At the end of 2007, with the publication of a project call notice in the context of the National Program of Popular Cooperative Incubators ‒ PRONINC (federal government program), an incubator of social and solidarity economy enterprises was created on UNESP’s campus in Araraquara, in partnership with a group of professors and students from the Franca campus of the same University.

As Fonseca and Grigoletto (2012) remind us, the approval of the project, at the end of 2008, was the motivating factor for the start of the Incubator’s activities, although the material conditions were only created in 2011. Among the activities, emphasis should be given to the Araraquara Solidarity Economy Forum, which took place in 2008, in which the groups exchanged experiences. The main result of the Forum, however, was the elaboration and approval of the Charter of Principles of Solidarity Economy of Araraquara. Another important achievement during this period was the approval of the Municipal Solidarity Economy Law, in late 2009.


This Law represented a guarantee that SSE actions would be maintained, despite the subsequent government changes.

Map of the State of São Paulo, Brazil

Source: Google Maps.

The year 2017 was a milestone for the SSE movement in Araraquara. The

main objectives were given by the new municipal administration, which took office in January.

The following initiatives and actions should be highlighted as signaling measures:

a. strengthening and promotion of the Municipal Coordination of Solidarity Economy, including their transformation into Coordenadoria Executiva de Trabalho, Economia Criativa e Solidária (Executive Coordination of Work, Creative and Solidarity Economy);

b. holding of the 1st Municipal Conference on Creative and Solidarity Economy of Araraquara / state of São Paulo, with the theme “Local Economic Development with Decent Work: Income Generation and Social Inclusion”, organized collectively by the government and civil society, where proposals that supported the elaboration of the 2018‒2021 Multiannual Plan and the Municipal Plan for Solidarity Economy were debated and deliberated;


c. as a result of the Conference, the Municipal System of Creative and Solidary Economy was created; and

d. inclusion, in the municipality’s Annual Budget Law for 2018, of approximately R$ 986 thousand, intended for investments and current expenses applicable to the Creative and Solidary Economy.

In addition, we should mention that the current Mayor is also Vice-President of the National Front of Mayors in Solidarity Economy4, which in turn is in close contact with the Network of Public Administrators. Both organizations contribute with the creation of spaces for debate and the proposition of adequate means to foster the development of the solidary economy and to stimulate partnerships among the municipalities and the state and federal governments.

Therefore, we observe that the SSE is strategic, and a fairer, more equitable form of income generation, organization, production and social relationship, in the human, social, cultural, political and economic dimensions. Thus, the SSE is an important instrument to implement the SDGs in the territory and, consequently, to improve the living conditions of the population, in paricular the most disadvantaged.

In addition, it is important to observe that Araraquara’s public administration, which began in 2017, has established among its goals, the building of a “participatory and solidary city”, seeking to implement a government program divided into four main axes: “Democratic management and popular participation”. “Transparency and social control”. “development and sustainability”. “Quality of life and the realization of social rights”. Major decisions are made through the participatory budget and the Municipal Councils (such as those regarding the elderly, youth, women, racial equality, people with disabilities and the LGBT population etc.). These instruments guarantee a broad debating process, with the participation of the population, which deliberates the investment plan for the following year’s budget, adopting a practice of transparency in management and full public control. All programmatic elaboration seeks to remain in line with the SDGs, from the axes that guide public policies, through the proposal of democratic management and social control (Silva 2017). In this sense, the current management of the city is guided by the need to strengthen the SSE, conceiving it as an organizational instrument of the local and regional economy, as well as being responsible for structuring the adoption of new values within local community relationships.

SSE Municipal Conference in Araraquara (state of São Paulo): a fundamental instrument of an ecosystem for the SSE

We understand that State as well as governmental policies5 are of fundamental importance for the maintenance and sustainability of an ecosystem, as they may

4 https://www.facebook.com/FrenteNacionaldePrefeitos/. 5 “State” policies are institutionalized and, regardless of government changes (every 4 years in

Brazil’s case), they do not change or come to an end, as is usually the case with “government” policies.


come to an end or lose support and power when governments change. This may occur at federal, state or municipal levels. In this sense, when it comes to the municipal sphere, it is believed that the institutionalization of public policy for a particular sector (in this case, the SSE) is a relevant way to expand the capacity of the existence and maintenance of the SSE in their respective territories.

This topic will address certain issues discussed at the SSE Municipal Conference, understood as of great relevance for the institutionalization of public policy for the SSE and the strengthening of the SSE ecosystem in Araraquara. In the case of the SSE Municipal Conference in Araraquara, among the main themes and demands that emerged in a participatory and consultative manner to its members were: a) To map formal and informal enterprises; b) Create and regulate the Law and the Municipal Council for Creative and Solidarity Economy; c) Create and regulate the Municipal Fund for Creative and Solidarity Economy, as a permanent source of funding for the financing of incentive and credit projects and programs; d) Create a Public Center for the Creative and Solidarity Economy, a physical space focused on the development of public policies to support, foster, develop and commercialize, and train public policy managers and integrate these policies; e) Implement the SSE municipal public incubator; f) Create SSE product certification instruments; g) Implement incentive policies for the creation and consolidation of urban and rural enterprises, linked to organic and agroecological production.

One of the main outcomes of the Conference was the sanction in November 2017 of Bill no. 317‒17, establishing the Municipal Plan for a Creative and Solidarity Economy. This Plan consists of 19 guidelines for the period 2018‒2021.

As a complementary part of the ecosystem, it is worth mentioning the founding of the previously mentioned NEPESC – UNESP in 2017, on its Araraquara Campus, in the state of São Paulo; a group formed by professors and undergraduate and graduate students, who work with research in the area of SSE and the Creative Economy, as well as in various interventions with SEEs and the local government. Among the activities presently conducted by the group, is the continual elaboration of mapping the municipality’s SEEs and their current state of operation.

Through visits that had already been carried out in the research, we will analyze the Monte Alegre Settlement, where an important section of the territory’s SSE is located, combining the production of small settled producers and their purchase and sale connections through the Padoka community bakery, which will be discussed below.

THE EXPERIENCE OF SETTLEMENTS IN ARARAQUARA (SÃO PAULO STATE)

The history of the Monte Alegre Settlement dates back to the extensive conflicts in the rural area. These conflicts took place up to the time when 38 rural settlements in the state of São Paulo, including the Monte Alegre Settlement covering 1,300 hectares,


were regulated between 1984‒1992. The settlement is located in the midst of a territory where modernized agriculture predominates, with a strong presence of the sugar-alcohol complex and citrus agro-industrial complex. Therefore, it is necessary to act to strengthen productive diversification, according to new production and consumption patterns (Morais and Borges 2010). From this perspective, in relation to polycultures, annual crops such as corn, cassava, beans, and perennial crops, especially orange, lemon, mango, guava and coffee, which highlights the great diversity. Olericulture is also significant, with the planting of various vegetables, leaves, roots and fruits, as well as dairy cattle raising, sheep farming, poultry and laying poultry, as well as small family agribusinesses for the production of cassava flour, cassava starch, panela, brown sugar, sweets, breads, jams, honey and cheese.

This production is largely directed to families’ self-supply; the surplus is exchanged between residents and sold at street fairs, public and private events, as well as in Padoka itself, which has become well-known among settlers as well as locals and tourists from the region.

Settlement photos ‒ path and production

Source: author’s photos (2018).

An important destination for this production came via the creation of

“Padoka”, by the Monte Alegre Female Settlement Association. The objective of Padoka was to offer products of quality and nutritional value, using mainly raw materials of local and natural origin. At Padoka, the relationship between buying and selling, whether of raw materials (between settlers and the Association), as well as of finished products (between Padoka and the community) is based on the idea of shortening production and consumption chains, which enables partial elimination of the “middleman”, guaranteeing a close collaborative relationship with the small farmers from the settlement, as well as better cost conditions and greater internal circulation of income within the settlement.

Currently, Padoka relies on the effective participation of the work of four women from the settlement, and in periods of high demand (weekends and holidays), 8 more


women get together to carry out the work (production and sales). Each woman represents a family in the settlement and largely makes up the majority of the income of these families. In addition to the economic gain, it is worth noting the social, political and cultural gains for these women. Padoka is represented on the Municipal Solidarity Economy Council and, therefore, has an active voice in the elaboration and implementation of local public policies. Another important aspect is the process of “family emancipation” gained over time. Additionally, Padoka is registered as an important instrument to boost domestic income in the area, as many settlers sell their respective products to the bakery (as inputs) and then buy Padoka’s final products. Padoka is strengthening as a rural tourism area in the region and is already a route for cyclists who come from many other areas every weekend.

This experience of a community bakery, which is a kind of social innovation, has the potential to be replicated in other areas of the city, as an instrument for generating work and income, as well as greater social participation inolving the most marginalized people and groups in society.

In search of a quanti ‒ quali valuation The construction of indicators The evaluation and quantification of SSE projects and experiences, as well as

their impacts on their respective territories, presents a major challenge in the 21st century. Generally speaking, there is still a lack of well-defined methodologies to quantify the socio-territorial impacts of SEE experiences. The complexity of the phenomenon ‒ given its economic, social, political, cultural and environmental impacts ‒ also requires merging quantitative and qualitative methodologies. This is an important topic in the research and extension agenda.

Based on this conclusion and in order to contribute to this challenge, we suggest starting such a venture by discussing the development of indicators, as these are the tools that will enable the conception of the “metric” of the entire process. The specialized literature on the subject presents extensive information that guides and describes the technical and operational development of indicators.

Some approaches and definitions of indicators were systematized by Kayano, Simião and Kruger (2003); the main concepts are as follows: “A set of variables that measures quantitative and qualitative characteristics, considered significant in the development of a plan, definition of its context and results”; “A variable whose purpose is to measure transformation into a phenomenon or process”; “Signs or evidence that allow us to verify to what extent the observed phenomenon is undergoing variations through the intervention performed”; “A measurement instrument used to indicate changes in the social reality that interests us”; “A ruler or a standard that helps us measure, evaluate or demonstrate variations in some dimension of reality relevant to the objectives of a given project”; “Objective and measurable parameters used to operationalize concepts”; “Qualified and / or quantified parameters that


serve to detail the extent to which project objectives have been achieved within a defined time frame and in a specific location”; “A signal which aims to express some aspect of reality in a way that we can observe or measure it” and “Measures that are used to answer (evaluation) questions”.

In general, when people and institutions invest time and resources in communities, they inevitably want to know what difference this investment is making and how it could be more effective. The root of the word “evaluate” is to determine value, and evaluation is an important tool for institutions and communities, including understanding, supporting and engaging with local development (Neumann 2004).

In summary, certain key terms or ideas involving the indicators can be extracted, as well as their importance as assessment and monitoring tools.

Table no. 1

Indicators: key ideas and applications

‒ marks, signs, ruler, evidence; ‒ measures, measurement, parameter; ‒ observe, demonstrate, evaluate; ‒ change, transformation, variation; ‒ reality, phenomenon, process, path; ‒ objective, destination, goals.

Source: Own elaboration based on Kayano, Simião and Kruger (2003). Based on this view, indicators are instruments for controlling the administration,

verification and measurement of the efficiency and effectiveness of both private and public administration and third sector and SSE institutions and entities, as they make it possible to compare situations among localities (territorial spaces) or different periods of time in the same municipality.

According to Kayano and Caldas (2002, 294): “Indicators are the description by numbers of a particular aspect of reality, or numbers that are related through several aspects”.

Dewar, quoted by Neumann (2004, 114), suggests that there are two very different approaches to evaluating socioeconomic projects in communities: the “scientific” (scientific models and methods that intend to prove cause-and-effect relationships and yield final judgments about programs and actions) and the “appropriate” (seeks to describe and learn about what is being done, aiming to inform and support those leading the work). Such a division of approaches refers to the fact that, in the context of a community, it is very difficult to establish cause and effect relationships between an activity and the desired impacts, since a number of variables that influence local transformations are at stake.

We must therefore think of an indicator not as something that ‘measures’ reality, but rather that participates in the social construction of reality. To this end, the adoption of the systemic view of indicators is suggested. An indicator system


can be an important advisor and monitoring tool to enhance social practices on a daily basis and over time. However, discerning the composition and outline of an indicator system, implementing and refining it progressively, and operationalizing it over time and drawing from it in order to move forward, changing behaviors or reordering strategies does not always constitute a simple task.

In this sense, knowledge of a series of indicators can guide its construction. There are a variety of indicator systems, such as those to monitor insertion within civil society (monitoring some socio-economic indicators and/or suggesting institutionalization of other indicators); monitor the effectiveness of the intervention via impact indicators; measure efficiency through performance indicators that relate resources and results; identify and evaluate the intensity of participation, through self-evaluation indicators, among others.

From this perspective, no particular standards were identified regarding the construction of a system of indicators for project evaluation and monitoring in territories and communities. Given the heterogeneity (themes, functions, objectives, regional characteristics, etc.), we suggest the designation of methodological parameters for the construction and implementation of the indicator system.

Some of the parameters that we must take into account are: a) political dimension of the indicators: in light of their objective of monitoring

and evaluating advances in democratic and citizenship practices; b) different levels of indicators: which result from the different social practices

involved and intended, in an attempt to capture the macro and microsocial dimensions of action;

c) different functions of the indicators: from those intended to evaluate the degree of participation of the actors in their social practices, to those connected to their management and dialogue practices among different social subjects with different interests;

d) specificity and multiplicity of indicators: among the possible indicators, each institution/ project will seek to have a set of indicators that responds more closely to its specific needs. There are no general patterns.

As observed by Kayano and Caldas (2002), one of the fundamental characteristics of the indicators is that they establish a normative standard from which to evaluate the social state of the reality in which we want to intervene, constructing a diagnosis that feeds the process of definition of strategies and priorities. In other words, the performance of policies and programs is evaluated by measuring the degree to which their objectives have been achieved (effectiveness), the level of resource utilization (efficiency) or changes in the social status of the target population (impact).

This means that indicators should not be used and understood in themselves, but rather as tools within a larger system that will enable us to verify whether or not changes have taken place, as a result of the interventions performed. The indicator system, therefore, must be: changeable, flexible, dynamic, renewable and resignifiable within the context. This, therefore, lies in the fact that, since the indicators respond


to the conjunctures of the organization/ society, as well as to the different dialogues intended, they are dynamic and change with each new stage of the work. Flexibility is also due to the necessary changes during the process. For example, when the indicator cannot provide an answer to the questions posed during its elaboration. On the other hand, when the indicator system shows that the objectives are not being met, it may be an indication that the action needs to be reevaluated and reformulated.

In some cases, especially in the case of socioeconomic projects, Kayano, Simião and Kruger (2003) advocate the view that the focus should be more on process analysis and less on products, enabling an overall reading. In addition, the micro-macro dimension should contemplate a constant dialogue with other indicator systems.

Having made these initial considerations, the central problems that must be carefully addressed when developing the indicators are given as: a) clarity of what is to be measured; b) quality and precision in the production of the information that will compose the indicators; c) caution and care in the interpretation of available information and d) appropriation and understanding of the indicators by society. Thus, the following are important characteristics of an indicator:

Table no. 2

Important characteristics of an indicator

‒ simplicity ‒ ease of understanding; ‒ validity/ stability ‒ relationship between concept and measure; ‒ selectivity/ sensitivity/ specificity ‒ express essential characteristics and expected changes; ‒ coverage ‒ breadth and diversity; ‒ independent ‒ not conditioned by exogenous factors; ‒ reliability ‒ data quality (collection, systematization and standardization); ‒ low cost/ easy to obtain/ periodicity/ disaggregation; ‒ data production, maintenance and viability.

Source: Own elaboration based on Kayano & Caldas (2002). Concerning the practical aspects of the construction of an indicator, Table no. 3

below presents some considerations that should be taken into account. Complementary information on certain tools aids the construction of indicators.

Basically, we must consider quantitative and qualitative tools. Quantitative tools include: a) Formal sample consultations: a set of standardized questions directed at a

representative sample of the population, in order to ascertain specific facts; b) Random sample: scientific research tool, with the basic function of determining

which element of a reality under study (population or universe) should be studied, based on an inference on this population;

c) Interviews based on questionnaires: also known as “structured interviews”, since they are based on questionnaires and questions presented in the same order to each of the interviewees;


Regarding qualitative tools, we can use: d) Interviews with “key informants”: understanding “key informant” as

anyone who can provide detailed information, taking into account their experience and knowledge of the research topic;

e) Focal groups: collective research tool, developed in specific groups and focused on the plurality of attitudes and experiences, usually in a short period of time;

f) Direct observation: a technique that consists of the careful observation of a specific situation, based on notes and recordings of information for further analysis;

g) In-depth interviews: individual interviews to obtain desired information; h) Analysis of successful practices: verification of successful practices in a

given context, to study the lessons learned or to evaluate their possible applicability in other contexts.

When it comes to developing indicators to “measure” the contribution made by SSE experiences to the implementation of the SDGs, the complexity of the challenge must be acknowledged. According to Jannuzzi and Carlo (2018, 13), “adjusting the 2030 Agenda for sustainable development to national contexts is certainly one of the major challenges to be faced in the coming years.” The authors give that:

“The SDG Agenda favors, in the technical context, the reflection and production of new public statistics and the improvement of methodologies to make comparable the social indicators of different countries with different institutional regimes. This is a new effort to develop statistical systems, which is distinguished ‒ by methodological developments as well as political and institutional implications ‒ from the preceding processes of producing social and economic indicators” (Januzzi and Carlo 2018, 17).

However, according to these authors, experts on the subject, “the fact is that there is no way to produce social, economic and environmental indicators that respond to the 2030 Agenda without investments in human, technological and research resources” (Jannuzzi and Carlo 2018, 13). The Brazilian Institute of Geography and Statistics (IBGE) presents some proposals of indicators for each SDG (IBGE 2019) on its site.

On the one hand, based on these IBGE suggestions and, on the other hand, given the knowledge of the territory under analysis in this research, in addition to the mapping currently being carried out by NEPESC, we suggest some indicators that may be linked to the SDGs involved in these actions, namely: 1, 2, 5, 11 and 12. Given the scope of the study, emphasis should be given to the first two.

It is worth mentioning that, as this research and university extension project is still in progress, data on the actual experience are not yet available. Such indicator proposals according to different territories will compose subsequent parts of this work.

In the case of SDG 1, “by 2030, eradicating extreme poverty for all people everywhere, currently measured as people living on less than $ 1.25 a day”, findings show that producers working with Padoka, as well as its employees, currently earn


(since entering this venture) an income of around 2 minimum wages, therefore above the poverty line established in Agenda 2030.

We intend to analzye complementary indicators suggested by the IBGE to calculate the results of this SDG in the region, such as the proportion (%) of the population: i) below the poverty line by sex, age and working condition; ii) living at home with access to basic social services and iii) adults with guaranteed land tenure rights, legally recognized documentation and perceiving their land rights as safe.

In addition, the economic losses in relation to the total production of the enterprise and of the settlers’ production can be identified, as can the proportion of the production that is destined to public market guarantee programs such as the Food Acquisition Program (PAA) etc.

Regarding SDG 2, “Zero Hunger”, it is also observed that the experience under analysis contributes to this challenge, since part of the production in the settlements is exchanged among residents and part is sold. In addition, as mentioned previsoulsy, production techniques are based on agroecology, which enables sustainable agriculture without the use of pesticides and harnessing crops. All of these experiments were performed through the SSE and its guiding principles.

Conversations with settlement leaders indicate that after Padoka was set up, along with its surrounding production chain, production aimed at self-consumption and commercialization implied that the problem of hunger among the residents was dealt with, either by access to the food itself, or due to its sale and consequent generation of additional income. That is, we observe, albeit in qualitative terms, another interesting impact of SSE in this territory.

With the help of professionals from the University in this region, we also intend to find out whether there is (and in what proportion) a malnourished population in the region, with data on age; as well as information regarding the volume of production per unit of work; proportion of agricultural area under productive and sustainable agriculture; volume of agricultural subsidies for local production etc.

Allied to these quantitative indicators, it is considered pertinent to include qualitative valuations, considering the extent of the territorial socioeconomic impacts that involve these experiences. Such a challenge requires semi-structured interviews to detect, considering these SDGs, the community’s perception of food security and its benefits; women’s participation in political decision-making spaces; changes in the family relationship with women’s income, etc.

Other goals can be linked to this experience, such as goal 5 (Gender Equality), 11 (Sustainable Cities and Communities) and 12 (Responsible Consumption and Production), in view of the broad participation of women in the community in economic, social and political terms, as well as the productive system used and its “green” and community-oriented techniques that seek to integrate agroecological production and organic food.

Accordingly, for subsequent studies, we intend to identify from the standpoint of SDG 5: i) the proportion of women and girls who suffered physical, sexual or psychological violence; ii) whether or not there is a legal framework in


place to promote, reinforce and monitor gender equality and non-discrimination; iii) the proportion of time spent on unpaid domestic work and care by gender; iv) the proportion of women in managerial positions.

Additionally, regarding SDG 11, information can be obtained on: i) the proportion of the population that has access to public transportation; ii) the proportion of the settled population with direct participation in local urban planning and management; iii) the existence of local risk reduction strategies and sustainable building practices.

In relation to SDG 12, it is possible to map: i) the rate in the deacrese of food production and consumption and ii) the use and destination of solid waste, as well as progress in the elaboration of sustainable action plans.

The chart below was elaborated in order to: i) systematize a proposal of basic indicators for the treatment of territorial actions and experiences aligned with SDGs 1, 2, 5, 11 and 12, including possible application in other territories and ii) conceive a starting point (“T0”) to move forward in the creation of monitoring impact metrics for experiments and their actions in territories:

Table no. 3

Proposal of basic indicators ‒ SDGs 1, 2, 5, 11, 126

SDG Suggested Indicators

1

% Population: i) below the poverty line ($ 1.25 a day) by gender, age and working condition; ii) living at home with access to basic social services; iii) with guaranteed tenure rights % of production for public market guarantee programs like PAA

2

% of population malnourished by age and gender Information on production volume per unit of work % of agricultural area under productive and sustainable agriculture; Volume of agricultural subsidies for local production

5

% of women and girls who suffered physical, sexual or psychological violence Whether or not there is a legal framework guaranteeing non-discrimination by sex % of time spent on unpaid housework and care, by gender % of women in managerial positions

11 % of population that has access to public transportation % of settled population with direct participation in local urban planning and management Existence of local risk reduction strategies and sustainable building practices.

12 Rate of decrease in food production and consumption Use and destination of solid waste Elaboration of sustainable action plans

Source: Author’s elaboration adapted from IBGE ‒ ODS (2019).

6 It is important to clarify that these proposed indicators were initially inspired by the Brazilian

Institute of Geography and Statistics (IBGE), as indicators arising from a wide discussion with a team formed to create metrics for the SDGs at national, regional, provincial and or municipal levels in Brazil. From these suggestions, these indicators were adapted to meet the reality of the territory and the experience studied.


FINAL CONSIDERATIONS

As we intended to show, there is a positive relationship between local SSE experiences and effective possibilities to fulfill particular SDGs, as these reported experiences are rooted in the local economy and seek inclusive and sustainable development.

However, it is important to mention the challenges involved in addressing Padoka’s existing structural weaknesses as well as those related to the producers involved. As in most SEEs, the producers face economic difficulties that imply problems of financial sustainability of enterprises. According to a survey conducted by DIEESE (2017), concerning the process of commercialization of the SEEs in Brazil, the main difficulties reported were: lack of working capital; inadequate marketing structure (physical space, equipment, etc.); competition and existence of middlemen and monopolies; high cost of transportation; difficulties in maintaining regular supply; inadequate prices; difficulty finding customers on a large enough scale; precarious roads; lengthy deadlines for customer payments and a lack of formal registration for commercialization (preventing issuing invoices).

Considering these challenges, the idea of the ecosystem is justified by the creation, maintenance and strengthening of an integrated set of actors (university, public and private sectors, trade unions, etc.) in favor of the SSE, in order to cope with (and or minimize) the real problems found in the SSE modus operandi. In addition, with greater economic and financial sustainability, their political participation in governmental and civil society decision-making is also strengthened.

Another challenge lies in the possibility and ability to quantify and qualify such “phenomena” and developments in their respective territories. In other words, as we have seen, the evaluation and quantification of SSE projects and experiences, as well as their impacts on their respective territories, is a major challenge that must be dealt with in the 21st century. In general, at present, well-defined methodologies still need to quantify and qualify the social-territorial impacts of SSE experiences. The complexity of the phenomenon ‒ given its economic, social, political, cultural and environmental impacts ‒ also requires merging quantitative and qualitative methodologies. Based on this conclusion and in order to contribute to this challenge, this article presented some considerations about the construction of indicators consistent with the SSE area, as well how they relate to the SDGs.

Additionally, regarding the functionality of the indicators, the NEPESC is at present evaluating Padoka, through technical visits, survey demands, as well as technical (economic, administrative, logistic and nutritional) advice. In the context of this advice, we intend to proceed with the application of the indicators proposed in the section above (The construction of indicators), in an attempt to “quantify” certain aspects involving the relationship between the SSE and the SDGs mentioned. It is understood that this may only be an initial step in facing this complex challenge, which, combined with other qualitative practices (such as questionnaires


and observation of experiences in the territory), can result in quantitative and qualitative and impact assessment metrics of the consequences of SSE actions in the location studied, in compliance with the proposed SDGs.

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n Brazilia ca și în multe alte țări, economia socială și solidară (ESS) a reprezentat o alternativă inovativă pentru locuri de muncă și crearea de venituri și o soluție pentru a rezolva

incluziunea socială și pe piaţa muncii, în ultimele două decade. Poate fi, de asemenea, considerată un model de dezvoltare nou, mai uman și mai incluziv. Acest fapt contribuie la imbunătățirea calității vieții, atât pentru oameni și comunitățile lor, dar în special pentru cei dezavantajați social și economic. Această concluzie a determinat Organizația Națiunilor Unite să recunoască ESS ca una dintre contribuțiile auxiliare pentru îndeplinirea obiectivelor de dezvoltare sustenabilă (ODS). Acest lucru deoarece ODS integrează și unește cele trei dimensiuni ale dezvoltării teritoriale sustenabile: economică, socială și de mediu. Cu toate acestea, în prezent avem nevoie de studii și metodologii relevante, atât cantitative și calitative, pentru a măsura contribuția reală a ESS la ODS. În acest sens, articolul are ca scop să folosească o experiență inovativă și concretă a ESS municipale desfășurate într-o zonă de înaltă vulnerabilitate socioeconomică [Așezarea Monte Alegro (unde funcționează) Reforma Teritoriului] în municipalitatea braziliană Araraquara (SP). Prin acest studiu, care încă se desfășoară, se intenționează propunerea unui set de indicatori pentru ODS 1, 2, 5, 11 și 12, care vor fi folosiți în viitor, dar și în cadrul altor experimente ce țin de economia socială și solidară.

Cuvinte-cheie: economie socială și solidară; așezări; dezvoltare teritorială; ecosistem; indicatori; Agenda 2030, Brazilia.

Primit: 12.11.2019 Acceptat: 20.02.2020

Î

AUTORII NUMĂRULUI 1/2020

Claudia PETRESCU Cercetător ştiinţific, gr. II, dr., ICCV, Academia Română, Bucureşti.

Mihaela LAMBRU Prof. dr., Facultatea de Sociologie şi Asistenţă Socială, Universitatea din Bucureşti.

Zdenko BABIĆ Faculty of Law, Zagreb University, Zagreb, Croatia.

Danijel BATURINA Faculty of Law, Zagreb University, Zagreb, Croatia.

Arturo Luque GONZÁLEZ Ph.D. Universidad Técnica de Manabí, Ave. José María Urbina y Che Guevara, Portoviejo, Manabí, Ecuador and Euro-Mediterranean Observatory on Public Policies and Democratic Quality, Universidad Rey Juan Carlos, Madrid, Spain.

Paul Renato Solís BENAVIDES Universidad Técnica de Manabí, Ave. José María Urbina y Che Guevara, Portoviejo, Manabí, Ecuador and Euro-Mediterranean Observatory on Public Policies and Democratic Quality, Universidad Rey Juan Carlos, Madrid, Spain.

Maria Bertha Aragadovay SISLEMA

Universidad Técnica de Manabí, Ave. José María Urbina y Che Guevara, Portoviejo, Manabí, Ecuador and Euro-Mediterranean Observatory on Public Policies and Democratic Quality, Universidad Rey Juan Carlos, Madrid, Spain.

Leandro Pereira MORAIS Phd in Economics, Professor and researcher at UNESP – Campus Araraquara, Brazil.

Miguel Juan BACIC PhD in Business Administration, Full professor. Institute of Economics, University of Campinas, Brazil.

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