Embracing Social Economy Plurality with Multiple Legal Frameworks - An Evaluation of the Belgian Case

Astrid Coates & Wim Van Opstal

Abstract

The social economy encompasses a heterogeneous reality and has exponents in almost any domain of economic activity. In the last decade, many countries across Europe developed innovative legal frameworks to capture the specific objectives of social economy enterprises (Dunn & Riley, 2004, Evers & Laville, 2004, Nyssens, 2006). After all, a sound legal and institutional structure is paramount for the successful development of the social economy. However, these innovations did focus on the objectives of the social economy, but did not always take into account the plurality of economic activities behind it. Furthermore, social economy enterprises adopted various legal frameworks prior to these innovations. To this extent, several questions can be raised: first of all, whether there was a successful transition of existing initiatives towards these newly designed legal frameworks. Secondly, whether these new legal forms have reached full maturity. A third question is whether there is an optimal match between this variety of legal frameworks and the plurality of economic activities in the social economy. If all this is not the case, legal frameworks may well impede rather than encourage the development of the social economy.

In this paper, we look at a situation where multiple legal frameworks for the social economy coexist, as is the case in Belgium. By means of a multi-disciplinary approach involving law and economics, we investigate the match between these legal frameworks and social economy plurality. In the case of Belgium, this choice set consists of associations, ‘social purpose companies’ (SPC) and (accredited) co-operatives. The paper will first present a short introduction on the Belgian legal environment for the social economy, putting the spotlight on legal aspects, incentives and institutional regulations, crucial for the relative success and use of these three legal forms. We thereby argue that the current institutional design is suboptimal, and therefore propose policy recommendations. Next, we assess legal form choice by social economy enterprises and evaluate the match between legal design and its implementation. Finally, we conclude with lessons that can be learned from the Belgian case relevant for other countries and contexts.

References:

Dunn, A. & Riley, C. (2004) Supporting the Not-for-Profit Sector: the Government’s Review of Charitable and Social Enterprise, Modern Law Review 67 (4): 632-657.

Evers, A. & Laville, J.-L. (eds.) (2004), The Third Sector in Europe, Edward Elgar, Cheltenham, 288p.

Nyssens, M. (ed.) (2006), Social Enterprise. At the Crossroads of Market, Public Policies, and Civil Society, Routledge, London and New York.

Authors:

Astrid Coates Researcher Institute for Social Economy (ISE) University of Antwerp Lange Nieuwstraat 55 Office S.LN5.5.004 B-2000 Antwerp astrid.coates@ua.ac.be

Wim Van Opstal Senior Research Associate Cera Centre for Co-operative Entrepreneurship HIVA – Catholic University of Leuven Parkstraat 47 B-3000 Leuven wim.vanopstal@hiva.kuleuven.be