Chapter 3 - Are there core cooperative principles required for cooperative economic success and sustainability?

Abstract

This chapter examines the hypothesis that core cooperative principles, as articulated in the International Cooperative Alliance (ICA) principles, represent necessary conditions for the efficient, effective, and sustainable operation and growth of a cooperative and, more generally, of cooperatives. Conventional economic theory would suggest that such principles would impede economic success and typically generate failure, unless the principled co-op is subsidized or otherwise protected from market forces. Another perspective would maintain that cooperative principles should be modified to take into consideration local cultural, religious, and ethnic considerations. Here, the core cooperative principles are modeled as they relate to economic viability. It is argued that these principles are necessary for cooperative success and provide cooperatives with a potential advantage on the market, apart from potentially generating higher levels of socio-economic wellbeing to cooperative members. Moreover, introducing significant modifications to cooperative principles based on cultural, religious, and ethnic considerations can negatively impact on cooperative success and linked socio-economic outcomes. Cultural, religious, and ethnic considerations can enhance cooperative success where they supplement core cooperative principles by adding to trust, solidarity, and social cohesion (and identity), for example. It is important to note that the current core ICA principles represent a modification of the “original” Rochdale principles. These revisions, however, are consistent with the spirit of the latter. And this consistency will also be addressed with regard to impacting the economic viability of co-ops and linked socio-economic outcomes.