The Comparison of the Institution of Precedent Social Enterprise Regulations and Its Implication for a Latecomer

Abstract

Purpose: The purpose of this article is to compare institutional arrangements between precedent social enterprises with a focus on the change of third sector organizations. Along with this, it is also to give an implication for a latecomer that insufficiently institutionalized social enterprise from the side of precedent countries of social enterprise. Method: The article reviews the policy documents and legal data of the governments and public organizations involving the UK, the US, and South Korea as well as China by applying Krasner’s model of punctuated equilibrium that gives attention to macro, meso, and micro institutions. Chapter 2 explores the paths and types of social enterprise. Chapter 3 discusses the economic environment and regime change, the legalization and legal entity, and the support system and support measure of social enterprise. Chapter 4 discusses the comparison of the in-fluence of multi-leveled institutions. Chapter 5 discusses an implication for a latecomer of social enterprise, China. Results: The article finds the influence of institution on social enterprise and an implication for a latecomer. First, the welfare liberal state with voluntary sector tradition forms the social enterprise as a separate legal entity as the state experiences an economic recession and low employment. Second, the welfare liberal state with non-profit sector tradition makes social enterprise a separable legal entity as the state undergoes economic recession and high employment. Third, the statism-centered state with an underdeveloped third sector forms social enterprise as an inseparable legal entity as the state goes through an economic recession and low employment. China as a latecomer puts together the cases of the precedent nations for its institution-building. Conclusion: This article concludes that the third sector development and character plays a critical role in form-ing social enterprise when state and market address external shock and internal conflict. Institutions tend to per-sist, but the social enterprise is formed as the existing third sector organization encounters an exogenous variable and is mediated by state and market.