Abstract
Contemporary literature dealing with the governance and exploitation of common-pool natural resources was initiated by Elinor Ostrom in 1990, and has been growing fast ever since. On the contrary, within the same research stream, the study of the presence and economic role of common resources in entrepreneurial organizations is, to date, under-researched. This work endeavors to fill some theoretical gaps in this research perspective by: (i) spelling out a new-institutionalist framework for the analysis of the accumulation and governance of common capital resources within organizational boundaries; (ii) considering co-operative enterprises as the organizational form that, on the basis of historical record, and of behavioral and institutional characteristics, demonstrated to be most compatible with a substantial role for common and non-divided asset-ownership and with its governance thereof; and (iii) evidencing and explaining the theoretical connection between cooperative longevity and the presence of non-divided asset ownership. The economic forces influencing the optimal level of self-financed common capital resources in co-operatives are enquired. Conclusions to the paper evidence the main reasons why the new approach can better explain than preceding ones the economic sustainability and longevity of cooperative enterprises.
Highlights
Following the growing evidence on the necessity to accomplish environmentally sustainable economic development, the study of the governance and exploitation of natural resources gained prominent role in economics and the social sciences, ever since Elinor Ostrom’s seminal contribution in 1990 [1,2,3,4,5,6]
An effective solution can be found in the reinterpretation of the eight design principles for the governance of common-pool natural resources proposed by Elinor Orstrom [1] (the eight design principles are: (i) definition of clear group boundaries; (ii) MATCHING rules governing use of common goods to local needs and conditions; (iii) ensuring that those affected by the rules can participate in modifying the same rules; (iv) outside authorities respect the rule-making rights of community members; (v) developing a system for monitoring members’ behavior, by community members themselves; (vi) implementing graduated sanctions for rule violators; (vii) providing dispute resolution; and (viii) developing nested tiers governance from the lowest level units to the entire system)
The arguments of this paper showed that indivisibility of capital is likely to lead to better stability of the patrimony, since common capital resources cannot be shared by members and are to be considered ownership of the organization itself
Summary
Following the growing evidence on the necessity to accomplish environmentally sustainable economic development, the study of the governance and exploitation of natural resources gained prominent role in economics and the social sciences, ever since Elinor Ostrom’s seminal contribution in 1990 [1,2,3,4,5,6]. This paper concentrates on common or non-divided asset ownership as a common-pool resource It widens the existing literature, evidencing the analogies between business corporations and their patrimony with common goods, to study the features and economic functions of common property systems in the study of entrepreneurial ventures. The non-divisibility of capital is connected with the longevity and financial sustainability of cooperative enterprises As it shall be evidenced, incentive alignment and inter-temporal solidarity between different generations of members in cooperatives are understood as the main drivers of financial stability and sustainability in the medium- to long-term
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