Cooperatives: Pathways to Economic, Democratic and Social Development in the Global Economy

Cooperative Development Program

Cooperatives: Pathways to Economic, Democratic and Social Development in the Global Economy (PDF)

Throughout the developed world, cooperatives have been, and continue to be, a significant economic force. In many countries, co-ops are among the largest major enterprises in diverse fields of agricultural marketing, savings and credit, rural electricity, insurance, information/communications technologies and housing. In developing countries results have been mixed, particularly where cooperatives have operated in extremely challenging environments, been instruments of the state or have been unable to rapidly gain scale through interlocking co-op networks.

In some development circles, cooperatives have suffered from a negative legacy, the result of having operated in the face of obstacles such as tight control by repressive governments, inappropriate policy environments, flawed markets for products and difficulty emerging from dependency to make a large scale impact.

Despite these challenges, cooperatives have overcome obstacles and shown notable accomplishments at an impressive scale that are described herein, including: 100,000 dairy cooperatives in India with 12 million members; rural electric cooperatives in Bangladesh that serve approximately 28 million people; over 800 rural credit cooperatives in Russia with 92,000 members; insurance co-ops insuring two million people in Colombia; credit union movements in Ecuador and Kenya, both with more than a million members; and Fair Trade-certified coffee cooperatives in Ethiopia, Rwanda, East Timor and Central America that link thousands of smallholder farmers directly into global markets with premium coffee prices.

Cooperatives make an instrumental contribution to transformational international development via three primary pathways:

  1. Economic Pathway — alleviating poverty; stimulating economic growth
  2. Democratic Pathway — providing a framework for democratic participation
  3. Social Pathway — building social capital and trust (including prior to and after conflict); bridging ethnic, religious and political divides; and providing social services (especially addressing HIV/AIDS)

The following publication from the U.S. Overseas Cooperative Development Council (OCDC) provides an illuminating and highly relevant analysis of cooperatives’ contributions to international development in developing countries around the world.

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