Government: Social Investment Catalyst or Market Disrupter

Involved in the Quebec social economy movement since its beginnings, and having had close contacts with France for many years, I want to underline the fact that the two experiences are very different. There has been several studies done and articles written in French on this question.

But my bigger concern is that I think it is a mistake to conclude that, because there is public policy in favour of the social economy, that it is necessarily top down. In Quebec, as in Brazil and other countries, policy advances have been made because the movement has organised across sectoral, juridical and regional lines and has been able to propose and win new policy initiatives that respond to grass roots needs. Our position has always been that we are not asking any more than the private sector, that has benefitted from a huge range of public policies. We are only asking for a level playing field and instruments (investment, contracts, access to markets etc) that are adapted to the specific realities of social economy enterprises.
Researchers are calling this the 'co-production' or sometimes the 'co-construction' of public policy. In Quebec, and at the federal level where there was a shortlived social economy initiative, every single element of the policy initiatives emerged from the movements proposals and have been the result of negociation between government and civil society.
This is an important discussion. We will be hosting an international event on this question in 2011. Will keep you posted.

Dear Nancy

You have set me straight on many things--for which I am grateful
Thanks for your comment

It would be great if you could cite or provide URLs for some of the studies outlining Franco-Quebecois differences; I think they could be really interesting, both in terms of similarities and differences in approaches

Good also to correct my implication that heavy governmental involvement necessarily means it is "top-down"--and you are VERY right to point out that in many countries the private sector has been a regular beneficiary of public policies and subsidies. A very fair point.

I also appreciate the reminder that in Quebec policy initiatives have emerged as a result of consensus and negotiations--this further undermines my overly simplistic "top-dow" description. I suppose I was overly influenced by what the rest of Canada said about Quebec :-)

Thanks also for bringing up Brazil.
There are many many models and we must be aware of them all and not limit ourselevs to just the anglo-saxon vs French vs Quebec models.
If you have friends who could contribute their insights from other markets into this discussion, that would be great.

Lastly, please keep us all informed regarding your event in 2011.

Thanks again--rod

That at least is the experience of bringing a social business approach originating in the US to Britain, Rod.

As you may recall for your last article about the social economy, my colleague Terry and I find ourselves on opposite ends of Europe, largely because he as founder is unwelcome to re-enter the UK as a visitor. My impression, based on approaches made since to many branches of government and political representatives is one very much of not invented here.

We've persevered in Ukraine however in spite of the logistical difficulties and by investing in strategy plans to make the case for social innovation, influenced changes in government policy, which in one instance led to an increase of 40% in domestic adoptions.

I wouldn't go as far as describing what we have in the UK as a model, with government and opposition contributing more rhetoric than practical support and in the run up to an election falling over themselves to build reputation under the banner of social enterprise to the detriment of those trying to apply it.

      

"...he as founder is unwelcome to re-enter the UK as a visitor"

Might be a good idea to update that info, cowboy ;> Things change. Even Britain progresses from time to time, very cautiously, despite all efforts to the contrary. Getting in and *wanting* to get in are different things. I can also get into the office of dentists w/o anesthetics, but prefer not to. No offense to Brits. It's a lovely country. Rather dull IMO, but lovely.

In any case, change is always disruptive. Britain still has to ask a monarch for permission, and that will always seem very odd to Americans.

Dear Terry and Jeff

Thanks for your contributions and comments
You both have been regular commentators in the past so I would not wish to discourage you enduly

I also have no idea of the "history"--but it sounds like there is plenty
However, my sense is that this is serious and not just playful banter

In the interest of keeping this discussion focused, and keeping you both out of prison, for breach of libel laws, may I kindly suggest you take your personal battle offline
I would like to keep the battles, however fierce, to something at least close to the subject of the government's role in the social economy
On The Edge, there is a tendency to stray, but this debate is just too far "off piste"

best regards, rod

Rod, The issue of whether governments disrupt social enterprise is indeed something which is serious for us. Here in the UK we are fortunate to have democratic and legal processes which permit drawing these issues to the attention of the public. In my locality for instance, where a group of local politicians were recently exposed by a whistle blower having dipped into council tax funds in their failed efforts to create a local healthcare social enterprise. The democratic process made available to me allows me to draw public attention to the fact that offers of help from experienced locals were disregarded.

In Eastern Europe where Terry has spent most of the last decade, access to democracy can be regarded as close to non-existent.

It's been our interpretation of social innovation that government needs to be challenged to effect social progress. Terry can offer many illustrations. What he'd experienced in Russia for example, has since become the fate of venture capitalist Bill Browder.

We're operating in territory where UK libel laws are used to prevent investigative journalism and find ourselves the victims of libel in efforts aimed at suppressing issues of public concern we've raised which are entirely congruent with responsibilities set out in a written constitution.

We'd have achieved little had we not seen challenging government as part of what we need to do.

             

                  

Rod,
Keeping us out of prison? For libel? Would you care to elaborate?



Listen: most of this forum is academic discussion. Moreover, this forum is not only academic discussion, it is polite academic discussion. Try polite academic discussion in the face of corrupt criminals who run countries in the bottom half of Transparency International's corruption index and see what happens. Their hands will be out expecting cash because they deem such folks as fools. It is those countries that are most in need of social benefit and development. But that's held up by hoodlums expecting bribes at minimum. Refuse to pay them at one's own risk. I don't pay bribes, so I pay the price for not doing so. That is normal for any effective change agent, lest they undermine the most crucial reforms needed to start with. It's a simple rule for dealing with corruption: don't be corrupt. Just don't.

I work in post-Soviet space, and do so to offer genuine friendship in the face of long, harsh enmity and deep distrust. My life is threatened fairly often, with occasional physical attacks. It's dangerous. It's much worse in hot-spots such as Afghanistan and Pakistan. In that sense, any seeming conflict with friends is serious because they are friends. Friends typically want the best for each other, not least basic safety and security. Which is exactly what I and others working in the real-world trenches are trying to bring to our target locations. Not ordnance and threats of more of more of it, but real friendship, understanding, and assistance even if our home countries' foreign policies are sorely lacking. Or, per the topic of this particular thread, disruptor and some.

You're talking about UK, Canada, and France. Check their TI rankings. Those are very safe venues, befitting risk-averse academics or people who are just too afraid to get into the tough areas and do the heavy lifting. For those of us who are willing to go to such areas, I think it's safe to say that most of us don't like having our research and project designs confiscated by others who weren't willing or able to do it themselves. That includes government agencies and academic institutions, particularly the latter who partner with the former using work they did not do and are not authorized to use just because they want to. Where else can someone go to market, pick up what they want because they need it, put it in their shopping bag, and walk out without paying? That's called theft, or maybe shoplifting. In modern vernacular, doing that with someone else's research and design is called intellectual property theft. It's very, very frustrating when it happens, particularly at the hands of august academic institutions, aid programs, and others who think they have enough clout to crush anyone who objects. In which case, such organizations have defeated the purpose of aid and development on the principle that some people just don't matter and can be disposed of. Say, with threats of libel?

Finally, intellectual property theft is also illegal.

I do hope this properly and reasonably politely answers your kind concerns about keeping us out of prison and so on.

Regards,
Terry

Hi Rod - I hope nobody minds me putting up another black n white photo, can't help myself, I'm an artist, I like to keep it fresh - anyway, if we want to choose our own tomorrow free from the shadow of yesterday, the business sector and the public sector have to come together. And as to how best measure the success of that, perhaps an amalgamation of the models, without all the competing for and against, is a good bet (in also promoting generosity and best practices.)

I agree with Terry, 'change is always disruptive' that's why it gets such a bad rap. Top-down never likes to let go, and ground up always face barriers on the way up. So governments role in accelerating societal development, lies in between, because of it's position in scope and scale, it's government's role to facilitate the action, in creating opportunities and network exchanges for the social economy.

In helping drive productivity and competitiveness (for socially inclusive wealth creation) like Jeff said, 'government needs to be challenged to affect social progress' and you know Rod, the hope and awe is in whether government can see the error(s) of it's ways, in steering toward, the general direction of a place, where purpose trumps profit and ethics trump greed...

I know, I'm pushing the imagination boat out on that one...and am also wondering too, whether these types of initiatives 'cause other things to come into being.' On the path to self-reliance, like Mother Hubbard warned, without diversifying revenue streams, it's unsustainable to give until bare.

Dear Jo

Thanks for your comment
For what its worth, I like the photo

I suppose it is positive sometimes when business and gvernment come together, but they do not always do so in our interest!

Regards, rod

Dear all,

my name is Yanina Hristova from Bulgaria and I found this discussion very useful. You are all talking about the importance of government support and about the different ways it is applied. As the project manager of a South East Europe Project for development of social enterprises in Bulgaria, I can contribute to this discussion with examples from Bulgaria. Although BG is a EU member state, the government here is not aware of the benefits of social economy, which is too sophisticated a concept for them to recognise as priority.
Our team is now writing a National Report on the State of the art of SE in Bulgaria (and 7 other SEE countries) and so far we have interviewd basically all existing SE. They have ALL said that they are on the verge of closing down not because of lack of markets or lack of opportunities, but because every move they make is obstructed by the ridiculuous state policies.
For example, since "Social enterprise"is not legally defined anywhere in the official legislation. Although it might seem to you an insignificant issue, it results in the National Revenue Agency penalizing non government organisation for making profit through commercial activity and transfering it to the NGO. They SE owners are accused of conflict of interest and money laundering. This, together with the disloyal competition from the private business and mainly goods imported from China and the lack of ANY government recognition of SE whatsoever has doomed the handful of Bulgarian SE to slow but certain close-down. The most successful SE here used to be a small Trade Fair Organic Shop that sold items produced locally, but they reported bankrupt recently. Another SE that was successful is the Samaritans in Stara Zagora town. They are honey producers where all the profit goes to a youth crisis centre. Their work has been widely recognised across Bulgaria but the government doesn't hear.

On top of that, the Ministry of Labour and Social Policy recently published a call for proposals to support the creation of new SE and support of existing ones, with a total budget of approx. 10 million EUR. All the existing SE applied but NONE of them was awarded a grant. They funded all the wrong people for the wrong things. When I spoke to one of the deputy ministers about this situation, she just sighed and said: I admit that the project evaluators working in this ministry confuse SE with social service providers.

Now, I will let you draw the conclusions yourself.
One thing is certain: It doesn't matter what kind of model is applied in your country (top down or more liberal) as long as it works and as long as the government is not indifferent.

Dear Yanina

I have been writing on Social Edge for a few years now
Your story and arguments are one of the most moving I have ever read

Thank you so much for your post and your thoughts
I must confess I have a bias
I travelled to the Balkans in 2007 and fell in love with the region
Luckily, I had the opportunity to spend five days in Bulgaria (Sofia only)
While there I met about a dozen social entrepreneurs
They were among the most inspiring people I met that entire summer

You can read about them all on a blog I kept while I was there
Please have a look at the posts at http://www.clearlyso.com/balkans/?m=200708&paged=3
The main blog is at ClearlySo by going to www.clearlyso.com/balkans
Some of these people have made progress--perhaps you can help each other?
If I can help you get in touch with them please contact me at rod@clearlyso.com

regards, rod

I think the thrust of your conclusion is apt
That the actual model is irrelevant as long as government facilitates, and is at least not unhelpful, as seems the case in Bulgaria, as you say

best of luck, rod

Yanina,
If you contact me off-list, I can help you understand how to navigate the situation in Bulgaria. newswire@yahoo.com and/or webconsult_2000@yahoo.com