Explaining the rarity gap of worker cooperatives between France and Italy

This article examines why Italy has 10 times more worker cooperatives than France. Since this ‘rarity gap’ cannot be explained by higher death rates of French worker cooperatives in respect to Italian ones, we discuss the differences in barriers to worker cooperative entries in the two countries. We suggest that such differences can hardly explain the difference in their rarity. Rather, we propose that the rarity gap of worker cooperatives between France and Italy is due to different institutional opportunity structures which raise the opportunity cost of French worker cooperatives relative to Italian ones. To do so, we perform a comparative institutional analysis, by hypothesising that substitution effects between institutions favouring worker cooperatives and those favouring workers’ participation via alternative organisations could explain the worker-cooperative gap identified in the target countries. We stress that general institutions in favour of worker participation and workers’ solidarity hinder the development of worker cooperatives, and that the prevalence of worker cooperatives in Italy is due to the hostile environment for worker participation. Our findings suggest that institutions favouring workers’ participation can, paradoxically, limit the development of worker cooperatives by making them less attractive as a means of economic participation relative to available alternative organisations.