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Social capital and governance of agricultural cooperatives

In: Handbook of Research on Cooperatives and Mutuals

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  • Jerker Nilsson

Abstract

A cooperative is a composite of a cooperative membership organization (society) and a cooperative business firm. This chapter concerns the governance of the former. The internal governance of cooperative societies is of special interest because the members have individual interests but they own the cooperative business firm jointly and must govern it collectively. Therefore, social capital is needed within the membership organization. Social capital, or interpersonal trust, contributes to handling conflicts between members and thus reduces transaction and governance costs. If the collective and individualistic elements of cooperatives are poorly aligned, agency problems appear. Both bridging and bonding types of social capital are needed to solve the problems concerning the internal governance of cooperative societies.

Suggested Citation

  • Jerker Nilsson, 2023. "Social capital and governance of agricultural cooperatives," Chapters, in: Matthew S. Elliott & Michael A. Boland (ed.), Handbook of Research on Cooperatives and Mutuals, chapter 6, pages 116-134, Edward Elgar Publishing.
    • Handle: RePEc:elg:eechap:21014_6
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