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Architecture of an Economy with Social Enterprises: the Relational Capacity Approach

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  • Pieter H.M. RUYS

    () (Law Department of the Polytechnic Institute of Oporto/ISCAP/CECEJ, CIRIEC-Portugal, Portugal)

Abstract

One of the main unresolved issues is the way on which a social enterprise can be embedded in a market economy. That problem is approached here by offering a sound foundation for social-economic modeling with private, non-profit and public sectors.An enterprise, being a nexus of relations, is described and analyzed as an operator, an Actor, which governs the interaction between its relational production factors. Each factor consists of characteristic relational capacities that together determine the identity of an enterprise. By going to the limit of these capacities, and by treating behavioral and positional concepts on an equal footing, one arrives at a generic perspectives structure that orients an enterprise, or any other actor, towards its future. The operator’s generic goal is to enhance its relational capacity, based on improvements of the realizations of the perspectives in terms of values and resources. By endowing this structure with institutional characteristics, an Institutional Design Map is constructed. By ordering institutional factors with in layers with increasing sophistication, market behavior by ‘Econ’s can be distinguished from relational behavior by ‘Human’s, using the terminology introduced by Kahneman. Combining the two, private, social, and public enterprises are identified and conditions for their performance are derived. These enterprises are embedded in an institutional framework, the social economy. A blueprint is presented in which questions as: who owns, who supervises, and who finances social enterprises, are discussed. The introduction of an actor as the basic building stone for the social sciences is based on the mathematical tools, such as projective and convex geometry; it offers as a magnifier glass many opportunities for analysis and can be applied to a great variety of concepts, from micro entrepreneurial behavior to properties macroeconomic systems.

Suggested Citation

  • Pieter H.M. RUYS, 2014. "Architecture of an Economy with Social Enterprises: the Relational Capacity Approach," CIRIEC Working Papers 1413, CIRIEC - Université de Liège.
  • Handle: RePEc:crc:wpaper:1413
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    More about this item

    Keywords

    Institutional Design; Ordering Values; Multilayered Rule rationality; Cooperatives; Sector Policy.;

    JEL classification:

    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • K12 - Law and Economics - - Basic Areas of Law - - - Contract Law
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out

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