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Cooperative Organizations as an Engine of Equitable Rural Economic Development

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  • Altman, Morris

    () (The University of Newcastle, Newcastle Business School)

Abstract

Cooperatives represent an alternative to large-scale corporate farms and plantations as well as to independent unaffiliated small private farms. This paper presents a comparative modeling narrative on cooperative organizational forms’ potential impact on equitable rural development. This speaks to issues of both increasing the size of the economic pie and how this income is distributed. The case is made the cooperatives can potentially generate higher rates of growth and more equitable growth, even in competitive economic environments. An important type of cooperative that is focused upon in this paper is one based on the linking of smaller farms into a cooperative. Economies of scale and scope can be captured by the cooperatives and transaction costs can be reduced. Given cooperative governance, one would also expect higher levels of x-efficiency. Overall, cooperatives can generate relatively high incomes to cooperative members, whilst remaining competitive with the traditional privately owned large farms. Critical to the success of the cooperative, is a set rules and regulations that place them on a level playing field with the privately owned farm. In addition, the implementation and practice of cooperative principles is key to the success of the cooperative farm and rural cooperatives, more generally speaking.

Suggested Citation

  • Altman, Morris, 2015. "Cooperative Organizations as an Engine of Equitable Rural Economic Development," Newcastle Business School Discussion Paper Series: Research on the Frontiers of Knowledge 1, The University of Newcastle, Australia.
  • Handle: RePEc:nbz:nbsuon:2015_1
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    References listed on IDEAS

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    1. George A. Akerlof & Janet L. Yellen, 1990. "The Fair Wage-Effort Hypothesis and Unemployment," The Quarterly Journal of Economics, Oxford University Press, vol. 105(2), pages 255-283.
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    3. Chris Doucouliagos, 1995. "Worker Participation and Productivity in Labor-Managed and Participatory Capitalist Firms: A Meta-Analysis," ILR Review, Cornell University, ILR School, vol. 49(1), pages 58-77, October.
    4. Sexton, Richard J. & Iskow, Julie, 1993. "What Do We Know About the Economic Efficiency of Cooperatives: An Evaluative Survey," Journal of Agricultural Cooperation, National Council of Farmer Cooperatives, vol. 0, pages 1-13.
    5. George A. Akerlof, 1982. "Labor Contracts as Partial Gift Exchange," The Quarterly Journal of Economics, Oxford University Press, vol. 97(4), pages 543-569.
    6. Morris Altman, 2009. "A Behavioral-Institutional Model of Endogenous Growth and Induced Technical Change," Journal of Economic Issues, Taylor & Francis Journals, vol. 43(3), pages 685-714.
    7. Williamson, Oliver E, 1981. "The Modern Corporation: Origins, Evolution, Attributes," Journal of Economic Literature, American Economic Association, vol. 19(4), pages 1537-1568, December.
    8. Bonin, John P & Jones, Derek C & Putterman, Louis, 1993. "Theoretical and Empirical Studies of Producer Cooperatives: Will Ever the Twain Meet?," Journal of Economic Literature, American Economic Association, vol. 31(3), pages 1290-1320, September.
    9. McCain, Roger A., 2008. "Cooperative games and cooperative organizations," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(6), pages 2155-2167, December.
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    Cited by:

    1. Renaud Metereau, 2015. "Get inspired by the global South : peasant-led ecodevelopment strategies in Nicaragua," Post-Print halshs-01162826, HAL.

    More about this item

    Keywords

    Cooperation; Cooperatives; Economics of scale and scope; Fairness; Transaction costs; Cooperative principles; X­efficiency; Dynamic efficiency; Income equality;

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D10 - Microeconomics - - Household Behavior - - - General
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • D6 - Microeconomics - - Welfare Economics
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • G2 - Financial Economics - - Financial Institutions and Services
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • J00 - Labor and Demographic Economics - - General - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J54 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Producer Cooperatives; Labor Managed Firms
    • J8 - Labor and Demographic Economics - - Labor Standards
    • K2 - Law and Economics - - Regulation and Business Law
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • M5 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics

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