ECONIS Select – Growing the Social Economy in a Fiscal Crisis

07/2010

Selected for the Global Economic Symposium 2010

The financial crisis in the western financial system seems to have past its apex and the banking system, especially certain large investment banks, appear in nearly rude health. However, the cost of the rescue has been borne by governments, or more specifically the taxpayer. Moreover, the deep recession caused by the meltdown has severely depressed corporate profits, reducing tax intake, and government efforts to stimulate the economies has seriously depleted fiscal reserves. A number of western countries (and the Euro) have been pushed to the brink of collapse, with many European countries in serious state, owing to governments’ financial positions and the response of bond, currency and share markets. As actions unfold to cope with the crisis, citizens in countries such as Latvia, Iceland and Greece have engaged in mounting civil unrest. Domestic tranquillity is threatened as the extent of public service delivery and state welfare systems are likely to be reduced.

Into this brink step social businesses and enterprises. Introduced conceptually to last year’s GES, these organisations contain considerable advantages in public service deliery—especiallywith respect to funding and input costs, especially labour. They deploy their creativity, skills and hard work to utilize the methodology of capitalism for social outcomes. However, the sector, though it has grown fast is still very small; at best 5-10% of GDP. Although its activities save governments millions in expenditure, this benefit is hard to capture and incentivizing its generation is problematic. Moreover, many social enterprises have relied on governmental largesse, and the financial structures in which they reside have been highly subsidized.

How can the sector see its scale increase massively, for the public benefit, while at the same time reducing its state reliance, or becoming a net contributor to the public purse?

This raises important questions, including:

• What role can private capital flows play in social investment, and how can this be encouraged or facilitated?
• The corporate sector is already fostering social innovation; how can this be accelerated?
• What can governments do from a legal and fiscal perspective that is revenue neutral or better to address problems in poverty alleviation, transport infrastructure, health, education and training, criminal justice, the environment and welfare provision?
• Are academia, civil society and the nongovernmental organization (NGO) sector promoting socially entrepreneurial solutions? How can this be made more effective?

Literature selected from our database ECONIS:

• Article: Social economy: a new approach in the European discourse about social inclusion? / Piotr Salustowicz
  In: European Societies in Transition. - Münster: LIT, ISBN 978-3-643-10415-1. - 2010, S. 277-290
  Subject heading: Welfare state / Social services / European social policy / EU countries
• Article: The social economy: the worldwide making of a third sector / Jacques Defourny and Patrick Develtere
  In: The worldwide making of the social economy. - Leuven [u.a.]
  Subject heading: Nonprofit organization / Social Economy / Cooperative / Social entrepreneur / Alternative economics / Economic History / Theory / Social conditions / Social consciousness / World
• Title: The worldwide making of the social economy: innovations and changes / Jacques Defourny ... (eds.)
  Published: Leuven [u.a.]: Acco, 2009
  Subject heading: Nonprofit organization / Social Economy / Cooperative / Social entrepreneur / Alternative economics / Social conditions / Public welfare / Social consciousness / World
  Link: Table of contents
• Title: Understanding the social economy, social capital and the third sector / Simon Bridge, Brendan Murtagh and Ken O'Neill
  Published: Basingstoke, Hampshire [u.a.]: Palgrave Macmillan, c 2009
  Subject heading: Social Economy / Nonprofit organization / United Kingdom
  Link: Table of contents
• Article: Why responsible investment falls short of its purpose and what to do about it / Carlos Joly
  In: Corporate governance. - Bradford: Emerald, ISSN 1472-0701, ZDB-ID 20602066. - Bd. 10.2010, 1, S. 18-32
  Subject heading: Financial crisis / Ethical investment / Corporate social responsibility / Portfolio management
• Article: Entrepreneurship: too risky to let loose in a stormy climate? / David Rae
  In: The international journal of entrepreneurship and innovation. - London: IP Publ., ISSN 1465-7503, ZDB-ID 20067574. - Bd. 10.2009, 2, S. 137-147
  Subject heading: Financial crisis / Business Cycle / Entrepreneurs / Ethics / Corporate social responsibility
• Article: The global crisis, social protection and jobs / Joseph Stiglitz
  In: International labour review. - Oxford [u.a.]: Wiley-Blackwell, ISSN 0020-7780, ZDB-ID 2147270. - Bd. 148.2009, 1/2, S. 1-13
  Subject heading: Economic crisis / Financial crisis / Social security / Employment / World
• Article: Ethics: the key to credibility / Felippe Araujo
  In: Finance & bien commun. - Genève, ISSN 1422-4658, ZDB-ID 20313925. - 2009, 1=Nr. 33, S. 68-77
  Subject heading: Financial crisis / Confidence / International financial market / Social behaviour / Economic ethics / Financial liberalization
• Title: The social impact of the Asian financial crisis / ed. by Yun-Peng Chu; Hal Hill
  Published: Cheltenham [u.a.: Elgar, 2001
  Subject heading: Social conditions / |stw| Asia / |stw| Thailand / |stw| Malaysia / |stw| Indonesia / |stw| Philippines / |stw| Taiwan / |stw| South Korea / |stw| Financial crisis
• Article: The meaning of "social safety nets" / Srawooth Paitoonpong; Shigeyuki Abe; Nipon Puopongsakorn
  In: Journal of Asian economics. - Amsterdam [u.a.]: Elsevier Science, ISSN 1049-0078, ZDB-ID 10619203. - Bd. 19.2008, 5/6, S. 467-473
  Subject heading: Financial crisis / Social security / IMF structural adjustment programme / Poverty alleviation / Social network / World
• Article: Protecting pro-poor health services during financial crises
  In: Innovations in health system finance in developing and transitional economies. - Bingley [u.a.]: Emerald Jai, ISBN 978-1-8485-5664-5. - 2009, S. 23-53
  Subject heading: Health service / Health care costs / Poverty alleviation / Financial crisis / Economic crisis / Developing countries / Transition countries
• Title: Mind, society, and human action: time and knowledge in a theory of social economy / Richard E. Wagner
  Published: London [u.a.]: Routledge, 2010
  Subject heading: Economics / Economic sociology
  Link: Table of contents
• Article: Measuring the social economy in the framework of the national accounts / Sybille Mertens
  In: The worldwide making of the social economy. - Leuven [u.a.]
  Subject heading: Social Economy / Nonprofit organization / Social accounting / National Accounts / World
• Article: The social economy: a "new" tool at the service of the battle for employment / Maria Teresa de Sousa
  In: Social innovation, the social economy and world economic development. - Frankfurt am Main [u. a.]: Lang, ISBN 978-3-631-58562-7. - 2009, S. 29-50
  Subject heading: Social Economy / Labour Market / Employment effect / EU countries
• Title: Current themes in social economy research / ed. by F. Fecher ...
  Published: Oxford [u.a.]: Wiley-Blackwell, 2009
• Article: Social economy and social responsibility: alternatives to global anarchy of neoliberalism? / Ursa Golob, Klement Podnar and Marko Lah
  In: International journal of social economics. - Bradford: Emerald, ISSN 0306-8293, ZDB-ID 1886563. - Bd. 36.2009, 5/6, S. 626-640
  Subject heading: Social economics / Responsibility / Corporate social responsibility / Economic liberalism
• Title: Paid and unpaid labour in the social economy: an international perspective / Sergio Destefanis; Marco Musella, eds.
  Published: Heidelberg: Physica, 2009
  Subject heading: Nonprofit organization / Social Economy / Social services / Voluntary work / Job satisfaction / Employment relationship / World / Italy
  Link: Table of contents