Cooperatives, Economic Democratization and Rural Development
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Cooperatives, Economic Democratization and Rural Development

Edited by Jos Bijman, Roldan Muradian and Jur Schuurman

Agricultural cooperatives and producer organizations are institutional innovations which have the potential to reduce poverty and improve food security. This book presents a raft of international case studies, from developing and transition countries, to analyse the internal and external challenges that these complex organizations face and the solutions that they have developed. The contributors provide a greater understanding of the transformation of traditional community organizations into modern farmer-owned businesses. They cover issues including: the impact on rural development and inclusiveness, the role of social capital, formal versus informal organizations, democratic participation and member relations, and their role in value chains.
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Chapter 6: Social capital and agricultural cooperatives: experimental evidence from Ethiopia

Annemarie Groot Kormelinck, Christine Plaisier, Roldan Muradian and Ruerd Ruben

Abstract

Given the increasing importance that is attributed to social capital in cooperative-type organizations, we test the hypothesis that members of high-performance cooperatives exhibit higher levels of social capital (as measured by interpersonal and institutional trust) compared to members of low-performance cooperatives. A field survey and three behavioural games were undertaken amongst members of two high- and two low-performance primary marketing coffee cooperatives in the Sidama region in Ethiopia. We find evidence supporting our hypothesis, with members of high-performance cooperatives exhibiting significant higher levels of institutional trust (stated trust and cooperativeness), and interpersonal trust (behavioural trust and trustworthiness) than members in low-performance cooperatives. Furthermore, gender comparisons show that female members have a higher propensity to adopt pro-social behaviour than their male counterparts, in experimental settings. Since the income of members of high-performance cooperatives is considerably higher than the income of their peers in low-performance cooperatives, we conceptualize a relation between social capital, cooperative performance and members’ income as a loop, with feedbacks occurring between these components.

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