What’s Socialism Got to do With It?:

Cooperatives as an Alternative in Economic Development

by Steven Saus, Wright State University

Perceptions matter. The public perception of cooperatives is one of funky food stores frequented by neo-hippies and other fringe members of society. Inner cities are seen as being in irreversible decline - as places where poverty, crime, and unemployment congregate, more Grand Theft Auto than Sesame Street. Regional economic planners believe they are faced with a trade-off between helping current residents of their cities or attracting high-skill, high-wage jobs. All of these perceptions may be false.

Cooperatives can be dynamic agencies for change, allowing economic developers to invest in current residents while achieving economic goals. This paper covers the methods that cooperatives can address market failures and produce positive social externalities. It will outline the shape of local government involvement and mechanisms for adapting current methods of development funding towards encouraging cooperatives. Finally, it will briefly examine the potential pitfalls - both real and rhetorical - of cooperatives as an economic development tool.

Read the full paper here as a PDF.
This paper was presented at the 2007 Bowling Green State University Undergraduate Economics Paper Contest and Conference.  The slideshow is available here (flash), my accompanying notes for the presentation are here.

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