Cooperatives and nonprofit organizations in Swedish social welfare more

Annuls of Public and Cooperative Economics 672 1996 pp. 5 2 7 COOPERATIVES AND NONPROFIT ORGANIZATIONS IN SWEDISH SOCIAL WELFARE by Yohanan STRYJAN The School of Business, University of Stockholm and Filip WIJKSTROM The Stockholm School of Economics ABSTRACT*: The Swedish welfare system was developed in an incremental fashion in an interaction between the state and a range of voluntary organizations. Consequently, Swedish voluntary organizations do not quite fit accepted typologies, with regard to underlying normative principles, fields of activity and organizational forms. The absolute size of the Swedish nonprof2 sector is comparable with that of other European countries. However, the bulk of its activity is within policy formulation, rather than service provision; concepts of membership and ‘popular movement ’ are central, and charitable organizations are marginal. The spread of existing organizational forms is reviewed, with particular reference to the role of cooperatives. New cooperative users’ and producers’ organizations play an important role in the current expansion of third-sector organizations providing welfare services. Three case descriptions of new cooperative forms are appended. 1 The Swedishwelfare sector: a brief introduction The Swedish welfare state is renowned for its universal coverage, relatively high benefit levels and social service standards, and a virtual public sector monopoly on both the provision and the distribution of *RQsum6en fin d’article; Zusammenfassung am Ende des Artikels; res6men a1 fin del articulo. QCIRIEC 1996. Published by Blackwell Publishers, 108 Cowley Road, Oxford OX4 lJF, UK and 238 Main Street, Cambridge, MA 02142, USA. 6 Y STRYJAN & E WIJKSTROM . welfare services. The Swedish welfare model was founded by cooperatives and nonprofit organizations. They gradually redefined their tasks and withdrew from the provision of services, as the scope of the public monopoly was expanded. The current contracticin of the public sector is accompanied by a reverse movement, which is reviewed in this article - the re-emergence and expansion of nonprofit welfare providers. The Swedish model’s specific combination of normative assumptions and institutional practices is probably unique. It is useful to open a discussion of the current transformation of the Swedish welfare state by a brief review of some of its normative underpinnings. Collectivism and individualism. Society a t large (rather than households) is considered the major provider of welfare. Welfare policies are primarily a n issue of distribution. Somewhat a t odds with its collectivist spirit, the model also contains a fiercely individualistic slant. Entitlements are strictly individual, and decoupled from any affiliation to any collectivity, even the family. Equality and exclusion. A strong egalitarian emphasis is applied to both ends of the scale. Welfare measures are primarily targeted on socially sanctioned needs, rather than on the needy. Ideally, t h e model can be perceived as a general insurance scheme (Hedhorg and Meidner 1984), safeguarding average welfare for the entire population, rather than baseline welfare to targeted problem groups. As we shall see later, this strict adherence to the average impairs its ability to recognize new and/or marginal problem groups. Thus, the public sector has managed the up-market segment of personal social services. Nonprofit organizations helve catered for lowvisibility segments. Centralism and diversity. Contrary to its popular image, the Swedish model was never centralist, in the term’s conventional usage. Instead, there is a ‘soft’state (Guillet de Monthoux 1993), and ac network of county authorities and municipalities, endowed with their own elected bodies levying income tax. In times of stability and national consensus, this ‘strong society’ structure may appear monolithic and hierarchical. In times of rapid change, however, a considerable amount of local variation is generated. The model and its gradual expansion from the 1930s onwards were backed by a broad national consensus, and a pervading faith in social engineering (Hirdman 1989). Criticism first became noticeable in the 1970% and gained momentum in the ’80s. It was powered by: disillusionment with social engineering approaches, and with the notion of further growth as a panacea ifor all shortcomings; resistance QCIRIEC 1996 COOPERATIVESAND NPO IN SWEDISH SOCIAL WELFARE 7 to the advancing industrialization of care, triggered by rising education levels (Saltman and von Otter 1992); a growing insight that some welfare problems could best be handled outside the public sector (Wijkstrom 1994); and increasing economic strains, fist within the public sector, and eventually in the economy a t large. (Whether true in an absolute sense or not, the belief that ‘Sweden cannot afford its public sector ’ became increasingly widespread, and a political factor t o be reckoned with.) Reform of the public sector, introducing quasi-market mechanisms and enhancing client choice, was started in the late 1980s (Gustafsson 1994). The clear distinction between purchasers and providers it introduced provided the preconditions for entry of nonpublic service providers into the field. Interest in third-sector or nonprofit-sector service provision increased on both the right and the left wings of the political spectrum (Wijkstrom 1994). The elections of 1991 brought t o power a Conservative majority, both nationally and throughout local government. In line with its commitments (Pestoff 1992)’ it promptly embarked on a policy of trimming down the public sector, by way of cost-cutting and the hiving off of publicly owned operations to nonpublic (corporate and nonprofit) operators. The ambitious reform programme came t o be denoted by ‘Systemskifttk (system transformation). The deepening economic crisis gave initial momentum to the process. Ambitions notwithstanding, the reform programme did not perform up t o expectations (Loord-Gynne and Mann 1995).The welfare system’s decentralized organization slowed down the pace of reform. Local hindrances lowered the rates of entry of new organizations into the field, and of conversion of existing ones, crippling its key element (Stryjan 1995). The Conservative government’s welfare policies generated, eventually, a powerful backlash which brought the Social Democratic Party back to power both locally and nationally in the 1994 elections. The Social Democratic government’s attitude towards nonprofit organizations is, a t best, ambiguous. As the major questions that faced the government and the public sector from the 1980s onwards are still unsolved, an opening for the nonprofit sector appears almost inevitable. 2 The nonprofit sector: situation and recent t r e n d s The expansion of the public sector from the 1950s onwards was often accomplished through the absorption of existing nonprofit or OCIRIEC 1996 8 Y. STRYJAN & F. WJKSTROM - voluntary activities into the public sector. Two basic interpretations of this relationship between the state (or the public sector) and the nonprofit sector have been suggested by research. (i) The competition moa!eZ assumes that. the expansion of the public sector inevitably entails marginalization of the nonprofit sector, and vice versa. The relationship between the two sectors is seen in terms of colonization and domination (e.g. Boli 1991,1992). (ii) The cooperation model views the relationship as basically symbiotic (Salamon 1987; Kuhnle and Selle 1992a, 199213). The emergence of cooperative, nonprofit, and voluntary organizations - and their eventual co-option into the public sector - may be stages in an essentially cooperative relationship. In a way, both perspectives are appropriate to the Swedish case. The distinction is in the eye of the beholder. Etutizdion proceeded through a n increasing intermeshing between the public/state and the organizational spheres (Heckscher 1951). It is often difficult to determine who set the agenda for whom. Furthermore, while relinquishing control over actual service production, nonprofit organizations simultaneously gained a n increasing say, and a new field of activity emerged - that of policy formulation. One result of this complicated genesis has been that Swedish nonprofit organizations do not quite fit accepted typologies, with regard to their fields of activity and organizational forms. This creates a two-way conceptual confusion. Internationally accepted labels, such as ‘charitable’ or ‘voluntary ’ organizations, are virtually absent from the Swedish institutional and legal vocabulary. Key Swedish concepts, on the other hand, lack a clear correspondent in international terminology. This has led to the fact that comparative researchers often experience difficulties identifying the Swedish. sector (Lundstrom and Wijkstrom 1995a), although the absolute size of the Swedish nonprofit sector seems to be ‘normal’ when compared with other countries. Most typically, nonprofit organizations ’ low profile in service provision tends to lead to a conclusion that Sweden lacks a nonprofit or voluntary sector (e.g. James 1989). However, there is now strong support for a counter-movement in the Swedish sector. This process could be described as a gradual shift from voice to service for the nonprofit sector as a whole (Lundstrom and Wijkstrom 1995b). Wijkstrom and Lundstrom (1995b) also find that the operating expenditures of the sector represent about 4 per cent of the Swedish gross domestic product (GDP). corresponding size for fiance is 3.3 The per cent, for Germany 3.6 per cent, and for the United Kingdom 4.8 per cent (Salamon and Anheier 1994). Nonprofit and voluntary OCWEC 1996 COOPERATIVESAND NPO IN SWEDISH SOCIAL WELFARE 9 organizations in Sweden simply apply themselves to different tasks from their European counterparts. Their central task has been to provide their members or beneficiaries with a voice i n and influence over policy making rather than with services (Lundstrom and Wijkstrom 1995b). In this respect, Swedish organizations antedate current trends of ‘new ’ voluntarism (F’asquinelli 1992, pp. 203-4). In the limited niches of activity in which actual personal social services of some importance are provided, such as rehabilitation of drug abusers (Stenius 1995), and in care of the homeless (Nordfeldt 1994), the role of the nonprofit organizations has been that of bona fide outriders (Blennberger 1993), pending an envisioned intervention of the public sector. 2.1 The organizations Basic to the understanding of the organizational specifics of the Swedish third (cooperative or nonprofit) sector are the twin concepts of ‘folkrorelse’, or popular mass (folk) movement, and membership, briefly discussed below. The organizations in question are certainly not ideal (cf. Blomdahl 1990).The salient point is that they are trying to live up to (and, consequently, often fall short of) quite a different set of expectations than do their counterparts internationally. Folk movement. This is a n interesting and somewhat special type of organization in the Scandinavian countries. Despite its wide usage, or perhaps because of it, the term lacks a clear dehition.The label may be applied to charitable organizations as well as to interest-based ones. To qualify as a movement, a n organization should be broadly based and democratic (Heckscher 1951). It is expected to carry an ideological message, have open membership, and be independent of government (Svedberg 1981, Engberg 1986, Jonsson 1995). Normatively speaking, the folk movement concept is the nexus at which the individualistic and the collectivist strains of the societal model converge: folk movements derive their legitimacy from individual voluntary adherence (membership). The collectivity is defined in terms of an ideological goal adopted by its members. Naturally, reality falls short of this idealized description. The aim here is primarily to define Swedish societal aspirations. The strong element of goodwill traditionally associated with the folk movement label caused nonprofit or voluntary organizations to seek to assume the movement mantle. In a recent study of the sector (Lundstrom and Wijkstrom 1995b; Wijkstrom 1995), more than 40 per cent of the responding organizations claimed to be popular mass movement organizations. QCIRIEC 1996 1 0 Y. STRYJAN & F WJKSTROM . Membership.The prevalence of membership of formal associations among the population is a distinct feature of the Swedish situation (Pestoff 1977). Memberships of national organizations total about 31 million; the average Swede is a member of four national organizations. Only one out of ten Swedes is not a member of any association. On the local level, there are about 145,000associations afFiliated to regional or national organizations, and about 50,000 local associations not connected to any larger organization (SOU 1987, p. 33). Two recent studies indicate that nearly 50 per cent of the Swedish population are active to avarying degree in different associations.The yearly volume of voluntary work invested by these memblers is estimated at 480 million hours (Wijkstrom 1994). Although comparisons must be made with great caution, it would seem that Swedes are almost as active as, for instance, the British (Jeppson Grassman 1993). The Swedish attitude to charitable organizations is somewhat of an obverse side of the same normative coin: an organization that does not welcome its beneficiaries to join in as members is anathema. Consequently, as Boli (1991, p. 96) correctly observes, the category of 'charitable organizations ' is normally lacking in Swedish statistics. However, Boli's conclusion is that since the responsibility for domestic social welfare is shouldered by the state, there is no need for such organizations. This notwithstanding, a recent survey found that 7 per cent of the responding organizations could denote themselves as charitable organizations if they so chose (Lundstrom and Wijkstrom 1995a, Wijkstrom 1995). Because of the derogative connotations the concept of charity has in Sweden (Qvarsell 1993, Stryjan 1994b), it is consistently avoided even by the Swedish chapters of international charity organizations? 2.2 The economics of the nonprofit sector Recent estimates indicate that the operating expenditures of the Swedish nonprofit sector reached nearly 60 billion krona in '1992, that is, about 4.0 per cent of GDP.2This is more or less in line with the size of the sector in other developed welfare #countries.In the Swedish case, 1 The Anglo-Saxon concept of charity hrla a broader meaning tha.n it has in Sweden. In Swedish, it is used solely in the field of social welfare (James 1989, Kuhnle and Selle 1992a, Blennberger 1993, Qvarselll993). 2 The figures are based on a survey conducted by a Swedish team as a joint project with'The Johns Hopkins Comparative Nonprofit Sector Project' led by Lester M. Salamon. QCIRIEC 1996 COOPERATIVESAND NPO I SWEDISH SOCIAL WELFARE N 11 however, the trades unions and the sports sector dominate the picture (17.8 per cent and 14.4 per cent of total operating expenditures, respectively), while health care represents less than 3 per cent of the nonprofit sector’s total expenditures, and social services 7.4 per cent, the two of them together representing only some 10 per cent of the total operating expenditures of the Swedish nonprofit sector (Lundstrom and Wijkstrom 1995b, Wijkstrom et al. 1995, Wijkstrom 1996). In countries like France (43.4 per cent), Germany (58.2 per cent), or the United States (63.4 per cent), these two sectors - health care and social services - amount to about half of all the nonprofit organizations ’ turnover (Salamon and Anheier 1994). The three forms of incorporation commonly resorted to by organizations within the nonprofit sector are foundation (stiftelse), ideell (or nonprofit) association, and economic association. These categories are not easily translated into non-Swedish typologies (Boli 1991, 1992). Roughly speaking, an association is a formalized framework established by a number of individuals (or legal entities), to pursue a common objective (Hemstrom 1992). According to Boli (1992, pp. 244-5), the Swedish concept of association (forening) carries more of a collective character than the Anglo-Saxon equivalent of voluntary association. A foundation is created through the permanent designation of a certain property to be administered autonomously for a clearly specified purpose. Instead of resting on individuals as members, as is the core criterion for an association, the foundation is based solely on the coupling of autonomous property with a predetermined objective (Norin and Wessman 1993).3 Cooperatives do not exist as a distinct type of legal subject. Foundations, however, are virtually certain not to be cooperatives. Economic associations are most likely to be cooperatives, while ideell associations may or may not be cooperatives. 3 The total number of foundations in Sweden is estimated at about 50,000 and they represent a considerable amount of accumulated wealth (Forslag till lag om Stiftelser 1987, SCB 1979). Of importance for the nonprofit sector is also the fact that Sweden has a state church. Much of the social work carried out outside local or regional government institutions in Sweden is performed by the church. While the church was incorporated by the state administration in the 16th century and has constitutionally remained so, its organizational structure is independent of the rest of the state administration (Ekstrom 1989). Important steps have been taken recently to separate the church from the state more formally. Neither the foundations nor the Swedish church will be dealt with further in this text. QCIRIEC 1996 12 Y STRYJAN & F. WIJKSTROM . Table 1-The relative shares of operating expenditure by legal form of incorporation Health care ldeell Economic Foundation Social services 43 per cent 29 per cent 23 per cent 49 per cent 8 per cent 43 per cent Ideell associations represent nearly half of the organizations active in any of the two fields (health and social services) while economic associations are most prominent in the area of social services, and foundations have their relative strength in the field of health care (Table 1). Of the nonprofit organizations active in social services in 1992, nearly a half (868 out of 1762) were associations (ideell or economic) active in the area of child day care, mostly cooperative in character. They stand for nearly 43 per cent of the total operating expenditures of the associations active within social services. The other major group (at least 250 foundations and associations) are organizations working with the rehabilitation of drug abusers, which represent, however, only about 3 per cent of the total operating expenditures in nonprofit social services. Approximately 150-200 larger organizations are active in the area of health care. Nearly two-thirds of these are associations (economic or ideell). However, foundations are generally older and larger (c. 35 employees per organization, as compared to less than 20 for associations), and account. for nearly 43 per cent of the operating expenditure on health care. 3 Established cooperatives: an overview The traditional cooperative movement in Sweden is dominated by large, well established consumer and producer cooperatives ('Ihble 2). The joint turnover of the major cooperative actors represents a substantial part of the Swedish GDP. In 1994 these organizations' turn-over added up to a total of 160 bil.lion krona, which represented about 10 per cent of GDP that year (Rjreningen Kooperativa Studier 1995). A typical feature of Swedish cooperatives is the strict industrywise division of the sphere. As a rule, cooperatives integrate vertically, QCWEC 1996 COOPERATIVES AND NPO IN SWEDISH SOCIAL WELFARE 13 Table 2-The Name KF major cooperative organizations in Sweden No.of members' 102 3938 (57) 1621 3739 (LP) Legal representatives2 126,000 Market share (1994) Year establshed 1899 1923 1940 1958 1925 1929 HSB Riksbyggen Fonus Folksam LRF' 21.1 per cent (groceries) 457 per cent 22.0 per cent 3.6 per cent 70-100 per cent 'Local and/or regional associations (in the case of HSB both a local and regional tier exist) 'The organization's assembly consists of representattvesof consumer cooperative organizations and of trades unions 'The number given applies to physical persons/farms LRF itself organizes 15 cooperative branch organizations in the farming/processing sphere. The founding date given in the table is that of RLF, LRF's predecessor Branch unions (grain, dairy, etc) were established around World War I (Book and Johansson 1988) into national organizations, that generally avoid intrusion into each other's domains. This structure, and the absence of strong intercooperative entrepreneurial bodies, somewhat hinder expansion into new fields. Established cooperatives' direct involvement in the welfare sector has thus been rather limited. Cooperative development has primarily occurred through local and independent initiatives. Established cooperatives did, however, make an important contribution in facilitating this development, primarily through the Cooperative Institute, and through support at both central and local level for the growing network of local CDAs (cooperative development agencies). The consumer cooperative 's negotiating (employer) organization, KFO, has also been instrumental in organizing employment relations in the emerging neo-cooperative sector. 4 New cooperatives in the welfare sector The ongoing contraction of the public sector has opened the field of welfare services to entry of new service providers. New welfare cooperatives are clearly Swedish cooperative's most dynamic sector, which has grown dramatically in the last decade, from a handful in 1985, t o about 1500 cooperatives in 1995. This group consists of newer organizations, engaged on a local and small scale, normally started by local groups. With some prominent exceptions, new cooperatives in this sector have a clearly pragmatic orientation, and lack a movement QCIRIEC 1996 1 4 - Y STRYJAN Rr F WIdKSTROM . . - profile (Stryjan 1994a).The services they organize normally lie within the responsibility of the welfare state, such as assistance for the handicapped, elderly, or child care. The two dominant organization types in this cluster, classified after the category of membership, are users ’ cooperatives and personnel (worker) cooperatives. Users’ cooperatives are constituted by the users of the service in question. Public grants, a t roughly the same amount as to corresponding public services, are a n important source of financing. Members, in this case, pool their individual welfare entitlements, in order to obtain greater control over their lives, not the least through helping them to deal with the welfare apparatus. As a rule, these cooperatives employ professional personnel. The most interesting organizational feature of users’ cooperatives (originally evolved in parent cooperative nursery schools) is that members are usually obliged to invest a specified quota of unpaid labour (from a day a week to some hours a month). Whatever its rationale, the participation of users in daily operation provides members with a n important information channel and a venue of hands-on control. In Hirschman’s (1970,1982)terminology, clients/users have at their disposal not only the options of voice and exit (Pestoff 1994, Moller 1995) but that of involvement as well (Stryjan 1989). The best-known clusters in this group are: (i) Parent cooperative nursery schools: clearly the most numerous and best established cluster, consisting, in 1994, of approximately 1300 cooperatives. Parents constitute and manage the cooperative, which employs professional staff. Normally, parents also participate in its daily operations. Financing consists of parents’ monthly fees and municipal grants. Typically, a parent cooperative would provide day care for a little fewer than 20 children. (ii) The independent living cooperatives, pioneered by STIL, which are founded by gravely physically handicapped persons in need of personal assistance. The cooperative maintains an organization that enables individual members to employ and manage personal assistants. Members ’ contributions are necessarily restricted in this case to administration and office work, which are done entirely by members. This group of cooperatives has clear movement characteristics. Workers’ (personnel) cooperatives came into being first in the 1990s. Earlier attempts to raise worker cooperative solutions were met by resolute opposition from both government and trades unions. Personnel cooperatives often arise through the divestment of formerly public units. Personnel cooperative nursery schools are the biggest OCIRIEC 1996 COOPERATIVESAND NPO IN SWEDISH SOCIALWELFARE 15 group, comprising 129 organizations. These are larger than parent cooperatives, and normally care for 3MO children each. Formally, parents have no say in the running of a personnel cooperative. Observation, however, indicates4 that members in these cooperatives are highly sensitive to parents’ wishes. This is also attested to by high demand for the day care places these cooperatives offer. A recent survey of the field5 identified 21 personnel cooperatives in health care, 13 in care of the elderly, and 6 in psychiatric care. 6 Rehabilitation a n d employment Rehabilitation and reintegration measures were traditionally considered part of the state’s employment policy sphere, while cooperatives were not viewed as a major policy tool. Rehabilitation was considered a question of individual re-entry into employment. The right to employment was (and, in many ways, still is) part of the normative core of the Swedish model. The existence of groups who are basically unemployable indefinitely cannot be easily accommodated into the model. The issue was often defined away through long-term sick leave or early retirement. Though ensuring physical subsistence, this ‘solution’ fails to provide an acceptable social context for the persons involved. In the mid-1980s, the state embarked on an ambitious policy of dismantling big mental hospitals. The resources invested in creating alternative frameworks were, however, sadly insufficient. For the first time in the Swedish model’s history a highly visible problem group was (re)created and released into society. The hardening economic climate also made reintegration increasingly difficult. This new situation has provided a stimulus for new and (by Swedish standards) unconventional solutions, often applying cooperative principles, sometimes developed through the active involvement of local CDAs. The initiatives for many of these new solutions came from employees in the existing institutions. Some of these professionals, along with persons without any previous experience in psychiatric care, have been employed in the new cooperatives (Hansson 1994). ~ ~~ 4 A study of personnel cooperatives in day care has recently been completed (Stryjan 1 9 ) within the project Personnel Cooperatives in the Welfare Market, 94, financed by the Work Environment Fund. 5 The MOFFS project, led by Lars Lindkvist at the University College of Vaxjo. The figures supplied are only partly verified (some of the cooperatives listed may no longer be operative). Definitions of branches were not available. OCIRIEC 1996 1 6 - Y.STRYJAN & F. WJKS’I’ROM - At the moment, there are about 50 cooperative associations of this type throughout Sweden, averaging about 10 members each. Membership is voluntary. Normally, both instructors/care personnel and users join as members. The cooperative provides a workplace for its members/users. Instructors are financed by external grants. The income generated is partly disbursed as hourly wages, supplementary to health insurance payments. Owing to current taxation and health insurance rules, wages are nominal. Eventual surplus is spent on joint projects (excursions, equipment, etc.).The existing cooperatives are run on a n ad hoc basis on grants from various sources. The exact organizational details, the form of incorporation, and the degree of binding t o the municipality vary from case to case. This form of cooperative has made its first steps on the path t o institutionalization. Efforts are presently being made t o establish a network of such projects. Rehabilitation cooperatives for former drug addicts are another new and interesting initiative which is not fully charted as yet. A first cooperative of this type was recently started in the southern part of Greater Stockholm - Basta (Hansson 1995). Typically, there was a considerable amount of discussion on the new organization’s form of legal incorporation. Initially, and a t the would-be members’ insistence, the cooperative was to be incorporated as a joint stock company (uktiebolug).Considerations of image, tax-exempt status, and (political) expediency led to it being eventually incorporated as an ideell association. 6 Problems and prospects The cooperative expansion in welfare services in the last decade has mostly been carried out by local autonomous initiatives. Consequently, we witness considerable innovation and dynamism locally organized individuals themselves provide welfare services, which they also consume (Wijkstrom 1995) - but also a great deal of vulnerability. The new cooperatives ’ financial and legal situation is precarious and their relations with the public sector are both adversarial and symbiotic at one and the same time. All cooperatives active in the sector are dependent on public resources for their survival; welfare cooperatives ’ survival hinges on the contracts they negotiate, from a n extremely unequal position, with their essential competitors. Rehabilitation cooperatives lack a firm position in the system, and survive through more or less improvised grants. Bluntly speaking, cooperatives’ situation calls to mind that of fish in a pond, QCIRIEC 1996 COOPERATIVES AND NPO IN SWEDISH SOCIAL WELFARE 17 with politicians and public sector administrators regulating the water level at whim. Today’s somewhat amorphous situation in the public sector risks abrupt future changes. The future of cooperatives in the sector will be determined by the ability to sustain or increase present rates of formation, and to institutionalize the conditions of survival of those formed. Obviously, the situation calls for modification of the existing framework, in respect to legal form, status, and financing. In keeping with the Swedish institutional tradition, it is reasonable that this should be carried out on the cooperatives’ terms. The salient question is how, and by whom, these terms can be articulated. The initial absence of a movement orientation has greatly contributed to new cooperatives innovative profile. At present, however, i t threatens to become a liability, inasmuch as every cooperative is forced to negotiate, essentially on its own, the precondition of its existence in a hardening climate. Some of the central institutional problems are reviewed below. Regulatwnllegislation. Of the two incorporation forms available to cooperatives in Sweden, the one (ideell association) lacks a limited liability provision, and does not really fit entrepreneurial activities, while the other (economic association) lacks a nonprofit provision, and does not quite provide for enterprises having anything other than economic objectives. Clearly, some adjustment of these legal categories would be desirable, for cooperatives with social objectives (e.g. rehabilitation) to find a legal status that matches their type of activity, perhaps in line with the Italian situation (Barbetta 1993). The unclear status of these social cooperatives in Sweden places them in a double bind: on the one hand, cooperatives are treated as if they were a vanguard of privatization, and viewed with suspicion by trades unions and parts of the political left. When under economic assessment (either for credit, or for contracts), cooperatives tend to be dismissed as ‘less serious’ by banks, development funds, and a portion of the political right. When it comes to the financing of cooperative activities, there are no special social investment instruments in the Swedish banking system. Cooperatives normally find it more difficult to obtain conventional credit than would comparable new private enterprises. Low capitalization further increases cooperatives ’ vulnerability. The increasing organization density, and the common problems new cooperatives encounter, have contributed to an increasing propensity to organize. An organization of parents’ cooperatives was founded in the 1980s (Stryjan 1991). The last two years have seen the emergence of a country-wide association of CDAs and an association QCIRIEC 1996 18 Y STRYJAN 81 F. WIJKSTROM . of personnel cooperative nursery schools in Stockholm. A national network of rehabilitation cooperatives is presently being formed. A key role in future organization will most probably be played by the network of CDAs, already playing an irnportant role in the diffusion and local adaptation of know-how and organizational models. Of the organizations of the new cooperative sphere, the CDAs are also the most experienced in, and best endowed for, the task of networking. Appendix: Cases Case 1.STIL - Stockholm Indepependent Living STIL (Stockholm Independent Living) is a Swedish development of an American idea: centres for independent living (CIL), that enable severely handicapped persons to employ their own personal assistants, and to direct their work.. The movement in Sweden originated in a seminar, organized by DHR (National Association of the Handicapped) in 1983. The 14 participants, some of them activists in organizations for handicapped people, were attracted to the seminar by a notice in the DHR bulletin. An ideell association was constituted in 1984. In 1987, after lengthy discussions with the Stockholm municipality and the Board for Social Affairs (Socialstyrelsen), the two bodies agreedl to finance a test period of one year, in which funds otherwise budgeted within the public sector were to be channelled through STIL. STIL,in turn, acts as a formal employer versus members’ personally appointed assistants. In a manner of speaking, the chief asset that members contribute for the cooperative to ‘trade with’ are their needs, since these entail certain entitlements for public assistance. The cooperative form of organization was suggested by a trades union officer, and found to be the most practical way to cope with the highly institutionalized Swedish employment practices. After an extension in 1988, the project was given permanent status in 1989. Formally, STIL acts as a subcontractor, dispensing specialized municipal services to its members. Presently STIL has over 120 members in a number of municipalities in the Greater Stockholm region. Members manage the organization’s considerable administration, which involves contacts with municipalities and responsibility for some 600 part-time employees, and organize courses and seminars. Associations of a similiar type (with some local differences of emphasis and formal set-up) were established with STIL’ssupport in Gothenburg, Malmo, Eskilstuna, and Orebro. QCIRIEC 1996 COOPERATIVES AND NPO IN SWEDISH SOCIAL WELFARE 1 9 Besides an improved service, the cooperative effects a n important symbolic transformation of its members from passive recipients of help to employers. Basic to STIL’s militant stance is a rejection of the status of miinsterkrympling (‘a well behaved cripple’) thrust on the severely handicapped by well meaning and patronizing social authorities (typically enough, the newsletter of the Swedish Independent Living Movement is named Stiletten, the Stiletto). Members’ policy of employing a large number of unprofessional part-time assistants, rather than a handful of professional full-time ones, is also, to a large extent, part of the quest to avoid binding dependency relations. It also enables members to follow their personal inclinations, and to enjoy a more varied social network. It would have been quite impossible to implement within the public sector. The position STIL members thus craft for themselves is quite demanding, both administratively and mentally. A n important activity of the cooperative is to school new members in the administrative and personal skills of managing their own respective networks, and providing peer counselling to members. STIL’s strategy is controversial. The cooperative has had to face external criticism, and cope with internal conflict. It has occasionally been accused of elitist attitudes. Inasmuch its credo puts strong emphasis on personal choice and motivation, this accusation is not wholly ungrounded. The cooperative’s central contribution lies, indeed, in providing an option for those willing to take it, and acting as a pathfinder, exploring the limits of the options severely handicapped people can take to transcend their limitations. It does not claim to provide an universal model for all severely handicapped people. Case 2. Parent cooperative day care6 Parent cooperative nursery schools are constituted by groups of parents, who form an association, employ professional staff, and take over responsibility for their children’s day care from the municipality. Presently, there are approximately 1300 such cooperatives, normally incorporated as economic associations (older cooperatives may be registered as ideell associations, since economic associations were not eligible for day care grants until the late 1980s).The organizational form evolved spontaneously in the ’ ~ O S ,and was fighting for recognition and access to grants for a decade. ~ 6 Adapted from Stryjan (1994~). OCIRIEC 1996 20 Y STRYJAN & F.WIJKSTROM . The early cooperatives were predominantly started with the aim of gaining greater influence over, and involvement in, children’s day care and enabling parents to spend more time with their children. Some of the cooperatives established in this period impose on their members a work obligation of a day per week. Cooperative nurseries still commonly require parents t o contribute a fixed number of work days as a complement to employed labour. The concrete arrangements vary between cooperatives. Parents may be integrated into the work team, manning one full-time equivalent on a weekly, monthly or yearly rota, take charge of certain tasks, such as relieving personnel of cleaning and maintenance tasks, or are on a stand-by list to replace employees on sick leave. Parent cooperative nurseries are organized in a national association - Vdrut Dagis (Our Day-care Centre). Until 1985, demand for cooperative nurseries was kept a t bay in most municipalities through a n informal ban on grants. The explosive increase i n the following years is largely accounted for by a n (informal) lifting of this ban, which was formally abolished in the ‘90s. The case amply illustrates the dynamics of institutional change. The univerval provision of day care services plays an important role in the Swedish model (Hedborg and Meidner 1984). An act of parliament, passed in 1985, proudly promised to ‘build away ’ day care waiting-lists (which were becoming a major political irritant), and compelled all municipalities to provide, from 1991 on, day care for all children above one and a half years of age. The goal was to be achieved through a n expansion (generously financed by state funds) of the public network of nursery schools. Other prospective agencies were denied eligibility for state and municipal grants, and thus effectivelybarred from entry to the field? At the time the act was passed, it was estimated that its objective could be met by a n expansion of the day care system by 55,000 places. In 1989, after a n expansion by 45,000 places, municipalities were still short by 70,000 places (DN 1989).8 Best intentions notwithstanding, municipal planners were trapped between increasing personnel shortages on the one side, and 7 Traditionally, welfare services fees covered only a fraction of the actual cost. To keep fees at an acceptable level, tiny agent operating in this domain would be dependent on public grants to offset high labour costs. 8 The reasons for this spectacular planning miss were several: underestimated demand at the time the prognosis was made; an unexpected rise in nativity; and an overheating of the labour market in the late 80s. Indirectly, this provides a n illustration of how improved social rights and services may stimulate consumption, even without moral hazards being involved. QCIRIEC 1996 COOPERATIVESAND NPO IN SWEDISH SOCIAL WELFARE 21 Table >Parent Year 1975 1980 1985 1986 1987 1988 1989 1990 1991 1992 cooperative day care Number of cooperatives 5 30 150 200 350 400 500 600 800 1000 explosive demand increases on the other. Still reluctant to open the field for private entrepreneurs and corporate agencies, municipal politicians decided to accept parent cooperatives into the circle of forms eligible for government grants. The (largely informal) policy shift came about gradually from 1985, with Conservative-dominated municipalities leading the trend. It was amply reflected by the rapid increase in numbers of day care cooperatives, which obviously had fewer problems in attracting personnel in the overheated labour market of the period. The time series in’hble 3 illustrates the development. The breakthrough for parent cooperatives set a new trend. In the late 19809, the attitude towards consumer (user) cooperative solutions warmed considerably, in other fields besides day care. Cooperatives ’ good economic performance (reflected, for practical purposes, by a lower level of public expenditure) in combination with high parent satisfaction, certainly helped in this respect. Case 3. Samverkarna The cooperative Samverkarna (the Cooperators) was started on the initiative of the Ektorp rehabilitation group in Nacka-Varmdo district of Greater Stockholm. Initially a workshop run by the rehabilitation group, the unit became incorporated as a cooperative (economic association) in 1989. The objective was t o provide a work and meeting place for mental patients who could not manage the (relatively) strict demands of the established ‘sheltered workshop’ programme. Starting with rag-rug weaving, the cooperative branched out. The cooperative consists of approximately 40 members, of whom two are instructors. The one-member-one-vote principle is observed. The cashier post, however, is customarily held by one of the instructors. CCIRIEC 1996 22 Y STRYJAN & E WIJKSTROM . The cooperative designs and produces rag-rugs, takes on contracts for packaging and assembly jobs, and sells office services (maintenance of address registers, group mailing, etc.). The aspiration, at least for the time being, is not for this to be the main source of income for the participants (all of whom are recipients of social security pensions or on sickness leave). Surplus generated by the cooperative is distributed as a n income supplement, according to the number of hours worked.The early retirement and health insurance pension rules currently in power effectively impose a limit on hourly wages, and constitute a powerful disincentive for gainful work. Excess revenue is spent on common activities, or on equipment. The instructors are employed by the cooperative, and financed by grants, on an ad hoc basis. For the time being, there is no institutionalized model for financing the operation. The cooperative is currently considering restructuring, which would turn the organization into a system of two cooperatives: one for the instructors, and one for users. REFERENCES BARBETTA G., 1993, Defining the Nonprofit Sector: Ituly,Working papers of the Johns Hopkins Comparative Nonprofit Sector Project, no. 8, Baltimore: The Johns Hopkins Institute for Policy Studies. BLENNBERGER E., 1993,‘Begrepp och modeller ’, in Rivilligt Socialt Arbete. SOU 1993:82, Allmanna Erlaget, Stockholm. BLOMDAHL U., 1990, Wlkrorelserna och Folket, med Utblick mot Ramtiden, Carlssons, Stockholm. BOLI J., 1991,‘Sweden: is there a viable third sector? ’ in Wuthnow R., ed., Between States and Markets: The Voluntary Sector in Comparative Perspective, Princeton University Press, Princeton. -, 1992, ‘The ties that bind: the nonprofit sector and the state in Sweden?, in K. D. McCarthy, et al., eds, The Nonprofit Sector in the Global Community, Jossey Bass, San Francisco. BOOK S.-A. and Johansson T., 1988, The Co-operative Movement in Sweden, Foreningen Kooperativa Studier, Stockholm. ENGBERG J., 1986, ‘Folkrorelserna i vidlfardssamhallet ’, Statsvetenskapliga institutionen, Umei Universitet. FORENINGEN KOOPERATIVA STUDIER, 1995, Sueriges Kooperativa firetag i Siffmroch figurer, Foreningen Kooperativa Studier, Stockholm. GUILLET de MONTHOUX P., 1990, ‘Modernism and the dominating firm: on the management mentality of the Swedish model’, Studies in OCIRIEC 1996 COOPEXA’XTVESAND NPO IN SWEDISH SOCIAL WELFARE 23 Action Enterprise, PP 1990:3, Department of Business Administration, University of Stockholm. GUSTAFSSON R. A., ed., 1994, Kop och Siidj, var God Svulj? Arbetsmiljofonden, Stockholm. HANSSON J.-H., 1994,‘Arbete och psykiatri. 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Coopbratives et organisations A but non lucratif au sein du systeme de protection sociale suedois Le systime de protection sociale suddois s’est de‘ueloppe‘de faGonprogressive sur base d‘une interaction constante de l‘Etat et d‘une sdrie d‘organisations privkes ci but non luxratif:I1 en rksulte que les organisationsprivdes a but non lucratif en S&de ne se pritent gukre aux typologies classiques fonddes sur les principes normatif, sur le type d‘activitd ou sur la forme organisationnelle. La taille absolue d u secteur sans but lucratif en Suede est du mime ordre que dans ciautres pays europkens. Ndanmoins, son OCIRIEC 1996 26 Y STRYJAN & E WIJKSTROM . - activite‘ principale re‘si.de plus dans la participation ci la formulation des politiques que d a m la production de services; les notions de socidtariat et de mouvement populaire son2 centraux tandis que les organisations caritatiues sont marginales. L’article analyse la diffusion de formes organisationnelles existantes en mettant un accent particulier sur le rde des coope‘ratives. De nouvelles organisations coope‘ratives d‘usagers et de producteurs jouent un r6le important d a m I‘expansion actuelle du tiers secteur dans le domaine des services sociaux. Trois monographies de nouvelles formes d‘organisations coope‘rativessont prksentkes en annexe. Genossenschaftenund Non profit-Unternehmen in der schwedischenWohlfahrt Das schwedische Wohlfahrtssystem wurde in erheblichem Umfang in Interaktion zwischen dem Staat und einer Reihe freiwilliger Organisationen entwickelt. Konsequenterweise entsprechen schwedische freiwillige Organisationen nicht so recht den anerkannten Typologian himichtlich zugrundeliegender normativer Prinzipien, Aktionsbereich und Organisationsform. D e absolute Grtipe des schwedischen Non profiti Sektors ist vergleichbar mit der anderer europaischer Lander. Jedoch besteht der Hauptteil der Aktivitiit in der ‘fpolicy”-Formulierung und weniger in der Erstellung von Dienstleistungen; Konzepte beziiglich Mitgliedschaft und “Volksbewegung”sind von zentraler und wohltatige Organisationen von marginaler Bedeutung. Uber die Spanne der bestehenden Organisationsformen wird ein Uberblick gegeben, wobei auf die Rolle von Genossenschaften besonders Bezug genommen wird. Neue genossenschaftliche Verbmucher- und Produzentenorganisationen spielen eine wichtige Rolle bei der gegenwartigen Expansion von Drittem-SektorOrganisat wnen im Bereich der Erbringung von WohlfahrtsDienstleistungen. Drei Fallbeschreibungen neuer genossenschaftlicher Iibrmen werden in einem Anhang angefiigt. Cooperativasy organizaciones sin fines de lucro en el sistema de proteccibn social sueco El sistema de protecci6n social sueco se ha desarrollado de manera progresiva sobre la base de una interaccitin constante del Estado y de una serie de organizaciones privadas sin fines de lucro. Resultu de ello que las organizaciones privadas sin fines de lucro en Suecia no se asemejan apenas a las tipologias cldsicas fundadas sobre 10s principios normativos, sobre el tipo de actividad o sobre la forma organizativa. La dimensidn absoluta del QCIRIEC 1996 COOPERATIVES AND NPO IN SWEDISH SOCIAL WELFARE 21 sector no lucrativo es en Suecia muy similar a la de otros paises europeos. Sin embargo, su actividad principal reside mas en la participacidn e n la formulacidn depoliticas que en laproduccidn de servicios; las nociones de asociado y de movimiento popular son importantes mientras que las organizaciones caritativas son marginales. El articulo analiza la difusi6n de las formas organizativas existentes poniendo el acento de forma particular en el papel de las cooperativas. Las nuevas organizaciones cooperativas de usuarios y de productores juegan un papel importante e n la expansidn actual del tercer sector en el campo de 10s seruicios sociales. En el anexo se presentan tres monografias de nuevas formas de organizacidn cooperativas. OCJRIEC 1996