Institutionalization of popular and solidarity economy in Ecuador

The institutionalization process of popular and solidarity economy (EPS for its Spanish acronym) is an original feature of several Latin American countries such as Ecuador (Coraggio, 2011). Since 2008, the Ecuadorian... [ view full abstract ]

The institutionalization process of popular and solidarity economy (EPS for its Spanish acronym) is an original feature of several Latin American countries such as Ecuador (Coraggio, 2011). Since 2008, the Ecuadorian Constitutional Charter upholds the “Buen Vivir” as the macro social horizon in a post-development perspective (Gudynas, 2011; Acosta, 2010; Chambers, 2004). Hence, a plural economy (Laville, 2003, 2006; Pouw & McGregor, 2014) is nowadays recognized, which includes private and public forms of economic organization and a popular and solidarity sector as well.

The construction of EPS in Ecuador certainly responds to a shared confrontation in the public arena about the modernization paradigm and the effects of neoliberal socioeconomic policies carried out in the previous decades (Acosta, 2010; Ponce, 2011). Nevertheless, it is mainly the result of a configuration of both tensions and historical balances among different social actors (Espinosa, 2010). In this context, the new institutional EPS framework (in terms of legal arrangements and political-administrative arbitrations) might appear as a formal response to social actors’ demands (Lemaître, Richer, & Carvalho de França Filho, 2011; McGregor, 2004), as well as a determined intervention by the State (Lemaître et al., 2011; Ponce, 2011).

In order to operationalize this institutional mutation, in which the profit enterprise is no longer legitimized as the ideal type of socio-economic organization (as mainstream literature suggested) (Cloutier & Langley, 2007; Lee, 2011), the Organic Law of Popular and Solidarity Economy (LOEPS for its Spanish acronym) announces a classification of four segments of initiatives that operate in a diversity of activities (production, exchange, consumption of goods and services, and finance) organized into: a) cooperatives, b) self-managed associations, c) community organizations and community banks (whose identity is based on territorial, family, ethnic or cultural links), and d) popular economic units (family businesses, self-employed microenterprises and the care economy).

In spite of their heterogeneity (Jácome & Ruiz, 2013), those collective initiatives from each category reveal a common rationale that is not driven by the sole purpose of profit maximization, but is based on work’s value and the reproduction of life of their members and communities by satisfying material and immaterial needs (Sarria Icaza & Tiriba, 2006; Hillenkamp, 2008; Hinkelammert & Mora, 2003; Coraggio, 2011, 2012). Moreover, empiric studies (Lemaître, 2009; Ruiz & Egüez, 2014, based on Polanyi, 1977) have highlighted that, for their sustainability, SE initiatives combine simultaneously different economic logics based on principles of reciprocity, distribution, market-exchange and householding.

This new context sets off the creation of structures aimed at the regulation, promotion, control and funding of the EPS sector (Ponce, 2011). The institutional dimension (in terms of Hillenkamp & Laville, 2015) is, therefore, an essential element to understanding the contributions and limits of the Ecuadorian normative framework that is shaping SE initiatives.

Thus, the aim of this paper is threefold. First we present a diachronic analysis of EPS institutionalization process. We identify four institutional sources that have led the initiatives to enroll in the public sphere. On that basis, we characterize the current EPS organization models throughout a synthetic approach to all the formally recognized categories in Ecuador since LOEPS was established in 2011. Finally, we discuss the tensions and challenges for EPS initiatives in the current institutional framework.

Our analysis is informed by the works of historically minded economists and sociologists, and by the information gathered from semi-structured interviews conducted with organizations leaders, social movements representatives and policy makers in April - May 2015.

Keywords: popular and solidarity economy, Ecuador, institutionalization.