Forming the conditions for social enterprise in post-socialist states

In the business, public and third sector triangle determining the formation of social enterprises [3, 2], the state plays a particularly important role. In one extreme, e.g. state socialism, the state is the only sector... [ view full abstract ]

In the business, public and third sector triangle determining the formation of social enterprises [3, 2], the state plays a particularly important role. In one extreme, e.g. state socialism, the state is the only sector dominating the economy and society [5, 1]. The other extreme would be zero government involvement, however, even the most liberal states intervene in certain ways in the operation of business and the third sector [4, 2]. The state forms the conditions of social enterprises on one hand indirectly through its regulatory, consumer-customer and funding activities impacting the characteristics and institutionalization of business sector and civil society, and on the other hand directly with its own services [6]. Besides the role of the state, the market, civil society and international aid are the other important factors influencing the development of social enterprises.

Through our research entitled “Solidarity and social economy of post-socialist peripheries” supported by the Hungarian National Research, Development and Innovation Office (contract number K112928), we test twelve hypotheses connected to the the state, the market, civil society and international aid both in Hungary based on literature review, document analysis and a survey conducted among social enterprises (30 questionnaires as part of the ICSEM project and 12 case studies); as well as at the international level by reviewing relevant literature, interviewing experts and social entrepreneurs in four countries (Poland, Czech Republic, Slovenia, Lithuania); and organizing a workshop/focus group discussion with international experts for the spring of 2017. As the research is still ongoing, in the present paper we will be outlining our findings so far based on literature review and the international workshop, and point to the directions of our further investigation.

Based on our research so far, the most important feature of the social economy in European post-socialist countries highlighted here is (1) the powerful, but controversial role of the state. Some other important elements are: (2) individualism, consumerism, the promotion of market-economy and the limited use of community solutions in the economy, (3) paternalism and democratic deficit; (4) growing social problems and widening regional differences; and (5) pressure to meet external expectations mostly connected to the EU. In the present paper we examine the social, economic and cultural conditions of social enterprises in post-socialist states by discussing the above mentioned issues.

The investigated era cannot be regarded as uniform. Neo-liberal characteristics following the collapse of state socialism, the European Union accession process, and currently the emergence of more centralized tendencies came from different views on society and resulted in different public policies and different conditions for the social economy. These differences can be seen e.g. in changes in privatization vs. nationalization; relations towards business and civil society; directions in fiscal policy, ways to deal with poverty, regional disparities and unemployment, compliance with European Union standards and various governance techniques.

As a result of these processes indicated, accompanied by a relevant role of the state, a specific type of social economy and social enterprise sector has been created. Based on our research, we can point out certain post-socialist characteristics influential in the late development, number, activities and financial situation of social enterprises. However, to explore how these post-socialist characteristics appear in the researched countries specifically and especially how they influence the management, daily work and in particular the social impact of social enterprises requires further research.