Local development and social enterprise – A comparison of contexts in Hungary and (Eastern) Germany

The context for social enterprise is considered to be characteristic in Central and Eastern Europoe (CEE). Here during state socialism civil society was oppressed (Harkai 2006), cooperatives were set up in a top-down logic and... [ view full abstract ]

The context for social enterprise is considered to be characteristic in Central and Eastern Europoe (CEE). Here during state socialism civil society was oppressed (Harkai 2006), cooperatives were set up in a top-down logic and were state-owned lacking a participative nature (Galera 2009). In the same time family and informal economic strategies played an important role in satisfying local needs (Szalai 2002). For example family members, friends or neighbours formed economic self-help groups, so called kalákas in Hungary, where they worked for eachother on a reciprocal basis.

To understand the context for local development in CEE we need to understand the historic legacy. Post-socialist transformations resulted in rising regional inequalities and the peripheralization of most rural areas. As regional inequalities are high in the CEE region social enterprises are expected to provide local development services next to welfare provision as well (UNDP 2008).

Considering social enterprises as bottom-up, not-for-profit initiatives the aim of this paper is to understand the contexts for social enterprises of rural peripheries in Central and Eastern Europe through looking at the case of Hungary and Eastern Germany. The central question therefore is the following:

What is the room for maneuver for social enterprises in the local development of post-socialist rural peripheries?

To understand this question academic papers and policy documents will be reviewed in the following two fields:

1.         The post-socialist evolution of regional inequalities in Hungary and Eastern Germany.

2.         The evolution of local development policy in Hungary and Eastern Germany after the regime changes and the role and conceptualization of "social enterprise" in these policies

The collapse of the socialist heavy industry and the agricultural cooperatives has resulted in mass job losses. The inability to find jobs locally has amplified selective outmigration in rural areas. Even though Hungarian and German employment policy tackled unemployment differently, long-term unemployment has emerged in both countries after the regime changes. Those who could not chose to migrate integrated “living on benefits” into their survival strategies (Nagy et. al. 2015a), as well as informal economic strategies (eg. work in the shadow economy or backyard farming). Due to neglect of rural areas during the post-socialist transformation social enterprises face challenges in these areas, such as long-term unemployment or the reproduction of deep poverty (particularly in Hungary).

“Social enterprise” is conceptualized differently in local development policies of Hungary and Germany. In Hungary, the limitedly autonomous social cooperatives in tight cooperation with local municipalities are considered as one of the main actors of local development. In the same time in German local development policy the usually autonomous civil society organizations are considered as the main actors and CSOs are encouraged with financial instruments as well to build up bottom-up local development projects).

* The research is connected to the “Solidarity and social economy of post-socialist peripheries” supported by the Hungarian National Research, Development and Innovation Office (contract number K112928).

Refrences

Harkai, Nóra (2006): Közösség és közösségi munka. Budapest: VEL Kft.

Galera, Giulia (2009): The ‘Re-Emergence’ of Social Enterprises in CEE and the CIS. In: Marco Musella und Sergio Destefanis (Hg.): Paid and Unpaid Labour in the Social Economy: An International Perspective. Heidelberg: Physica-Verlag HD, 245–262.

Nagy, Erika; Timár, Judit; Nagy, Gábor; Velkey, Gábor (2015): The Everyday Practices of the Reproduction of Peripherality and Marginality in Hungary. In Thilo Lang, Sebastian Henn, Wladimir Sgibnev, Kornelia Ehrlich (Eds.): Understanding Geographies of Polarization and Peripheralization: Perspectives from Central and Eastern Europe and Beyond. London: Palgrave Macmillan UK, pp. 135–155.

Szalai, Júlia 2002. A társadalmi kirekesztődés egyes kérdései az ezredforduló Magyarországán. (Alapkérdések). In Szociológiai szemle - Sociological Bulletin 4, 208–209, checked on 7/15/2016.

UNDP 2008. Social Enterprises: A new model for poverty reduction and employment generation. UNDP Regional Bureau for Europe and the CIS, Bratislava . http://europeandcis.undp.org/h...