The role of cooperatives in enhancing social and economic inclusion: determinants of turnover growth and survival under COVID-19

Najat El Mekkaoui, Sara Loukili

The social and solidarity economy, through cooperative structures, has been promoted for its potential to reduce poverty, enhance economic inclusion and provide alternative solutions to labour market issues in developing countries. Nevertheless, very few empirical evaluations of their impact exist. We build an original qualitative and quantitative survey on the population of cooperatives in different sectors in Morocco and estimate the determining factors of their turnover growth, accounting for sample selection bias, as well as their survival rate. Findings point to the existence of three levels of determinants affecting (i) internal factors, (ii) management (president) and (iii) external factors (legal and market environment). We underline the sector’s fragility, the possibility of the existence of negative signaling, the heterogeneity between actors and outcomes and the weak role played by women in leadership positions.

The Unfinished Business of Stabilisation Programmes: A CGE Model of Egypt

City Eldeep, Chahir Zaki

Several emerging economies have embarked on structural adjustment reform programmes to rectify economic imbalances. Most of these programmes have focussed more on short term oriented stabilisation reforms, which reduce the output gap. Yet longer-term structural policies can boost economic growth through shifting the potential GDP. This paper contributes to the literature in three ways. First, we contrast the effects of stabilisation and allocation policies and to what extent they complement or substitute each other. To do so, we run several alternative scenarios related to stabilisation policies (currency devaluation, subsidy removal and VAT tax) and others related to allocation policies (public spending on education and health and improving the competition policy). Second, we analyse how the effects of such policies can differ in the short and long term and with different market structures (perfect vs. imperfect competition). Third, using a recent social accounting matrix (SAM) of 2014/2015, we develop a CGE model for an economy, Egypt, that is under-researched in the CGE literature and that was subject to a recent reform programme developed with the IMF. Our main findings show that stabilisation reforms reduce economic growth by 2.5% in the short run. Yet they positively affect it over time, especially if they are accompanied by structural reforms. Indeed, the latter increase economic growth (of 8.6% in the long run). Furthermore, from a social perspective, stabilisation reform deteriorates household welfare in the short run, especially in urban areas. Finally, we find that negative effects of stabilisation and structural reforms are more pronounced under imperfect competition, pointing to the importance of an effective competition policy.

Social Enterprises and Employment: Case Studies from Egypt

Racha Ramadan

The social economy is considered a key factor in providing employment opportunities and improving living conditions for vulnerable groups. Although there are no official statistics regarding the number of social enterprises in Egypt, the growing number of different actors in the ecosystem, as intermediary support organisations, indicates the prosperity of social economy. Based on eight case studies of social enterprises in Egypt, the discussion in this research shows that social enterprises mostly attract young, educated Egyptians. They operate in different sectors, such as education, the environment and crafts. They generate direct and indirect economic opportunities, mainly for women, young people and informal workers. However, limited access to financial resources and the non-existence of a legal framework for social enterprises are two major barriers to the development of social enterprises in Egypt. These barriers constrain their potential role in facilitating the formalisation of informal employment.

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