The Social Enterprise Movement and the Birth of Hybrid Organisational Forms as Policy Response to the Growing Demand for Firm Altruism

Abstract

AbstractSocial enterprise can be described as a complex and variegated phenomenon marked by different extensions and definitions according to the legal system of reference. This contribution is focused on a specific area of the social enterprise spectrum, that of the hybrid dual-purpose businesses, conceiving social enterprises as private organisations that carry out commercial activities to pursue social and environmental, as well as economic, objectives. In the past few decades, several legal systems have introduced new hybrid entities designed to adequately meet the needs of social entrepreneurs and capable of bringing together social and environmental aims with business approaches. The birth of social enterprise, with the introduction of philanthropic goals into the articles of association’s corporate purpose clause, is particularly difficult to understand through the lenses of the economic analysis of law or the neoclassical economics and its homo economicus paradigm. This study attempts to offer an interpretative key for understanding these hybrid models abandoning the classical homo economicus paradigm to embrace a reading based on behavioural law and economics and the Yale approach to the economic analysis of law, according to which altruism and beneficence should be considered as ends in themselves, as goods desired by people and for which they are willing to pay the price. In this line of reasoning, social enterprises, as a bottom-up phenomenon are the legislator’s policy response to the growing demand for firm altruism emerging from civil society.