Business Cycle, SSE Policy, and Cooperatives: The Case of Ecuador

Abstract

Over the last few decades, the social and solidarity economy (SSE) has undergone complex changes, from being undervalued to being institutionalized as a key sector in the economy. Within this context of change, Ecuador is a remarkable example of a country that has revamped its public policy to situate the SSE in a position of prominence on the national landscape. Using the business cycle theory and based on a model of panel data from 2007–2017, this article attempts to empirically validate that the relationship between the size of Ecuadorian cooperatives, as core businesses of SSE, is coupled with the expansive and destructive economic cycles by adding two more variables: business structure and public policy. From a global perspective, the results confirm a procyclical of the behavior of cooperatives and the positive impact of the new public policy. However, the sectoral and territorial analysis concludes that only production cooperatives in the primary sector have grown in the new institutional framework, and that this growth is concentrated in provinces with a strong cooperative tradition.