The Emilia-Romagna region of Italy, home to such renowned companies as Ferrari and Ducati as well as the world’s oldest university in Bologna, boasts one of the highest living standards in all of the European Union and one of the lowest unemployment rates. It also has the strongest cooperative economy in Europe, with employee co-operatives representing 30% of the GDP and involving 57% of the population.
Employee owned cooperatives are most prevalent in retail, construction, agriculture, housing, manufacturing and social services like care-giving. While the state still serves as regulatory authority and the facilitator of institutional funding, production and distribution of services remains decentralized and market driven. This balance has provided the people of Emilia Romagna with 30% higher per capita income than the rest of Italy, without reliance on corporations that may have otherwise undermined the local economy
This uniquely cooperative based society has come to embody what academics call the Emilian Model, a modern case study of a solidarity economy connected by values of economic democracy, participatory governance, social capital and institutional stability.
The cooperative tradition in the region has been fostered by the predominance of Socialist and Communist party officials in what is called Italy’s “Red Belt”. Cooperatives have also long been encouraged by the Italian government.
Article 45 of the Italian Constitution (1947) states: “The Republic recognizes the social function of cooperation characterized by mutual aid and not private profit. The law promotes and favors the growth of these structures using the most appropriate means and guarantees that their character and purpose will be inspected accordingly.”
Also in the constitution was a provision called Basevi’s Law, which allowed declared cooperatives to transfer their surpluses to a reserve free of corporate tax on the condition that if the coop be dissolved or sold the reserve is dispersed to other cooperative associations, providing development funds for other cooperative initiatives. Additional tax advantages are tied to initiatives like “employment for marginalized” communities.
Kevin Karner, a student at the University of Minnesota researching solidarity economies, was an intern at On The Commons last fall.