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Access_open How to Regulate Cooperatives in the EU?

A Theory of Path Dependency

Journal The Dovenschmidt Quarterly, Issue 4 2014
Keywords cooperative law, company law, EU harmonization, business form, governance
Authors Ger J.H. van der Sangen
AbstractAuthor's information

    In this article, the phenomenon of path dependency has been addressed in view of the harmonization of cooperative law in the EU. The question is raised whether and how the legislative harmonization has an impact on co-operators in their efforts of setting up and maintaining efficient cooperative organizations and whether in this respect the Statute for the European Cooperative Society (hereinafter: SCE) is a helpful tool to facilitate the enhancement of national statutes on cooperatives as well as to provide the legal infrastructure to facilitate cross-border cooperation amongst and reorganizations of cooperatives in the EU.
    The case for the cooperative as a viable business form gained momentum in the EU policy debate with the development of the SCE Statute in 2003, the outbreak of the financial and economic crisis in 2008 and with the endorsement of the cooperative business concept by the United Nations and the International Labour Organization in 2012. If the sound development of cooperatives as an alternative legal business form vis-à-vis investor-owned firms is considered a policy instrument to enhance societal business activities – notably in the field of agriculture and social economy – it raises the question how cooperatives should be regulated to fulfil their function in this respect.
    The key argument presented in this article is that due to strong tendencies of path dependency a top-down approach of EU law-making was and is not a feasible option. The cooperative as a multifaceted institution requires a multifaceted approach taking into account the historical legislative developments of distinctive jurisdictions as well as the historical economic development of cooperative organizations in their specific jurisdiction. However, the existence of path dependency and the lack of regulatory arbitrage as well as regulatory competition prevent the market from generating efficient model statutes for cooperatives taking into account the specific needs of cooperatives and their co-operators.


Ger J.H. van der Sangen
Dr Ger J.H. van der Sangen is Associate Professor Company Law and Securities Law at Tilburg Law School, Department Business Law. He was part of the research team of the EU-funded project Support for Farmers’ Cooperatives. He would like to express his gratitude to all the members of the research team for sharing their insights and discussions during conference meetings in Brussels (November 2011 and 2012) and in Helsinki (June 2012), in particular J. Bijman, C. Gijselinckx, G. Hendrikse, C. Iliopoulos and K. Poppe.
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