Chapter 5 - Why Cooperatives Fail: Case Studies from Europe, Japan, and the United States, 1950–2010

Summary

This chapter determines why cooperatives failed in the period between 1950 and 2010 and analyzes these failures with a view to establishing whether there are rules to which they were subjected. It compares three corresponding cases: the decline of Western European consumer cooperatives between 1960 and 1985; the failure of Japanese credit cooperatives in the 1990s; and the restructuring of American agricultural cooperatives between 1990 and 2010. In the case of Western Europe, the findings suggest that the decline of consumer cooperatives followed closely the hypotheses that have been put forward by the demand school of thought. The cases suggest that there are some common elements. All of the failures were connected to changing economic conditions that may be described as transitions from situations of market failure to competitive environments, often as a consequence of technological and organizational change, but sometimes as a corollary of shrinking markets and deregulation.