Rethinking social enterprise policy making in Ireland – untangling proportionate, disproportionate and unengaged sectoral policy contributions

Although the vocabulary is relatively new, social economy enterprises have been well established in Ireland for more than a century. Their development has been an integral part of Ireland’s modern social and economic history. The co-operative movement has a long and established presence (Doyle, 2019) and has contributed to the wellbeing and economic growth of rural Ireland while the Raiffiessen Banks (Colvin and McLaughlin, 2014), and the more recently established credit unions, have played a vital role in meeting socio-economic needs over the years (Power et al., 2012). In Ireland, these collective enterprises, whatever their legal status or form, are recognized as economic actors alongside the private and public sectors. One of the more interesting distinguishing features of the social economy in Ireland was, until recently at least, the absence of a discrete co-ordinated policy framework. Distinct elements of the social economy operated under a range of statutory and policy frameworks, with a variety of government departments having responsibility. For example, credit unions fell under the remit of the Department of Finance¹, social finance providers under the remit of the Department of Social Protection², co-operatives under the Department of Enterprise, Trade and Employment³, and the non-legal status and legal form aspects of social enterprises fell under the remit of the Department of Rural and Community Development⁴. In addition, the Department of Justice has been a key policy stakeholder, having been the first government department to launch a social enterprise strategy⁵.

It is arguable that the interaction of strong interest-based advocacy with a policy system, which was still migrating from a social partnership/corporatist model of policy advocacy to a more pluralist model, was a factor in the emergence of an unusual combination of stakeholders to influence the policy formulation process at critical junctures. Other factors in this regard were: the relatively long delay in devising policy, largely the result of the division of policy responsibilities for the social economy between a number of government departments; the transfer of policy responsibility for the discrete social enterprise area to a number of departments in a short time span (2011-2017); and the relative weakness in policy development capacity of the final policy-owning government department. Furthermore, a significant element of the stakeholder influence originated from groups representative of distinct sub-sectors of the broader social enterprise/social economy enterprise sector, or representative of distinct sectoral support functions, e.g., social finance and enterprise centres, rather than from more broadly representative sectoral groups or mainstream social economy-oriented stakeholders, such as the credit union and co-operative representative bodies. In addition, the larger components of the social enterprise/social economy enterprise sector, e.g., organisations funded by the state’s Community Services Programmes, Work Integration Social Enterprises (WISE), and other community-based social service providers, such as childcare, remained largely unengaged in the policy formulation process, or had their views filtered through much broader community and voluntary sector policy advocacy mechanisms. This was a complex and fluid environment in which various stakeholders articulated and advocated for their policy positions. It is important to consider it, and to detail how the relevant policy institutions engaged with, and were influenced by, those stakeholders.

The primary aim of this article is to examine the development and implementation of the National Social Enterprise Policy in Ireland. In particular, it explores the interaction between key sectoral stakeholders in the development of the policy and the primary influences on the process. It focuses on the engagement of key stakeholders at different stages of the public policy cycle: (a) agenda setting, (b) policy formulation, (c) legitimation, (d) implementation, (e) evaluation, and (f) policy maintenance, succession or termination (Knill and Tosun, 2012). The article sets the context for the development of the National Social Enterprise Policy and highlights the fact that in “recent years several European Union institutions have called for public policies to boost the social economy at European, national and regional level” (Chaves and Monzón, 2019: 7). The European Council’s conclusions on The promotion of the social economy as a key driver of economic and social development in Europe, published on 7^th December 2015, was a major statement in this regard. This, and similar developments, reflect the fact that the social economy is finding its place as a constituent component of the European approach to sustainable socioeconomic development.

The article is presented in a series of sections. Section one (above) has laid out the context. Section two (which follows) details the research methodology adopted and the key constraints. Section three outlines the theoretical framework adopted for the analysis (Van den Heijden and Kuhlmann, 2018) and section four outlines different national approaches to the development of social enterprise policy. Section five details the research findings and highlights the complex set of relationships underpinning the development of social enterprise policy in a multi-level governance framework. It situates the National Social Enterprise Policy in an environment unusually susceptible to sub-sectoral advocacy. It presents the particular characteristics of the Irish social enterprise policy, including the fact that it is largely removed from broader social economy policy interventions, and considers the critical importance of the stage in the policy cycle where influence or advocacy is exerted. Section six discusses the implications of the findings, in particular the interaction of interest-based advocacy (Murphy, 2018) within a changing, under-resourced and weakly developed policy system (as described above). The article concludes with recommendations for future research, with a focus on the policy implementation phase, to complement existing studies on social enterprise policy making.

The methodology employed in the study that forms the basis of this article involved primary and documentary research. In relation to the former, qualitative methods of enquiry were employed to facilitate informants to share their knowledge in a flexible manner, during the data collection phase (Bryman, 2004). Semi-structured interviews were conducted with 18 interviewees, as they allowed for flexibility (Creswell, 2014). The authors reviewed the questions to ensure that they were valid and framed correctly, and they were then piloted with two individuals. There were no adjustments to the instrument, or research design, arising from the piloting of the questions. While face-to-face interviews are considered advantageous, since they enable the interviewer to establish a relationship with the interviewee (Leedy and Ormrod, 2015), it is recognised that, when face-to-face is not possible (for example, when the interviewees reside in different parts of a country), telephone or virtual interviews present a practical alternative (Hine, 2012). In the case of the interviews for this research, it was necessary to conduct them online, due to the combination of time constraints and Covid-19 restrictions.

Interviews typically took between 45 minutes and one hour. A list of trigger questions was used to guide the interviews, and some additional questions were then posed, depending on each interviewee’s responses. They were held in two distinct rounds. The first round of interviews was conducted with previously identified key stakeholders. Interviewees for the subsequent round were identified through analysis of the first round of interviews. The interviewees included government ministers, senior civil and public servants, social enterprise representatives, social finance representatives, and civil society representatives.

The majority of the interviewees wished to remain anonymous and, therefore, a series of interviewee identifiers was devised, consisting of a category and a number. The categories are: State - civil/public servant; Civil - civil society organisations, including social enterprises and social finance providers; and Elected - elected representative including TDs and minsters. A number was then attributed to each participant in a given category (see table below).

All interviews were audio-recorded and transcribed verbatim. The researchers had also intended to conduct focus groups with key individuals from community and voluntary sector organisations and state agencies, alongside the interviews. However, unfortunately, this became impossible to organise due to time constraints. This was potentially a shortcoming as focus groups provide researchers with the opportunity to gain the views of individuals collectively on phenomenon (Bryman, 2004). Moreover, this method provides individuals with a greater level of ‘ownership’ of the process, than do individual interviews (Creswell, 2014).

Qualitative thematic analysis was employed to analyse the data gathered. This process was an inductive one, with the themes developed from the transcripts. It entailed reading each of the transcripts a number of times to become familiar with the data. The text of each of the transcripts was then coded, and sub-themes developed from groups of related codes (Braun and Clarke, 2006). In turn, these sub-themes were combined into themes. After a number of interviews were completed, the analytical process allowed for the refinement of the number of codes developed. Table 2 below illustrates how codes relate to themes.

The documentary research undertaken involved the identification and compilation of an Irish social enterprise policy corpus, to explore and describe the broad features of the social enterprise policy cycle. This was constructed from publicly accessible documentation. Previous studies, for example Mason and Moran (2018), have tended to include documentation from a “relevant institutional context”, i.e., documents produced by, or linked to government that “did not include independent documents produced by interest groups or civil society actors that made it into official communications channels such as government websites” (Mason et al., 2021: 36). This is problematic in the case of Ireland as documentation from the relevant institutional context is very limited. For this reason, it was agreed that the Irish social enterprise policy corpus would include documentation produced and disseminated by interest groups and civil society organisations. Table 3, below, lists all the documents accessed.

The documentary analysis process involved an initial examination of a number of documents. Depending on their relevance, some were discarded, while others were examined more thoroughly. The next stage involved interpretation of the documents, which was done through an iterative process, combining content analysis and thematic analysis. The content analysis involved collating the information into categories, after which thematic analysis was employed to code and generate themes from the data contained within the various categories (Creswell, 2014).

There are a variety of distinct theoretical perspectives to explain why governments “institute, modify and terminate” public policies (Knill and Tosun, 2012: 69). Structure-based models, institutional-based models, and interest-based models have tended to dominate the literature. Although sharing a common assumption, namely that institutions do matter, there are within institutional-based models a variety of conceptions of how, why, and to what extent institutions make a difference (Knill, 2001). For the purposes of this article particular attention is paid to the historical institutionalist approach.

Historical institutionalism is grounded in comparative politics and is often applied to analyse public policy choices. The approach is broadly agreed to contain a number of key features (Royles and Lewis, 2019), though there are differences in emphases among authors. One central feature is the theoretical importance of institutions, to the extent that they can be considered as the key independent variable that affects outcomes and behaviour. In defining institutions, this article emphasises their formal aspects, in contrast to perspectives stressing their informal features (Hall and Taylor, 1996). It adopts a view of institutions as “formal organizations, rules and procedures” (Lecours, 2000: 513), such as relations among different branches of government, state-interest group relations, and policy networks that structure the political process (Immergut, 1998: 17). Institutions can be understood as both the formal and informal rules, the norms, and the precedents that organise the social, political, and economic relations, which structure political behaviour and which, as a consequence, can favour some outcomes over others (North, 1990) and have a “significant influence on the emergence and implementation of social initiatives” (Petrella et al., 2021: 273).

The second key feature of historical institutionalism relates to its approach to the relationship between structure and agency. Within this perspective, institutions can condition both the likelihood of agency activity, and the nature, forms and intensity of their activity. Lecours recognises the importance of agency and stresses the agency-structure dynamic of historical institutionalism as “the interactions between actors and institutions, focusing not only on actors, but also on how institutions are shaped and re-shaped by these actors” (2000: 516). As Farrell argues “actors use the opportunities that institutions provide them, but potentially change those institutions as a result of those actions” (2018: 24).

For the purposes of this article, the last pertinent feature of historical institutionalism is the importance of historical context when analysing institutional behaviour and institutional change, in particular, the concept of ‘path dependence’. Path dependence holds that institutionalised commitments, in the formative period of an institution or policy cycle, can strongly influence subsequent decisions (Peters, 2012). Path dependence dynamics “establish a trajectory that remains an enduring influence and constrains the scope for diversion from a set policy direction” (Royles and Lewis 2019: 710). This path can be disrupted by the intervention of significant forces and these episodes of ‘critical junctures’ can best be understood as crucial moments of institutional change, that can spur alternative developmental paths (Thelen, 1999). In addition to such critical junctures, historical institutionalism also provides for greater recognition of the potential for more gradual policy and institutional adaptation, as a result of internal and external forces (Peters, 2012).

Applying this historical institutionalist model, the article focuses on the role of a small number of government departments including, a newly established government department, the Department of Rural and Community Development. These will be considered as the key policy-formulating institutions and processes, and their engagement with a relatively limited number of civil society organisations, some more well-established and experienced than others, will be examined.

Governments around the world have been encountering “numerous unstructured, crosscutting, and complex policy challenges” (Choi et al., 2020: 494). Over the past three decades, social enterprise has been utilised by a number of governments as a solution to these challenges. Perceived to be situated at the nexus of government, market, and civil society, social enterprises are claimed to have the potential to solve intractable problems by pursuing both social purpose and economic profit, based on cross-sectional collaboration (Defourny and Nyssens, 2017; Nyssens, 2007). In this context, social enterprises have promoted the employment of the hard-to-employ (O’Hara and O’Shaughnessy, 2021); addressed sustainable economic development in rural areas (Steiner and Teasdale, 2019); developed local communities by supporting local entrepreneurs (O’Hara, 2001), and distributing surplus funds back to the community (Guinan and O’Neill, 2020). While relatively recent arrivals on the policy agenda, social enterprises as policy initiatives, have been quite widely studied, and governments have developed and implemented social enterprise policies in a number of distinct ways.

A variety of studies have shown that social enterprise manifests differently in different policy ecosystems and exhibits “characteristics that reflect the institutional, political, economic, social and, sometimes, geographic context in which they emerge” (Mason et al., 2021: 28). These studies postulate that ideas are a key factor in shaping social enterprise development. In countries that have strong social democratic traditions, social enterprise draws on ideological cooperative traditions (Defourney and Nyssens 2010; Petrella et al., 2021), while countries with more ‘liberal’ traditions are more likely to be influenced by market ideologies (Mason and Moran, 2018). This makes Ireland an interesting case. While its strong cooperative tradition is less widespread now than previously, it has retained a very vibrant credit union, i.e., financial cooperative, sector. At the same time, domestic policy discourse has been strongly influenced, if not shaped, by international neo-liberal ideas, though possibly not to the extent that many commentators suggest (Smith, 2005; Kirby, 2010).

The changes in the Irish context are also reflected elsewhere. There is considerable evidence (Karré, 2021) that a number of distinct dynamics have been taking place in countries that heretofore had, what were considered, strongly social democratic traditions, e.g., Belgium, Germany and the Netherlands. Such dynamics include: (a)

A process of “hybridization, whereby organisations that were initially independent from the state, e.g., co-operatives, are increasingly linked to the state” as they are now partially, or completely, funded by the state, or one its arms to deliver services or “deal with public issues that traditionally fall under its purview” (Karré, 2021: 292).

Both dynamics, particularly the emergence of new-style social enterprises, are clearly visible in Ireland. What is different is that the co-operative and credit union sectors in Ireland, which might be perceived as more social economy-oriented organisations, don’t appear to have engaged with the social enterprise policy ecosystem as they have done in the case of France, Portugal and Spain. This was despite requests from other stakeholders (Civil - 1).

Looking at the picture more broadly, recent research by the European Commission (see table below) analyses four main types of welfare systems and their role in terms of “boosting social enterprise development” (2020: 46).

While that research places Ireland in a distinct ‘box’ with a number of other countries, this article will demonstrate that this is not the complete picture, and that the drivers of social enterprise development, including the formulation and implementation of a national social enterprise policy, are more complex than heretofore understood.

In the section to follow, we present findings that relate to the development and implementation of the National Social Enterprise Policy in Ireland, the interaction between key sectoral stakeholders in the development of the policy and the primary influences on the process. The findings are presented in a number of distinct sub-sections, linked to the themes identified in Table 2. They address issues relating to the nature of the policy cycle in Ireland, i.e., its duration, and phases in the formulation process. The sub-sections are presented in chronological order and each sub-section addresses a discrete period (where useful) in the lead up to the development of the National Social Enterprise Policy and its subsequent implementation. They reveal a complex and sophisticated engagement by a number of key stakeholders with policy-makers over a prolonged period, and the critical role played by institutions, their ability to shape and direct policy development processes, and also the extent to which they are, in turn, influenced by their engagement with other stakeholders (Duina, 2011).

The first sub-section, ‘Setting the agenda’, describes the catalysts for the development of a national social enterprise policy, the ambit of the policy and its primary influences. It primarily deals with the period from the mid-1990s to 2012. The second sub-section, ‘Policy-making in distinct phases’, provides a high-level overview of the period 2012-2019 and highlights the prolonged duration of policy advocacy by a number of stakeholders. It also addresses the questionable assumption that there is a “chronological order in which intentions precede action, a linear causal logic whereby goals determine instruments and instruments determine results, and there is a hierarchy within which policy formation is more important that policy implementation” (Hill and Hupe, 2015: 1). The third subsection, ‘Grant hunters and messers’, presents the negative views of many within the policy-owning departments on social enterprise. They perceived it as, in essence, a code for continuing and developing a culture of grant dependency, they queried the capacity of social enterprises to deliver any meaningful output and they expressed concern that social enterprises would, in some way, displace ‘real’ businesses. The sub-section primarily deals with the period 2011-2016. ‘Public policy, Brexit and the European social economy agenda’ finds that the choice of a successful model, as a basis for Ireland’s inaugural national social enterprise strategy, in the aftermath of Brexit, was more contested than heretofore appreciated (2018-2019). The final sub-section, ‘The old regime fights back’, focuses primarily on the early stages of the implementation phase of the National Social Enterprise Policy (2019). It finds a key conflict between the stakeholders, who were strongly vested in social partnership-type policy advocacy, and a policy making system, that was creating more pluralist policy advocacy mechanisms.

Over the past century social enterprises, particularly co-operatives, have made a significant contribution to alleviating many economic and social crises, which Irish society has encountered. For example, producer cooperatives have enabled farmers to gain a superior price for their produce, by eliminating the middlemen from the process (Tucker, 1983), while the credit union movement enabled thousands of families’ to gain access to affordable credit (Quinn, 1999). Furthermore, since the 1890s social enterprises, particularly co-operatives, have transformed rural economies (Doyle, 2019). In Italy, Spain and the Canadian province of Quebec, co-operatives have made an enormous contribution to the development of vibrant endogenous economies, both rural and urban. These cases serve to highlight the potential that co-operatives can make (Mendell, 2010; Restakis, 2010).

This review of Ireland’s experience of developing a social enterprise policy has identified a number of significant challenges to the success of the process. These include: (a) the reluctance of the designated policy-owning department to retain ownership of the policy; (b) the limited understanding among civil servants of the importance and potential of the social economy; (c) the episodic character of the policy process itself; (d) the relatively narrow role of stakeholders in general and, relatedly, the outsized influence of a very small sub-section of stakeholders; and (e) the absence of the largest stakeholders in the social economy, i.e., co-operatives and credit unions, from the process. In combination, these factors have provided the social enterprise policy that emerged with a distinctive personality.

Recognising the negative impact of these challenges, it is suggested that, in the future, Ireland’s social enterprise policy formulation processes should focus more on policy in jurisdictions, such as those mentioned above, and fellow EU member states. In addition, the definition of social enterprise, contained in Ireland’s social enterprise policy, should be broadened to include co-operatives¹⁵. Failure to do this will be a missed opportunity for supporting the social enterprise contribution to the development of vibrant sustainable economies (Doyle, 2019). Furthermore, national and international, academic, peer-reviewed research presents strong evidence of the effectiveness of social enterprises at addressing societal issues, such as fossil fuel dependence.

Happily, there has been some movement in this regard, and in 2021 the Department of Environment, Climate and Communications announced significant support for community-based energy production (Government of Ireland, 2021). However, the key elements of this initiative, including considerable support for community-based energy co-operatives, appear to remain outside of the remit of the National Social Enterprise Policy 2019-2022. Arguably, this is a critical omission in the development of a national social enterprise policy in Ireland. Indeed, it is not a national social economy policy. This may appear, at first glance, to be a harsh criticism. But, at a time when the EU is strongly advocating the efficacy of a whole of social economy approach, Ireland has adopted a much narrower social enterprise policy approach.

The governance structure responsible for monitoring the implementation of Ireland’s next social enterprise, or social economy, strategy, might be comprised of representatives of social enterprise networks and different categories of social enterprises, including co-operatives, credit unions, WISEs, circular economy-focused social enterprises, support agencies and academics from higher education institutions. The terms of reference for membership of that governance structure could require evidence of accountability to their respective network or nominating body.

Experience from Canada, and from Italy, Spain and other EU member states demonstrates the critical role that civil society organisations perform in the development of the social economy. Accordingly, the next iteration of the national social enterprise, or social economy, policy should encourage civil society organisations, particularly those with an anti-poverty focus and the trade union movement, to advocate and support the development of the social economy in Ireland.

A wide variety of views were expressed by those interviewed for this research as to which Department should lead the implementation of the next social enterprise policy. Some believed that the Department of Enterprise, Trade and Employment should perform this role while others asserted that that the status quo should remain. Irrespective of which option is chosen, the Department should widen its enterprise brief, to include supporting the development of social economy enterprise development. Future Programmes for Government should prioritise this.

This article argues that a number of distinct issues allowed an unusual combination of stakeholders to influence the social enterprise policy formulation process at critical junctures, and to shape the final policy. These include: (a)

The interaction of strong interest-based advocacy with a policy system, still migrating from a social partnership/corporatist model of policy advocacy, to a more pluralist model.

The article’s findings contribute to the emerging literature on social enterprise policy and to a better understanding of the role of institutions. It is widely acknowledged that the development of a national social enterprise policy is a significant milestone, and provides a strong foundation for the next iteration of the policy. The article highlights the distinctive nature of the policy process and the role key stakeholders played in its development. It also outlines the context-specific challenges, for example the near complete collapse of the corporatist ‘social partnership’ process, and the partial emergence of a more pluralist advocacy process. It details the factors that gave the policy process, and the subsequent policy, its particular quality, they being: the concurrent creation of a new government department, the divided nature and subsequent changes in policy ownership by a number of departments, Brexit, and the ongoing fiscal challenges facing the state.

To summarise, the article highlights the complex and fluid environment in which various stakeholders articulated and advocated for their policy positions. It demonstrates how the relevant policy institutions engaged with, and were influenced by, stakeholders. It contributes to the literature on social enterprise policy and to the thinking on how the policy formulation process can become more inclusive. However further research is required to contribute to understanding of other key factors, including the institutional influences of the British-Irish Council and the competing policy imperatives of the EU, the perspectives of the co-operative and credit union movements in Ireland, and implications for policy makers of the EU’s Circular Economy and European Green Deal initiatives.