Social Enterprise in Central and Eastern Europe

Theory, Models and Practice

Jacques Defourny, Marthe Nyssens

• Publisher: Routledge
• Year: 2021
• ISBN:
  9781000367225
• Edition: 1
• Topic: Negocios y empresa
• Subtopic: Emprendimiento

In the last two decades, the quest for a widely accepted definition of social enterprise has been a central issue in a great number of publications.

The main objective of the ICSEM Project (on which this book is based) was to show that the social enterprise field would benefit much more from linking conceptualisation efforts to the huge diversity of social enterprises than from an additional and ambitious attempt at providing an encompassing definition. Starting from a hypothesis that could be termed "the impossibility of a unified definition", the ICSEM research strategy relied on bottom-up approaches to capture the social enterprise phenomenon in its local and national contexts. This strategy made it possible to take into account and give legitimacy to locally embedded approaches, while simultaneously allowing for the identification of major social enterprise models to delineate the field on common grounds at the international level.

Social Enterprise in Central and Eastern Europe – the last volume in a series of four ICSEM-based books on social enterprise worldwide — will serve as a key reference and resource for teachers, researchers, students, experts, policy makers, journalists and others who want to acquire a broad understanding of the social enterprise and social entrepreneurship phenomena as they emerge and develop in this region.

Part I

National Overviews of Social Enterprise

1 Social Enterprises in Bulgaria

Historical and Institutional Perspective

Tsvetelina Marinova and Elizabeth Yoneva

DOI: 10.4324/9780429324529-3

Introduction

In the last decade, the development of the social economy and social enterprise (SE) has drawn the attention of policymakers, scholars and large groups of people in Bulgaria. Various domestic and international factors have fostered their growth. As regards domestic factors, the transition to a market economy, during the 1990s, has been characterised by the emergence and deepening of a great number of negative economic and social processes and trends. The 1996/1997 crisis led to a radical restructuring of the economy; this was followed by an orthodox monetary and conservative budget policy, under a currency board system. The monetary regime that was implemented imposed significant restrictions on many public policies and further limited the role of the state in providing social care, assistance and services to the people in need. The weakness of the welfare state, in combination with rising poverty, inequality and social exclusion among the population, led to a fast growth in the number of vulnerable people. As a result, many social initiatives and organisations have appeared; they aim to contribute to solving some of the key socio-economic problems.

From the perspective of international influence, the most important driver of the SE sector’s development has been the integration into the European Union (EU) in 2007. Bulgaria has made a commitment to achieve EU priorities and goals in this field, and the EU’s policies and measures to promote social entrepreneurship and social enterprise have been taken into consideration in the design of a national policy. We argue that the Bulgarian government has acknowledged the role that social enterprise can play in the economy and in catching up with other more developed European countries.

This chapter aims to study social enterprise in Bulgaria in a historical and institutional perspective. The first part deals with the emergence and historical evolution of social institutions and social enterprises in Bulgaria. In the second part, we focus on public policy in the field of the social economy and social enterprise. The main features of Bulgarian SE models are outlined in the third section.

1. Genesis and Evolution of Social Institutions and Social Enterprises in Bulgaria

A historical overview of the evolution of social institutions and social enterprises in Bulgaria bears testimony to their century-long existence in the country.¹ In such a historical perspective, we distinguish three major types of social institutions and social enterprises in the country; these are described in the following paragraphs. The social institutions presented later can be considered as the forerunners of social enterprises.

1.1. Charitable Activities of the Church

In the Bulgarian territories of the Ottoman Empire, the churches and monasteries developed as social institutions committed to charity and mutual aid. After the Liberation of the country, the first charitable activities of the Bulgarian Orthodox Church (the Bulgarian Exarchate, established in 1870) developed in response to the needs of the poorest people. Later, in 1934, the Law on Public Assistance for Social and Charitable Activities was passed. Until 1944, the church made remarkable achievements in the field of orphanages, rest homes and summer camps, but with the imposition of the communist regime, in 1944, the charitable work of the church was ruined and its property confiscated or destroyed (Lyubenova 2014).

Many charity activities were also based on private initiatives by wealthy people and influential elites’ representatives, who funded different social causes and projects. These initiatives proliferated especially during the Bulgarian National Revival.²

1.2. Voluntary Organisations

Many voluntary organisations appeared after the Liberation. The first Red Cross societies emerged in 1878, and the National Red Cross Organisation was created in 1885. They performed a wide variety of social activities to help sick people, injured men and refugees, especially during the wars. But in the period spanning from the 19th century, when Bulgaria was still under Ottoman rule, to World War II, the most important social institutions in Bulgaria were the so-called chitalishta³ and the cooperatives (analysed in Section 1.3).

Chitalishta are community centres, engaged in charity and volunteer programmes. They fulfil educational, cultural and art-related functions. These institutions have an autonomous governance and a unique self-support and funding system.

The first chitalishte emerged in January 1856 in Svishtov (Velikov and Zhechev 1987). Chitalishta played a crucial role in the socio-political upbringing of the Bulgarians during the Ottoman period. They also acted as an effective tool for the social and cultural integration of Bulgaria at the international level, facilitating the transfer and the adoption of modern ideas and practices from other European countries. After the Liberation, chitalishta continued to deliver social services to local communities. In 1945, the first legal act on chitalishta was adopted, and the state played an important role in their development until the collapse of socialism, in 1989.

The Chitalishta Act of 1996⁴ stipulates that chitalishta are non-governmental self-regulatory organisations. According to the National Register of Chitalishta, as of June 2018, there were 3,668 chitalishta in Bulgaria.⁵ Developed within a local context, established by and for the communities themselves, chitalishta combine their social goals with an entrepreneurial component.

1.3. Cooperatives

Cooperatives (particularly agricultural credit cooperatives and popular banks) played an important role in the economic development of Bulgaria from the beginning of the 20th century to the Second World War. We distinguish three major periods in the development of cooperatives in the country.

From the Liberation to World War II

The first period, from the Liberation to World War II, was marked by the emergence, rapid dissemination and strong acknowledgement of the role and importance of cooperatives by the Bulgarian population and national authorities. Bulgaria developed as an agrarian country in which the major part of the active population (about 80%) was engaged in agriculture. The backwardness of the Bulgarian villages and the poverty and misery of the farmers created favourable conditions for the expansion of agricultural cooperatives and their transformation into multi-service organisations.

Cooperatives emerged as a social institution based on the principles of voluntary membership, solidarity, democratic decision-making and autonomous governance. Their emergence was related to the forms of mutual aid and solidarity that had existed among Bulgarians ever since the Ottoman period and had persisted until the Liberation, and it can also be linked to a strong European influence (transfer of the practice of Raiffeisen savings and credit cooperatives).

During the Ottoman period, the oldest known associations of collective labour in agriculture (zadruga) appeared spontaneously and spread in the Bulgarian and many other Balkan territories of the empire. The zadruga was an informal institution, a form of cooperative within a barter economy, based on family customs and values (Iorga 1929; Laveleye 1888; Novakovitch 1905).

The first formal social institutions in the Bulgarian territories of the Ottoman empire were the credit funds of public utility, established by the Turkish authorities in the period 1864–1868. They aimed at providing cheap and accessible credit to farmers to combat poverty and widespread usury. These funds also financed public projects in the Ottoman empire (Atanasov 2017; Bakardzhieva 2009).

In the Bulgarian territories, the Turkish authorities also developed a social policy for orphans and widows by establishing special funds (sirotski kasi), through which savings and donations were collected to support them.

As regards the social institutions in the cities, during the Ottoman period, the main forms of collective labour in the towns were guilds called esnafi. The esnafi was a social and economic craftsmen association representing a specific craft. Esnafi existed in the 18th and 19th centuries and gained official recognition by virtue of a sultan’s firman in 1773; they organised the delivery of raw materials or the resale of goods with a view to supporting the competitiveness of Bulgarian producers.

Urban mutual credit associations were the predecessors of savings and credit cooperatives in the cities before the Liberation. The first urban mutual credit association was founded in 1871.

After the Liberation, Bulgarian authorities acknowledged the significant role of agricultural credit for the country’s development and decided to maintain the main functions of the existing state-owned credit funds of public utility while transforming them, in 1878–1879, into agricultural funds. In the absence of private banking institutions, agricultural funds became the only savings and credit institutions in the countryside; they operated in a context marked by peasants’ growing indebtedness and need of capital. They also extended their offer of loan services to agricultural cooperatives.

In 1903, the Bulgarian Agricultural Bank (BAB) was established as the only state-owned bank supplying farmers with cheap and accessible loans through local support to cooperatives. Then, in 1910, a second state cooperative bank—the Bulgarian Central Cooperative Bank—was established to promote different types of cooperatives by providing them with loans and to attract their savings. These two state cooperative banks became (and remained until World War II) the biggest creditors of the cooperative sector in Bulgaria (Marinova and Nenovsky 2017a).

The first agricultural credit cooperative, “Oralo”, was established in 1890. It was the first cooperative not only in Bulgaria—but also in the Balkans—based on the principles of Raiffeisen savings and credit cooperatives.

In the course of time, agricultural credit cooperatives developed into multi-service cooperatives, as their lending activities were complemented by other activities, such as the sale of consumer goods and farming machinery, the manufacturing of materials and the sale of farm produce. These cooperatives engaged in cultural and educational activities among the rural population (Tsentralen kooperativen sayuz 1986a, 1986b).

It is noteworthy that the Bulgarian cooperative movement developed in the framework of the first Cooperative Law (1907)⁶, which was based on most of the modern European legislation and practices at that time, namely the German and Hungarian cooperative laws. The implementation of the law contributed to the boom of the cooperative movement in the c...

Table of contents

• Cover
• Half Title Page
• Series Page
• Title Page
• Copyright Page
• Contents
• Preface and Acknowledgements
• About the Editors and Contributors
• Introduction: Documenting, Theorising, Mapping and Testing the Plurality of SE Models in Central and Eastern Europe
• Part I National Overviews of Social Enterprise
• Part II Comparative Analyses and Perspectives
• Index