Abstract

Agricultural cooperatives emerge as tools through which individual farmers meet their economic and social needs and they do so in a manner that allows them both to economize on costs and to disperse the risks associated with pursuing these needs individually. They are particularly useful for enhancing economic development of transition countries in which basic market economy infrastructure is either underdeveloped or is altogether missing. However, agricultural cooperatives do not always deliver the desired level of rural development. Although the literature sometimes takes this to mean that the model itself is defective, I argue to the contrary. In this thesis, I propose that it is the evolutionary path of cooperative idea, its implementation in reality and the way in which it interacts with its institutional surroundings that condition the ability of the model to perform. In other words, cooperative idea is not immune to its political and economic context but rather it is molded by it, and sometimes to the point that it no longer resembles its original substance. In line with that, the main objective of this thesis is to look into factors that either stimulate or discourage development and functioning of agricultural cooperatives in a context of post-socialist and post-conflict Bosnia and Herzegovina (BiH). In doing so, the thesis adopts a new institutionalist frame of analysis combining it with the insights from the economics of the third sector and the cooperative theory to highlight both the evolutionary nature of cooperative idea as well as its embeddedness in the socio-economic context. The research relied on quantitative and qualitative approaches and gathered data from field work and secondary sources. The main findings can be summarized in the following several points: both formal and informal institutions have shaped the way in which cooperatives are understood and utilized by farmers in BiH; cooperatives in post-socialist and post-conflict settings require legal clarity that not only sets them apart from other types of firms in the market but also from degenerated forms of cooperatives that exist to serve interests of few individuals rather than cooperative members and their communities; when judged by the standards that apply to cooperatives in economically advanced societies, it is safe to state that there are very few true cooperatives in BiH; given the structure of agricultural market and number of farmers, there is a lot of potential in utilizing the cooperative model for purposes of rural development. However, using cooperatives for development purposes requires a basic alignment between the features of institutional environment and cooperative organizational characteristics. If stimulated properly through positive policy changes, cooperatives can exhibit transformative potential that is best reflected in how they empower their patrons as well as contribute to the development of their communities.