The institution of co-operation: A pathway from governance to spillover and poverty reduction

• I discuss the existence and emergence of an institution of co-operation.
• I discuss a balance in co-operative governance relationships and processes.
• A balance in co-operative governance can generate spillover which reduces poverty.
• Member entry and exit to the co-operative is a dynamic process.
• Co-operative governance influences how social capital is used to reduce poverty.

In this article I present a pathway to understand the links between co-operative governance and poverty reduction in developing countries. This unpacks the relationships between the different internal and external actors in co-operative governance, and the different processes (or areas of activity that the co-operative is engaged in). I examine how a balance can be achieved in the relationships, and how this can then affect the balance in the economic and social goals of the process areas, all of which can lead to a spillover effect impacting poverty. I also discuss social capital, and its place within co-operative governance. I explore how the relationships and processes influence the building and deployment of social capital by co-operatives to impact poverty at the household and village levels. I conclude by pointing to the importance of now operationalising the theories behind the pathway from co-operative governance to spillover, in order to fully understand its relevance for poverty reduction.