The social and solidarity economy has gained significant visibility in recent years, spurred in large part by its critical role in responding to COVID-19 and other crises in ways that build resilience. The values of the social and solidarity economy, notably the primacy of people over capital, along with its declared mission to pursue social objectives, put social impact at the core. It has pioneered many new business models such as fair trade, organic trade, and the circular economy. It also addresses social challenges, from assisting refugees to tackling housing and food security issues. It provides jobs as well as essential goods and services, particularly for disadvantaged individuals.

The OECD has been working for over two decades on policies for the social and solidarity economy (SSE), including in collaboration with the European Union.In 2020, the OECD launched the Global Action “Promoting Social and Solidarity Economy Ecosystems”, funded by the European Union’s Foreign Partnership Instrument, to support its development and internationalisation. The Action has focused on two critical policy levers that can help unlock the potential of the social and solidarity economy, namely legal frameworks and social impact measurement, in addition to other drivers of a strong policy ecosystem. The Action has brought together international peer learning partnerships to share good practices, produce international statistics, and take a deep dive on particular themes (e.g., internationalisation and social procurement) as well as particular groups (such as youth leading social enterprises, women and refugees). Countries targeted by the Action include all EU member states and six non-EU countries (Brazil, Canada, India, Korea, Mexico, the United States).

Legal frameworks for the social and solidarity economy (SEE) exist in countries around the world, with many national and subnational governments in the process of adopting new ones. Many countries have adopted at least one law on specific legal forms of SSE entities (associations, cooperatives, foundations, mutual societies and social enterprises). Other countries have adopted a national framework law on the SSE as a whole (e.g., France, Mexico) or related notions such as the social economy (e.g., Spain, Portugal) or the third sector (e.g., Italy). A number of countries report that they are in the process of drafting or adopting additional laws on specific SSE entities (e.g., India on cooperatives and the Netherlands on social enterprises).

The social and solidarity economy (SSE) has gained global prominence as a driver of job creation and economic activity with social impact. Based on estimates, in the European Union, social and solidarity economy entities employ over 13.6 million people, which is 6.3% of the total workforce (CIRIEC, 2017[1]). In Colombia and Mexico, the SSE accounts for 4% and 3.2% of overall employment respectively (OECD, Forthcoming[2]). In addition to job creation, countries are increasingly recognising the contributions of the SSE to the green and digital transitions and to community building at both the national and subnational level.

This chapter provides guidance as to if, why and when legal frameworks should be developed. It takes into account the maturity of the SSE ecosystem and how legal frameworks can support broader policy objectives such as fostering job creation or tackling informality. The chapter goes on to identify the benefits, boundaries and common characteristics of legal frameworks for SSE development with provides practical insights on how to identify the stakeholders needed to spearhead the legal framework process and distinguish the SSE from other business practices.

This chapter defines the steps needed to navigate through the development phase of legal frameworks for the SSE. It provides guidance on different approaches (statutory, substantial and hybrid) to use when designing framework laws as well as when to introduce or adjust legal frameworks, labels and statuses. Finally, the chapter highlights how best to engage relevant stakeholders to build consensus around a desired legal framework and to leverage complementary policy options in the development phase.

This chapter provides examples and guidance on how to regularly assess the performance of legal frameworks, to see if they have reached their goals and whether social and solidarity economy (SSE) entities comply with their societal objectives. The chapter speaks to the importance of defining a formal evaluation mechanism that includes relevant stakeholders. It touches on the need for criteria to evaluate processes and outcomes, capitalising on regulatory impact analysis (RIA) and international standards to support the evaluation process of legal frameworks for SSE.

This chapter outlines how policy makers can learn from the experiences and lessons of other countries and/or regions. It highlights the potential of mutual learning methods and provides a template for peer-learning partnerships (PLPs) to foster a common ground understanding and facilitate knowledge sharing. Finally, this chapter hints to the power of international fora to raise visibility, understanding and to provide a platform for exchange on the social and solidarity economy (SSE).