3. Evaluate the performance of legal frameworks

Periodically evaluating legal frameworks for the social and solidarity economy (SSE) can support many objectives. It can help to assess how legal frameworks impact activities of SSE entities. It can also help to build the necessary information to support reforms, adaptations and improvements to laws. Despite the widespread adoption of legal frameworks for the SSE, only a handful of countries and regions (e.g Canada (Québec), France, Luxembourg and Mexico) have included formal mechanisms to evaluate their performance. The lack of regular evaluation may prevent countries and regions from timely amending, adapting and evolving legal frameworks thus creating additional barriers relative to other legal forms.

To be useful, evaluation requires a formal mechanism to assess both processes and outcomes. In the area of legal frameworks, the “input-process-output-outcome” approach aims to assist authorities in evaluating each step, from the design and implementation to the achievement of strategic objectives of laws and regulations (OECD, 2014[1]). Processes refer to how legal frameworks are developed and enforced. Outcomes refer to whether legal frameworks have reached their objectives and their potential implications (positive and negative) on ecosystem development. This also helps determine the need for updates or revisions of laws.

This section provides guidance to help countries assess the performance of legal frameworks for the SSE. It outlines possible criteria and tools for evaluating processes and outcomes.

Across countries the following success factors and pitfalls to avoid can help to evaluate the performance of legal frameworks for the SSE.

Countries and regions that evaluate legal frameworks for the SSE have done so by including formal mechanisms in SSE laws themselves. The need for evaluating legal frameworks for the SSE has been expressed by public authorities and SSE entities in many countries. A formal mechanism helps to provide constant feedback on the performance and unexpected outcomes of legislation. The OECD 2012 Recommendation of the Council on Regulatory Policy and Governance, the 2014 Framework for Regulatory Policy Evaluation (Box 3.1) and the EU Better Regulation Guidelines and Toolbox (Box 3.2) offer guidance on the kind of elements which authorities could consider when designing an evaluation mechanism for legislation. For example, the province of Québec (Canada) has tailored international guidance on evaluation to SSE needs and specificities (Box 3.3).

Typically, evaluation mechanisms would include stakeholder consultation, ex-ante and ex-post assessment and periodicity.

  • Stakeholder consultation. Consultation should be open to interested groups and the public. Engaging stakeholders during the regulation-making process and designing consultation processes aim to maximise the collection of quality information as well as local SSE practices are reflected and integrated in laws. A wide range of approaches could be used including informal consultation, circulation for comments, public hearings or creation of advisory bodies. For example, article 16 of the 2013 Social Economy Act implemented in the Province of Québec (Canada) introduced an accountability mechanism. The Act recognises stakeholder roundtables and establishes an obligation for dialogue between provincial authorities and stakeholders (Box 3.3).

  • Ex-ante assessment. This helps to determine the need for introducing new regulation or if revising existing legislation is sufficient.

  • Ex-post evaluation. This helps to assess if laws are effective, efficient, coherent and simple to use. For example, in the Netherlands, the senate assesses legislation based on the criteria of effectiveness and simplicity which are common principles that need to be included in laws.

  • Periodicity. Evaluation needs to be clearly defined in time to inform when it takes place. For example, in France the 2014 Law on the Social and Solidarity Economy states that an assessment of the law needs to be performed every two years. In Luxembourg, the 2016 Law that created a new legal status for social enterprises, the Societal Impact Companies (Sociétés d’Impact Sociétal – SIS) specifies that the law must be assessed, under the responsibility of the ministry in charge of the social and solidarity economy, within three years after its enforcement.

Evaluation criteria that are used often cover processes and outcomes. A pragmatic approach to criteria could be informed by practitioners and networks. Criteria could include impact measurement to understand in which context some legal options are more appropriate than others. The assessment should also benefit from feedback of users/beneficiaries of legal frameworks.

Successful processes leading to the design of legal frameworks for the SSE usually are bottom-up, sequenced and inclusive of stakeholders (Infographic 3.3). Some countries developed good practices (sometimes enshrined in the law itself) to ensure that steps leading to the design of legal frameworks are the outcome of co-construction processes involving networks and stakeholders across levels of government and sectors (Box 3.4).

Outcomes of legislation are usually linked to the issues and priorities that supported the introduction of laws. As a result, assessments of outcomes need to be country-specific and use criteria that measure the impacts of legislation on activities of SSE entities. For example, they could include the number of business closures (in the case of social enterprises); the geography of SEE entities (urban/rural); the number and quality of jobs created by them and their contribution to the implementation of strategic priorities and policies. This could help to better understand why some legal frameworks are not appropriate in supporting SSE entities, and identify their unexpected consequences such as more red tape, additional administrative burdens, heavy reporting procedures restrictions; complexity; lack of demand for legislation, or poor knowledge of SSE entities needs. Strategies to assess the outcomes of legal frameworks for the SSE should include end-users/ beneficiaries of regulation i.e. SSE networks and/or their representatives. This could facilitate revisions and updates of laws when appropriate as demonstrated by the example of Luxembourg (Box 3.5).

Ultimately, the assessment of outcomes should help countries set better framework conditions for the SSE. As such, it should help achieve more recognition and visibility of the SSE; legal clarity around definitions; removal of market barriers or distortions for SSE entities; better access to finance; design of tailored taxation, etc.

Regulatory Impact Analysis (RIA) could support evaluation of outcomes of legal frameworks for the SSE. RIA is a decision tool to (i) systematically and consistently examine potential impacts arising from government action and (ii) communicate the information to decision-makers. Legal frameworks are often designed without enough knowledge of their consequences due to the lack of ex-ante assessment. This lack of understanding could lead to regulations being less effective, unnecessary and even burdensome. Therefore, Regulatory Impact Analysis applied to legal frameworks for the SSE can be an effective strategy for improving their quality and ensuring that regulations are fit for purpose and will not cause more issues than they solve. The OECD developed a set of best practices for RIA that could inspire evaluation of outcomes of legal frameworks designed for the SSE (Box 3.6).

Another way to evaluate if legal frameworks have reached their goals, is to consider whether SSE entities comply with their stated societal objectives. Oversight of SSE entities’ compliance likely depends on the extent to which the SSE is benefiting from any governmental subsidy, procurement priority, or regulatory forbearance. The more SSE entities enjoy benefits not ordinarily available to other economic actors, the more likely governments want to ensure that they are upholding the societal objectives that caused those benefits to accrue in the first place. Otherwise, there is a risk of other non-SSE entities misrepresenting themselves to access benefits that are intended for SSE actors.

The next question is which authorities should manage the oversight process? It is worth looking at how other economic activity is regulated or supervised in a specific country or region. In some countries, regulatory oversight and supervision is allocated according to the form of entity being overseen. For countries that have created specific SSE legal forms and that have a tradition of regulating by form (over function), the government authority that is providing a benefit may be best suited to taking on an oversight and supervisory role. For example, in Colombia, the Superintendence of the Solidarity Economy is the national entity that supervises cooperatives and other SSE entities. However, this might be challenging for countries that have either limited, or, if any, expressly defined legal forms of SSE entities. For example, the Australian Prudential Regulation Authority (APRA) supervises financial organisations, such as member owned mutual companies, that are authorised as deposit-taking institutions. For those countries, oversight and supervision may be dispersed across multiple government agencies and throughout various levels of government (state, provincial, municipal). Dispersed oversight can put additional pressure on government authorities to co-ordinate with each other, particularly to avoid parties engaging in regulatory triage by seeking the most lenient regulatory oversight.

Another point for examination is the role of the marketplace -both its private and public sector actors- in providing feedback to the SSE. Stakeholder consultations indicate that countries and regions are quite likely to benefit from building frameworks that encourage market responses to the behavior of SSE actors. This requires developing a framework that promotes transparency and public disclosure to stakeholders in the SSE. Some of this framework can piggyback on pre-existing mechanisms that foster transparency. But there are likely to be opportunities for this framework to be augmented with additional disclosure regimes developed.

Countries could use legal assessments to adopt a dynamic approach to legal frameworks for the SSE. Like most legislation, legal frameworks for the SSE can become obsolete over time or need to be updated/adjusted to bring parity with new social or economic situations/evolutions. SSE entities inherently operate in dynamic markets and have ever-evolving needs and challenges. For example, SSE entities are expected to play a greater role to support the transition to more inclusive and greener economies and societies. As such, policy makers need to be prepared to adapt legal frameworks to new market developments and the evolving needs of stakeholders.

Political momentum needs to be sustained over time as challenges may emerge during the design and implementation of legal frameworks. Establishing a formal accountability mechanism such as the one developed by the Province of Québec in Canada can be a useful way to ensure the adaptability of legal frameworks over the long run while sustaining political momentum. Likewise, such mechanisms can help to link monitoring activities directly to policy actions that keep legal frameworks attuned to the real-world needs of social enterprises. The activities conducted as a result of such processes in Luxembourg testifies to the benefits of such approaches over time. Integrating such requirements helps to ensure that the necessary financial and human resources are available for future evaluations even if policy priorities have shifted towards new areas.


[6] European Commission (2021), Better Regulation Guidelines, https://ec.europa.eu/info/sites/default/files/swd2021_305_en.pdf.

[4] European Commission (2017), EU Better Regulation Toolbox, https://ec.europa.eu/info/sites/default/files/better-regulation-toolbox_1.pdf.

[8] OECD (2022), Designing Legal Frameworks for Social Enterprises: Practical Guidance for Policy Makers, Local Economic and Employment Development (LEED), OECD Publishing, Paris, https://doi.org/10.1787/172b60b2-en.

[3] OECD (2018), OECD Regulatory Policy Outlook 2018, OECD Publishing, Paris, https://doi.org/10.1787/9789264303072-en.

[1] OECD (2014), OECD Framework for Regulatory Policy Evaluation, OECD Publishing, Paris, https://doi.org/10.1787/9789264214453-en.

[2] OECD (2012), Recommendation of the Council on Regulatory Policy and Governance, https://www.oecd.org/gov/regulatory-policy/49990817.pdf.

[5] Québec (2020), Application de la loi sur l’économie sociale. Rapport 2013-2020.

[7] Raquel Ortiz-Ledesma (2019), “Legal-political frameworks that promote Social and Solidarity Economy in Colombia and Mexico. A comparative cartography”, Deusto Journal of Human Rights, Vol. 4, https://djhr.revistas.deusto.es/article/view/1703/2128.

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