Italy’s historic Emilia-Romagna region in the Po Valley of Northern Italy is home to the world’s oldest university in the world, University of Bologna, and the likes of such renowned companies as Ferrari, Ducati and boasts some of the highest living standards in all of the European Union. They are also the most cooperative economy in Europe, with employee co-operatives representing 30% of the GDP and involve 57% of the population.
From 1943 to 1945, Emilia Romagna plagued by heavy combat; serving as the front line for Allied bombing from the Southern Italy. Badly shaken from 18 years under Missoulini’s dictatorship, the region emerged in the Cold War years as part of Italy’s so called “Red Belt,” consistently electing Communist and Socialist candidates to office.
Article 45 of the Italian Constitution (1947) states: “The Republic recognizes the social function of cooperation characterized by mutual aid and not private profit. The law promotes and favors the growth of these structures using the most appropriate means and guarantees that their character and purpose will be inspected accordingly.”
Also in the constitution was a provision called Basevi’s Law, which allowed declared cooperatives to transfer their surpluses to a reserve free of corporate tax on the condition that if the coop be dissolved or sold the reserve is dispersed to other cooperative associations, providing the development funds for other cooperative initiatives. Additional tax advantages are tied to initiatives like “employment for marginalized” communities. Consequently, the region retains a small 3.1% unemployment rate.
Employee owned cooperatives are most popular in retail, construction, agricultural production, housing, manufacturing and more recently social services like care-giving. While the state still serves as regulatory authority and the facilitator of institutional funding, these the production and distribution of services remains decentralized and market driven. This balance has provided the people of Emilia Romagna with 30% higher per capita income than the rest of Italy, without reliance on corporations that may have otherwise undermined the local economy
This uniquely cooperative based society has come to embody what academics call the Emilian Model, a modern case study of a solidarity economy connected by values of economic democracy, participatory governance, social capital and institutional stability.