The Development of Cooperatives and Other Rural Organizations: The Role of the World Bank

This study reviews the performance of cooperatives in Sub-Saharan Africa, of their governments, and of World Bank programs supporting cooperatives. The authors propose ways to improve the effectiveness of such organizations. They argue that this can be done through regulatory reform, capacity building, and closer collaboration between cooperatives and the local administrators of programs funded by the World Bank.

Farm cooperatives have traditionally served communities by providing transport, primary processing, and marketing services for their products. They also negotiate prices for bulk purchases of goods such as fertilizer and grant credit against expected crops.

This study contends that farm cooperatives in many countries of Sub-Saharan Africa have been hindered by government regulations that restrict their operation and prevent them from fulfilling their traditional role.

This paper proposes that governments deregulate cooperatives and the markets they serve. It suggests that the World Bank can best serve cooperatives by working with governments to revise their policies and by helping cooperatives establish their own effective administrative structures.