For years, scholars and policy makers have ar gued that cooperatives, particularly agricultural cooperatives, exhibit organizational inefficiencies primarily caused by individual member behavior that is often independent and non-cooperative conflicting with the formation of effective coalition building. This free riding tendency creates significant challenges for a continued joint collaboration between and among member patrons. Yet, agricultural cooperatives have a long history of surviving as successful business enterprises. This paper presents a framework that proposes generic solutions effective as design principles in addressing the negative consequences of high organization costs, thus leading to sustainable common group interest activities.

Despite popular misconceptions, cooperatives present a very successful organizational form worldwide. A recent study found that in the U.S., for example, 134 agricultural cooperatives celebrated their 100th anniversary in 2014. This observation on cooperative longevity is not matched by a corresponding research effort on what makes cooperatives so successful. Most of the extant research seems to focus on intra-cooperative problems that posit significant challenges to cooperatives. This special issue of Sustainability bridges the considerable gap between scholarly work and reality. By focusing on what makes cooperatives so successful for such a long period of time, this issue sheds light on key aspects of cooperative longevity. Bridging social capital, fundamental solutions to excessive heterogeneity-induced high ownership costs, tinkering, cooperative genius, and superior capacity to adapt to shocks and changes are among the factors identified to explain extended cooperative longevity. The insights thereby gained are useful to students of cooperatives, practitioners, and policy makers.

This article explores the cross-fertilization potential that exists between the economic theory of agricultural cooperatives and that of nonprofit organizations. A number of central ideas in the agricultural cooperative theory are shown to generate two novel insights pertaining to the nonprofit economics literature. First, as with agricultural cooperatives, nonprofit organizations can be conceptualized not only as firms but also as service agencies and stakeholder coalitions. Second, the demand-side economic justification of nonprofit organizations, like that of agricultural cooperatives, likely includes reasons other than market failure. The article concludes by calling for research on how nonprofit economics can inform the theory of agricultural cooperatives.