Institutional Combination for Cooperative Financing: Trustful Cultures and Transformational Mid-Levelers Overcame Old-Guard Conservatism

Abstract

Proper financing is often critical for cooperative development, but banks usually avoid providing it. A federation/consorzi of cooperatives that creates a guarantee fund may help to obtain financing in normal periods, but not in turbulent times which require radical, costly changes. Israeli kibbutzim faced this problem in the 1950s-1960s when they sought industrialization and agricultural change to export crops. Conservative old-guard leaders did not use their ample power to obtain financing for the turnaround. A mid-level official, who had been a transformational leader, created solutions without compromising cooperative principles. Ideas for practices enhancing high-trust cultures, which encourage the emergence of such leaders, are offered.

Keywords: Co-Operative Financing, Public Funding, Middle Manager, Transformational Leader

JEL Classification: P13, P32, P35, Q13