All Firms are Cooperatives – And so are Governments

10 Pages Posted: 29 Jan 2014

See all articles by Henry Hansmann

Henry Hansmann

Yale University - Law School; European Corporate Governance Institute (ECGI)

Date Written: January 7, 2014


To both the scholar and the layman, cooperatives often appear to be something of a sideshow in the world of enterprise organization. Properly understood, however, virtually all private enterprise, and democratic governments as well, exhibit the basic form of a cooperative. As a consequence, the study of cooperatives (in the narrower, conventional sense of that term) illuminates our understanding of both investor-owned firms and governments and, conversely, much can be learned about cooperatives by examining other forms of organization. This is already evident when we examine the power and limitations of contemporary economic theories of the firm. At present, however, we know much more about the economic factors that govern the viability of cooperative enterprise than we do about the forms of internal corporate governance and external regulation that also play a critical role.

Keywords: Entrepreneurship, cooperatives, nonprofit organizations, public enterprises, private enterprises, governance, firm organization

JEL Classification: D21, L22 L31, L32, L33

Suggested Citation

Hansmann, Henry, All Firms are Cooperatives – And so are Governments (January 7, 2014). Journal of Entrepreneurial and Organizational Diversity, Vol. 2, No. 2, pp. 1-10, 2013., Available at SSRN:

Henry Hansmann (Contact Author)

Yale University - Law School ( email )

P.O. Box 208215
New Haven, CT 06520-8215
United States
203-432-7101 (Phone)

European Corporate Governance Institute (ECGI)

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels


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