Can the social sector of the economy in Mexico converge on the concept of social economy?

Abstract

In Mexico, the term most commonly used to refer to activities and organizations that are not public or private is the social sector of the economy but the Law of Social and Solidarity Economy (LESS for its acronym in Spanish) does not define it (only listed the legal figures that compose it). In contrast, in the world is increasingly more frequent the concept of social economy, which has several definitions and criteria that organizations must meet to be considered part of it. The problem is not semantic and has academic and public policy consequences. Therefore, this paper is intended to review the characteristics of each of the types of organizations that integrate the social sector of the economy in Mexico and compare them with the criteria of the International Comparative Social Enterprise Models (Icsem)' concept of social economy to establish their similarities and possibilities of convergence. Additionally, in practice, in each legal figure there are organizations with different degrees of compliance of such criteria, for that reason a valuation exercise was conducted with four levels of qualification: 0, if the criterion is not present in that type of organization and 1 to 3, depending on whether some, many or all organizations of a certain type have that feature. This exercise yielded an overall score for each legal figure and some conclusions about the possibility of convergence with the concept of social economy. Later, we decided to transform this numerical exercise into a qualitative version in which we retain only the extreme cases (0-3) to determine the absence or presence of each indicator and get a more defined picture about these figures. Our conclusion is that not all types of organisms recognized by the LESS are actually forms of social economy while others not included in this or in the Catalogue of organism of the social sector of the economy (Cosse) are closer to the characteristics of social enterprise. Therefore, the convergence between the concepts of social sector of the economy and social economy is feasible only if government entities change the vision sustained in the legal figures and define the specific characteristics that must meet the social enterprises.

Full text

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Can the social sector of the economy in Mexico converge on the concept of
social economy?
Dallas 60-501, Col. Nápoles, México 03810, DF, México
carola_conde@hotmail.com
Paper presented at the
5th Ciriec International Research Conference on Social Economy
Social Economy in a Globalized World
Theme 1 - New trends and concepts
Topic 1 - The globalization of the SE concept: from diversity to convergence
Lisboa, Portugal
July 15-18, 2015
Carola Conde Bonfil
Universidad Autónoma Metropolitana
México

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Abstract
In Mexico, the term most commonly used to refer to activities and organizations that are not
public or private is the social sector of the economy but the Law of Social and Solidarity
Economy (LESS for its acronym in Spanish) does not define it (only listed the legal figures that
compose it). In contrast, in the world is increasingly more frequent the concept of social
economy, which has several definitions and criteria that organizations must meet to be
considered part of it.
The problem is not semantic and has academic and public policy consequences. Therefore,
this paper is intended to review the characteristics of each of the types of organizations that
integrate the social sector of the economy in Mexico and compare them with the criteria of the
International Comparative Social Enterprise Models (Icsem)’ concept of social economy to
establish their similarities and possibilities of convergence.
Additionally, in practice, in each legal figure there are organizations with different degrees of
compliance of such criteria, for that reason a valuation exercise was conducted with four
levels of qualification: 0, if the criterion is not present in that type of organization and 1 to 3,
depending on whether some, many or all organizations of a certain type have that feature.
This exercise yielded an overall score for each legal figure and some conclusions about the
possibility of convergence with the concept of social economy. Later, we decided to transform
this numerical exercise into a qualitative version in which we retain only the extreme cases (0-
3) to determine the absence or presence of each indicator and get a more defined picture about
these figures.
Our conclusion is that not all types of organisms recognized by the LESS are actually forms
of social economy while others not included in this or in the Catalogue of organism of the
social sector of the economy (Cosse) are closer to the characteristics of social enterprise.
Therefore, the convergence between the concepts of social sector of the economy and social
economy is feasible only if government entities change the vision sustained in the legal
figures and define the specific characteristics that must meet the social enterprises.
Keywords: civil society organizations, cooperatives, Mexico, social economy, social sector of
the economy

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Introduction
In Mexico, the term most commonly used to refer to activities and organizations that are not
public or private is the social sector of the economy (SSE) but the Law of Social and Solidarity
Economy (LESS for its acronym in Spanish) and those who use it do not define it (only listed
the legal figures that compose it). In contrast, in the world is increasingly more frequent the
concept of social economy, which has several definitions and criteria that organizations must
meet to be considered part of it.
The problem is not simply semantic and has academic and public policy consequences.
Therefore, this document reviews the characteristics of each of the types of organizations that
integrate the SSE in Mexico and confront them with the criteria of the International
Comparative Social Enterprise Models (Icsem)’ concept of social economy to establish their
similarities and determine whether it is only the use of another term or correspond to different
realities.
Additionally, in practice, in each legal figure there are organizations with different degrees of
compliance of such criteria, for that reason a valuation exercise was conducted according to
the frequency at which each indicator can be found in the daily practice of every type of
organizations both SSE and those added by the Catalogue of organisms in the social sector of
the economy (Cosse for its acronym in Spanish) and the civil society organizations (CSOs),
which obtained some conclusions about the possibility of convergence with the concept of
social economy. Later, we decided to transform this numerical exercise in a qualitative
version in which we retain only the extreme cases (0-3) to determine the absence or presence
of each indicator and get a more defined picture about these figures.
Thus, in the first section of this paper the legal figures that form the SSE based on the LESS and
the Cosse are reviewed, and in the second part other legal figures are incorporated (not
considered in the SSE) that are usually promoters of initiatives identifiable as social
enterprises; the third presents the concepts often used in Mexico which include (or related to)
the social economy and the fourth section is devoted to attempts to link the latter with the SSE.
Finally, in the fifth such concepts are discussed and the possibility of convergence between
these two when confronting the legal figures with the attributes of the social economy defined
in Icsem project.

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1. The social sector of the economy
The LESS does not contain a definition of the social economy and only gives the type of
organizations that comprise:
“The Social Sector of the Economy shall be composed of the following forms of social organization:
I. Ejidos;
II. Communities;
III. Organizations of workers;
IV. Cooperatives Societies;
V. Companies belonging largely or solely to workers; and
VI. In general, all forms of social organization for the production, distribution and consumption of goods
and services socially necessary.” (LESS 2013, article 4)
The following are the main features1 of each of these types of organizations and we include
other legal figures that the National Institute of Social Economy (Inaes) considerate in the
Cosse.2
Ejidos. They have legal personality and assets; own the land they have been provided to them
or have acquired and may be eligible for collective exploitation of the ejido lands when their
assembly so decides, determining the way of organizing labor and the exploitation of the
resources of the ejido, as well as the mechanisms for equitable sharing of benefits, the
constitution of capital reserves, social security or services and the ones that integrate mutual
funds.
Communities. They are a special protection regime for agrarian centers (the land becomes
inalienable, imprescriptible and indefeasible) and internally they determine the use of their
lands, their division, aims and organization for the use of their property. Individual commoner
status is recognized and allowed the use and enjoyment of his land; the possibility to assign
his rights in favor of family and neighbors, and the use and benefit of common goods.
Rural production societies (SPR for its acronym in Spanish). They are integrated by two or
more partners (farmers, ejidatarios, commoners, smallholders, settlers, third party investors,
or a combination of these). Its social object can include, among others i) produce, transform,
commercialize and provide services in an associated form, ii) Obtain public or private support
1 For a more detailed description please refer to the Appendix 1 to 5.
2 The order corresponds to the one presented in the Cosse.

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to undertake, develop and consolidate productive and social investment projects, and iii)
Manage altogether: financing, insurance, supplies, machinery, equipment and facilities.
Unions of ejidos, communities and rural production societies. They include two or more
organizations of the same type that are associated, but there are differences between these
unions and the organizations that comprise them (see Annex 1).
Rural associations of collective interest (ARIC for its acronym in Spanish). They are
constituted by two or more ejidos, communities, rural production societies or unions of any of
these figures in order to integrate human, natural, technical and financial resources for the
establishment of industries, exploitation, commercialization systems and any other economic
activity.
Mutual societies. Group of people acting voluntarily to build a fund of financial assistance,
through regular cash contributions, by way of spontaneous collaboration, which aims to help
its members in case of diseases, accidents and other natural hazards; assistance that can be
extended to family members when these are not self-sufficient. Incidentally, it is considered
as a mutual aid group organized to provide economical solution to personal or family
demands in the cases and under the conditions laid down in its statutes. (Instituto de
Investigaciones Jurídicas, 1988, p. 2981) An important limitation of mutualism in Mexico has
been the inability to engage in economic activities (industry, agriculture, trade, etc.) or
financial so they focused on insurance activities.
Agricultural and Rural Insurance Funds (FAAR for its acronym in Spanish). The Law of
Insurance and Surety Institutions (LISF for its acronym in Spanish) 2013 recognizes them as
mutual benefit societies; they are fastened in its operation to Article 30 of this but its
organization, functioning and activities are regulated by its own law. They aim to provide
mutual and solidarity protection to its members through active operations of insurance and
coinsurance. (Law of Agricultural and Rural Insurance Funds [LFAAR for its acronym in
Spanish], 2005, Article 3). They can only offer coverage of damage in the agricultural sector
and of animals and related classes that register; life operations limited to schemes of balance
and life for rural families, and to the field of personal injury.
Cooperatives. It is a form of social organization composed of individuals based on common
interests and the principles of solidarity, self-effort and mutual help, in order to meet
individual and collective needs, through the fulfillment of economic activities of production,

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distribution and consumption of goods and services. (General Law of Cooperative Societies
[LGSC for its acronym in Spanish], 2009, Article 2). There are three types: i) Consumers of
goods or services, ii) Producers of goods or services, and iii) Savings and loan (SCAP for its
acronym in Spanish).3 The worker is part and holder of the cooperative (social worker) and
the decisions are not taken vertically but the best measures for the development of the
company are discussed.
Social solidarity societies (SSS). They aim is, among others, production, processing and
commercialization of goods and services needed and its partners have an obligation to provide
their personal work to fulfill the purposes of the society. The SSS are constituted with a
collective heritage character; partners must be ejidatarios, commoners, landless peasants,
parvifundistas [agricultural smallholders] and persons entitled to work, to allocate a portion of
the product of their work to a social solidarity fund. This fund can only apply to: i) the
creation of new sources of labor or expanding existing ones; ii) work training; iii) the
construction of rooms for members; iv) the payment of contributions for retirement, pension
and temporary or permanent disability, in addition to those provided for in the regime of
compulsory social insurance and other welfare services v) medical and educational services to
members. (Law of Social Solidarity Societies, 1976, Article 32)
Mercantile societies.4 The General Law of Mercantile Societies [LGSM for its acronym in
Spanish] (2014) recognized six species of societies: i) in collective name; ii) in partnerships;
iii) of limited liability; iv) anonymous; v) in limited partnership by shares, and vi) cooperative.
The mercantile societies can perform all necessary acts of commerce for the fulfilment of its
social object. Except for cooperatives, societies can be of variable capital and social capital is
likely to increase by the subsequent member’s contributions or by the admission of new
members, and to decrease such capital by partial or total withdrawal of contributions.
3 The SCAP are regulated by the Law to Regulate Activities of Cooperative Societies of
Savings and Loan [Lrascap for its acronym in Spanish] (2014).
4 They are part of the SSE the ones that have participation of organisms in the social sector of
the economy [OSSE for its acronym in Spanish] at least 51% of the share capital. For further
details of each type, see annex 3.

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Credit unions. They are the oldest institutions that have provided financial services and, for
many years, the only source of credit for low-income5 producers. They are authorized to
perform operations exclusively with partners, who may be individuals or legal entities,
national or foreign people engaged in economic activities, except for those individuals who
receive their income predominantly from wages and salaries, pensions, or social support
programs. (Credit Unions Law, 2014, Article 21)
Community financial societies (Sofinco for its acronym in Spanish). It is one of the
associative figures6 created in 2009 by the Popular Savings and Loan Law [LACP for its
acronym in Spanish] to provide financial services to low-income population in the rural sector
(members and others). It is a financial institution composed of individuals and legal entities7
that is established as a sociedad anónima (roughly equivalent of the public limited company)
restricted by the collective ownership and democratic basis (no individual may have more
than 1% of share capital) and operates under the principles of territoriality, solidarity, mutual
support and economic sector (farmers, ranchers, foresters, fishermen, etc.). Its institutional
design allows that the collection of savings in the communities is reinvested in the same
regions by means of credit, promotion and investment and economic development of rural
communities.
Unregulated multiple object financial societies (Sofom for its acronym in Spanish). They are
sociedades anónimas that in its bylaws is expressly included as main social purpose
conducting regular and professional of one or more of the authorized activities (grant credit to
the public in various sectors and leasing and factoring financial operations). They cannot raise
funds from the public and do not require the authorization of the federal government to be
established. They can't maintain economic ties with credit institutions, popular financial
societies [Sofipo for its acronym in Spanish], Sofinco or SCAP or issue debt securities in their
5 There are credit unions from different sectors (tanners, fishermen, ranchers, industrialists,
farmers, traders, etc.), those from the "social sector" (which are intended to assist to the
economic sector that for their social, economic and geographic conditions cannot access to
traditional financial institutions) and the mixed, serving various sectors.
6 Along with the savings and loan cooperatives (regulated by the Lrascap).
7 Associative figures as the SPR and SPR unions; ejidos and union of ejidos and communities;
agricultural and industrial units for rural women; SSS, civil associations, civil societies,
producer cooperatives, cajas solidarias, local agricultural and livestock associations, ARIC and
sociedades anónimas with at least 25 members.

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name. They are only subject to supervision by the National Banking and Securities
Commission [CNBV for its acronym in Spanish] in terms of prevention of operations with
resources of illicit origin.
The Cosse also includes cooperative organizations (unions, federations and confederations of
the three kinds of cooperative societies) as well as two types of groups that do not have a legal
figure:
Workers saving associations (Cajas de ahorro de trabajadores). It is an institutional
mechanism in some companies or organizations to promote savings from its employees,
which held a general assembly at the beginning of the fiscal year to determine the
operation of the caja (cash desk) (types of loans, duration, amount, payment of interest,
etc.) and elect those who will occupy the positions of treasurer, vocal (member with
attributions) and secretary. The institution makes discounts (savings and payments) via
payroll and, at the end of the year, reimburses each worker contributions and, based on
these, the proportional fair share of the interest earned. It does not have a legal figure, but
it possess an internal regulation. It cannot be considered a social enterprise due to the lack
of structure and permanence. Nor is a financial intermediary because it cannot do a public
appeal to save or accept users who are not permanent employees of the company.
Social groups. Many government programs condition the delivery of grants and subsidies
to groups, because sometimes these are created only "on paper" to obtain the resources
and, once received, are dissolved or each one carries out the project individually. In
return -due to the complexity of the legislation and how burdensome it is to get a legal
figure and fulfill the fiscal obligations-, there are many groups that function as self-
managed collectives and implement successful productive projects. Some of these groups
are the movements and networks of solidarity economy, but others are simply part of the
informal economy.
The Inaes specifies that the OSSEs must accept and respect the purposes, values, principles and
practices enunciated in articles 8 to 11 of the LESS (see annex 6) and that -to confirm their
compliance- it will verify that in the constitutive act or statute, or in amendments to these -in
case of legally constituted OSSEs-, and in the act of integration -in the case of social groups- it
is established as a minimum:

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a) That the decision-making is democratic and is not linked to the capital contributed by
the partners, associates or members.
b) That the ownership of the means of production is social or joint.
c) That the surplus or profits generated, are intended to at least one of the following
items:
i. For the provision of social services;
ii. The growth of its reserves and funds; or
iii. The compensation for the services provided or work performed by their
partners, associates or members. The distribution of these surpluses or profits
must not be associated with the capital contributions, if any, that had been
made.
Those organizations that are not considered included in the Cosse may request the Inaes the
valuation to recognize specifically the type or category to which they belong (Inaes, 2014a).
2. Other legal figures (not considered in the SSE)
In counterpart, the LESS and the Cosse exclude other legal figures that best meet the criteria or
indicators of social economy and that are presented below.
Civil associations (AC for its acronym in Spanish). A group of people -in use of its rights of
free association- integrate them in order to carry out one or more activities in which do not
prime the economic sense. While fundamentally they do not pursue profit, nor do they intend
to be in the red ("non-profit, but without desire of loss") by which the relevance is not
whether economic benefit is achieved but how is distributed. However, most of them survive
thanks to donations from companies or international organizations and governmental
subsidies and support. The withdrawal of the State created the conditions for these
organizations to proliferate, mostly those in assistance of vulnerable groups and the topics that
were not of interest to the private enterprise or the public sector.

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Civil societies (SC for its acronym in Spanish).8 They are similar to civil associations because
they offer an opportunity for the partners to commit among themselves to combine their
resources for the realization of a common purpose, but that purpose may have a
predominantly economic character as in the civil societies of professionals who come together
to provide services, charging for that assistance. However, other groups choose this figure
because it is more flexible from a tax point of view and applicable regulations and may be
considered part of the third sector by the thematic they address (health, sexual rights,
reproductive health, housing, ecology, etc. and mainly training) or by the beneficiary
population of their services.
Private assistance institutions (IAP for its acronym in Spanish)/ private charity (IBP for its
acronym in Spanish). They are often known as philanthropic organizations and are non-profit
organizations regulated by the Law of Institutions for Private Assistance9 of each state and
monitored and supported by a Board of Private Assistance or an agency of the state executive.
They are differentiated from other figures because they cannot modify their foundation will,10
that is, if the object was to assist a specific vulnerable group it cannot be replaced by another
and they cannot dissolve and distribute the assets. If they are not able to continue operating,
all their resources should be transferred to another institution with a similar social purpose.
3. Concepts often used in Mexico that include to (or associated with) the
social economy
In addition to the multiplicity of legal figures, Mexico also presents a proliferation of terms
and concepts -usually not sufficiently differentiated and often used as equivalent or even,
synonyms-- that increase the existing lack of clarity regarding the social economy. To give the
reader an idea of the seriousness of the problem, we include here a non-exhaustive
compilation (in alphabetical order):
8 Some types of organizations registered under this figure are indigenous regional funds,
foundations, business incubators, associations, rural development promoters, coordinating
organizations and development agencies.
9 There are four different denominations: institutions of private assistance, private charities
institutions, private charities associations and private social welfare institutions.
10 The founders are the people who gave part of their assets to create one IAP.

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 economy (alternative, another economy, ecological, emerging, ethic, for life, of the
poor, of work, mixed, new economy, people-centered, popular, popular solidarity,
social, social and solidarity, solidarity, with a human face)
 companies (non-profit, social interest)
 organizations (civil society, community, community economic development, non-
governmental, non-profit, social for labour)
 sector (economic self-managed, exempt from taxes, independent, non-monetary,
philanthropic, third, voluntary)
As it can be easily seen, the only agreement is that there is no agreement. Therefore, other
authors choose to steer clear of the controversy and only seek to identify the "economic and
social reach and localized forms". Some more are trying to contribute to the debate on some
of the concepts, but ultimately, they only have in mind one of the legal figures (cooperatives)
and, therefore, their proposals leave out the characteristics of the other types of organizations.
Despite the above, there are a few concepts that are used most frequently so we will explain
them briefly below, following a chronological order and from the most to the least inclusive.
Third sector. It is the most inclusive term and is commonly deemed to be comprised of
philanthropic organizations, of private assistance, private or public welfare, etc. but also by
others who do not fit the profile of social economy like sports clubs, religious associations or
political parties, networks of organizations, groups of human and political rights, and direct
actions for the promotion of the development. (Verduzco, 2003) It is based on the five
criteria11 proposed by the Johns Hopkins University in Baltimore: i) be organized formally, ii)
be private, iii) absence of profit,12 iv) enjoy the ability of institutional self-control of their own
activities and v) marked degree of voluntary participation.
Non-governmental organizations (NGO). This term was the most common in the eighties but
it was used interchangeably to refer to any association arising out of the governmental action
11 These criteria were subsequently taken by the UN in the publication The Handbook on Non-
Profit Institutions in the System of National Accounts.
12 They can get benefits, but must be reinvested according to the organization's mission and to
pay competitive wages to their workers.

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regardless of their objectives, sizes or interests (Thomas, 1992, p. 122). More recently there
has been some consensus to exclude, among others, some organizations dedicated only to
commercial activities and profit as well as political parties, associations and informal
networks representing class interests (Themudo and Natal, 1996, p. 243). Then it was begun
to distinguish a subgroup more limited in the field of development:
[…] we understand as NGOs those groups formally organized, out of the public sphere,
working in non-profit activities for the alleviation of poverty and social development, of
themselves and/or others. Their interest is not only the benefit of the members of the
association, but a public interest, that -in general- is organized through actions directed
from above. (Themudo and Natal, 1996, p. 243)
Civil society organizations (CSO). Later, other authors objected that it wasn't a suitable name
because they described them by what they were not and the name of CSO arose because the
term civil society refers to the diversity of people who, with the category of citizens and
usually collectively, act to make decisions in the public sphere. CSOs are a fundamental part of
the Third sector and in Mexico are associated mainly with three legal figures (AC, SC and
IAP/IBP, see annex 7).
Non-profit institutions (ISFL for its acronym in Spanish). This denomination is the one used
by the National Institute of Statistics and Geography (Inegi for its acronym in Spanish), which
classifies them into five types (see annex 8) and defined them as "legal or social entities
created to produce goods and services, whose legal status does not allow them to be a source
of income, profit or other financial gain for the units that establish, control or finance them;
they are institutionally separate from government, are autonomous and do not coercively
impose the participation in them". (Inegi, 2015)
Solidarity economy. Unlike the previous concepts, this does not cover the social economy but
intersects it because this includes organizations but also "popular collective experiences of
work and income based on reciprocity" (Marañon, 2013, p. 28). Sanchez, Garcia and Rangel
(2012) understand the solidarity economy as initiatives aim to build an alternative economic
system and resume to Villareal (2005):
This is how, the Solidarity Economy arises with different practices around the world
and with different concepts, but where they stand out: collective participation,
cooperation, self-management, democracy, self-sufficiency, promote human
development and gender equity, as well as, conservation of ecosystem balance.
Social enterprises. Similar to what happens in other countries, social enterprises in Mexico
correspond to an organizational diversity much broader than the exclusive "non-profit"

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business model but there is lacking a clear definition or a concept agreed between the
different players and it is often use as a synonym for other terms such as social business and
social entrepreneurship.
The Inaes points:
"In practice, it is very complex to have a definition of social enterprise that enjoys
worldwide acceptance, largely since the legal figures vary from one country to another
and, for different reasons, do not refer to historical forms, as the cooperatives." (Inaes
and Universidad Iberoamericana Puebla 2013: Annex 1)
For some authors, more important than the name it is to determine the legal figures that more
clearly can be considered part of the "third sector of the economy" and choose those that in
their foundation act are declared non-profit and devoted to a social mission: civil associations,
civil societies and private welfare institutions or private charity.13
For others, the key is the collective property or the characteristics of their operation (internal
democracy, self-management) while some are more guided by the social relevance of their
activities (production of goods and provision of socially necessary services) or the social and
environmental objectives pursued by it (water, education, employment, community
development, health, housing, human rights, empowerment, gender equity, etc.). Finally, for
some more the determining factor is whether the direct and indirect beneficiaries of its shares
belong to a vulnerable group or not.
Social business.: The use of this term is fairly recent and is linked to the Global Social
Business Summit in 2014 and the presence of Muhammad Yunus in the country who
commented that "In Mexico there are still no social business" because:
They are things that are close to social business but are not exactly that, because they
are charitable or are for profit, someone is making money from them. Social businesses
are companies without dividends that solve problems, are specifically designed to solve
problems, without having any intention of winning dividends for oneself. Then you
should take that money and reinvest in the company. (Evia 2014)
Social entrepreneurship. There seems to be greater acceptance of this term, but not as
equivalent to the social enterprise but as an attribute of an economic project -not necessarily
productive-, sometimes individual, but in many occasions group, which leads to the
13 The voluntary organizations and foundations are not in themselves a legal figure and use
any of the above or constitute trust for the administration of funds.

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generation of revenue -new or additional- of those who carry them out and the improvement
in their quality of life. Depending on who promotes or supports the project, social
entrepreneurship must meet sometimes some extra features to be recognized as such
(innovation, sustainability, gender equality, etc.).
In summary, the first terms include the social economy but also other types of organizations
that comply only partially with the characteristics of this one. At the opposite end, the last two
(social business and social entrepreneurship) are not subsets of the social economy since its
definition emphasizes only two features (they are companies without dividends that solve
problems) and in social entrepreneurship are included the individual economic projects.
4. Social economy in Mexico
As noted, even in the Mexican academia there is relatively little concern for conceptualizing
the social economy and characterize it. There are very few publications on the subject and in
these the different concepts presented are often used as synonyms or only the definitions of
other countries are taken up. In addition, the law that should define and delimit the concept of
social economy (LESS) uses another term (SSE) that only lists a series of legal figures.
The Inaes insists that the SSE:
“[…] it is the one that has historically been more widespread in the country's
governmental, academic, cooperative and Union spheres, enjoying some degree of
popularizing and positioning in the social imaginary, so the introduction of a new
concept could lead to confusion and uncertainty […]” (Inaes 2013: Anex 1, p. 63)
But the LESS and the Inaes itself contain "social economy" in its name so the latter tries to
reconcile both terms and defines it as:
[…] the economic activity carried out by agencies of the social sector, based on
democratic decision-making, social ownership of resources, equitable distribution of
benefits between its members and the social commitment on behalf of to the
community. (Inaes 2014b)
Characterized by:
 Do not be linked directly to capital or contributions of each partner.
 Relations of solidarity, cooperation and reciprocity.
 Structure and associative management.

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 Creating jobs or providing services to partners.
 Meet the needs of its members and the communities where the activities take place.
To harmonize both terms notes:
“[…] we talk about Social Economy as a system of practices and values developed in
the SSE that has defined the LESS. The agencies that compose it existed before the
appearance of it, but they will be called social enterprises when they meet the
characteristics and practices that the system of the Social Economy favors”. (Inaes
2013: II)
Next, we will analyze if it is feasible for its legal characteristics that they behave as social
enterprises and if they do, even so, if they do it in practice.
5. Discussion of concepts
The differences in criteria and variables to consider regarding social enterprise show us that
the only consensus that has been achieved is that there is no consensus; that is, there is not a
univocal concept, definition, or even unique naming. Rechy (in press) states:
Some authors as well as various organized groups and even different legal orders allude
to this [the SSE] using another type of name or qualifying, between those different
denominations we could mention: solidarity economy, alternative economy, enterprise
sector of social interest, voluntary or third sector of society, sector of the economy of
labor, sector of the economy with a human face, self-managed economic sector, and
popular or of the poor economy.
Something similar happens in terms of the theoretical aspects as Rechy adds:
[…] not even exists what it might be called a theory of the sector, […] what has been
abundantly produced is much ideology.
Being the social sector the product of a national history, rich in struggles and regional
thinkers, it has become a reality intangible, incomprehensible, indecipherable, whose
limits are indeterminable. […].
Sánchez, García y Rangel (2012) agree about this problem:
[…] the Social Economy is a heterogeneous economic reality, marked by a series of
difficulties and contradictions regarding its definition, conceptualization, delimitation of
its activities and of its organizations and, consequently, its quantification […]. We must
not forget that this sector includes economic units linked to activities of all sectors and
that they may be present at all stages of the production process. In addition, in each
country or region, it is treated with different terminologies that are easily confused […]
not even always define the same field of activities.

16
Given the variety of terms in use and the lack of consensus on them, we consider most
relevant to confront the characteristics of the Mexican organizations with the definitions
developed internationally. For this reason, in Table 1 are compared the criteria established by
the Icsem project with the purposes, values, principles and practices of the OSSE stipulated in
the LESS as well as the ones that the Inaes notes on its website.
As it can be seen there are few characteristics in common and in the Mexican case seems to
be confusion among the purposes, values, principles and practices to be observed by the OSSE.
The absence of a concept and a theory are complicated even more by the diversity of legal
figures operating in Mexico -which are summarized in table 2- and in schematic form can be
separated into two groups: the OSSE (specified in the LESS and the Cosse) and the CSOs. A
International Comparative Social
Enterprise Models
(Icsem project)
Mexico. Purposes, principles,
values and practices in the LESS
(2013)
México. Inaes website (2014)
Economic project
A continuous production
Production, distribution and
consumption of goods and services
socially necessary (Purposes)
Socio-economic system
Some paid work
Generation of sources of work and
better ways of life for all people
(Purposes)
An economic risk
Social mission
An explicit social aim
Design of plans, programs and
projects of economic and social
development (Purposes)
Limited profit distribution, reflecting
the primacy of social aim
An initiative launched by a group of
citizens or a third-sector
organization(s)
Associative bodies of social property
Participatory government
A high degree of autonomy
Autonomy and independence of the
political and religious spheres
(Principles)
Democratic management
A participatory nature, which involves
various parties affected by the activity
Democracy (Values)
Participatory democracy (Purposes)
Participatory democracy regime
(Principles)
A decision-making power not based
on capital ownership
Equitable distribution of benefits
without any discrimination (Purposes)
Equitable and inclusive distribution of
its surpluses
Source: Elaborated by author.
Table 1. Comparison of criteria for defining social economy organizations

17
special case is the social groups that are now included in the Cosse but have traditionally been
considered outside (due to their lack of legal figure) or closest to CSOs (since operating non-
profit and often driven by them).

18
Legal figure Objective Sector
Economic
sector
Activities
Ejidos
Communities
Cooperatives
Join forces and help to meet needs of groups and
individuals, carrying out activities of production,
distribution or consumption of goods and services
Primary/
secondary/
tertiary
Agroindustrial, craft, mining, metalw orking,
w ood, clothing, construction, supply of
products, transport, trade, credit and savings,
cooperative education, housing, social
w elfare, among others.
Social solidarity
societies
(SSS)
Creation of jobs, job training, construction of rooms
for members, payment of retirement, pension and
disability and other welfare services, and medical
and educational services for partners
Primary/
secondary/
tertiary
Agriculture, forestry, beekeeping,
aquaculture, hunting, commercial fishing,
agribusiness, metalworking, clothing /
education, health, housing, welfare services
Rural production
societies
(SPR)
Undertake, develop and consolidate productive and
social investment projects. Produce, transform,
commercialize, and provide associated services.
Manage financing, insurance, supplies, machinery,
equipment, facilities.
Primary/
secondary/
tertiary
Industries, exploitation, commercialization and
any other economic activities
Rural associations
of collective interest
(ARIC)
Establishment of industries, exploitation,
commercialization systems and any other economic
activity
Secondary/
tertiary
Industries, exploitation, commercialization and
any other economic activities
Mercantile
societies (SM)
Perform all trade acts that are necessary for the
fulfillment of the social object specified in the
foundation act of each society
Tertiary Trade
Credit unions
(UC)
Serve their members as a medium for obtaining and
channeling financial resources, satisfy the
production needs of supplies of its members and
make more efficient its organization and
administration processes .
Tertiary
Granting credits and loans to its members.
Practice discount operations,financial
factoring and leasing, with values and
derivatives. Promote the organization and
managing industrial or commercial enterprises.
Buy, sell and market supplies, goods and
sundries, among others.
Community
financial societies
(Sofinco)
Promote rural financial education, which w ill aim to
promote savings and credit support for the
development of productive activities in the rural
sector, for w hich it may receive donations and
support from federal, state and municipal
governments.
Tertiary
It of fers savings, credit, micro-insurance,
remittances (domestic and international),
transfer of subsidies and payment services to
its partners and customers.
Unregulated
multiple object
financial societies
(Sofom, ENR)
The regular and professional realization of one or
more of the activities of granting of credits and
loans to its partners, leasing or financial factoring
Tertiary
One or more of the following activities:
granting of credits and loans to its partners,
leasing or financial factoring
Social groups Boost productive projects
Primary/
secondary/
tertiary
Agriculture, forestry, beekeeping,
aquaculture, fishing, agribusiness, crafts,
clothing
Civil associations
(AC)
Social welfare, popular diet, development of
indigenous peoples and communities, gender
equality, attention to social groups with disabilities,
human rights advocacy, promotion of sports and
educational, cultural, artistic, scientific and
technological development.
Tertiary
Education, health, housing, welfare,
recreation, social justice, promoting popular
economy, citizen participation, urban and rural
development
Civil societies
(SC)
The partners mutually agree to combine their
resources for the realization of a common goal of
predominantly economic nature.
Tertiary
Health, sexual rights, reproductive health,
housing, ecology, etc. but mainly training
Private assistance
institutions/private
charity
(IAP/IBP)
Perform actions that help the population to deal with
emergency situations, strengthen their capacity to
meet needs, exercise their rights and, if possible, to
ensure their family, labour and social reintegration.
Tertiary
Support, social integration and healthy
development of individuals or groups of
vulnerable population or at risk, by their
condition of disadvantage, neglect or lack of
physical, mental, legal or social protection
Catalogue of organisms of the social sector of the economy
Civil society organizations
Source: Elaborated by author based on the current legislation applicable to each legal figure.
Table 2. Summary of the characteristics of the social organizations in Mexico
Comprehensive and equitable development of the
rural sector through productive activities and social
actions to increase w elf are and participation of the
population
Social sector of the economy (SSE)
Primary
Agriculture, forestry, beekeeping,
aquaculture, hunting, commercial fishing

19
As we can see, the integration of the SSE differs greatly from the most frequently used
concepts in the world but they have some things in common such as:
1. The alternate names of the SSE and social enterprise agree on the central aspects
(collective ownership, the primacy of the individual over capital, production of goods
or provision of ongoing services, etc.).
2. They are located between the public economy and the capitalist economy, with
potential to be an alternative to the latter and neoliberal policies that have been
implemented.
3. It is recognized that they have the potential to contribute to economic development
and create positive effects in aspects such as income redistribution, the generation of
productive employment, the reorientation of production towards priority social, etc.
4. They develop activities to meet a social mission.
5. They benefit lower-income people or with some aspect of vulnerability.
However, there is resistance and even opposition to accept the CSOs:
On the other hand, neither the micro nor the family business can be an integral part of
the SSE to the extent that both are handled as profit-oriented private businesses. Either
NGOs or IAP [...] since their functions are only external service and advice. Finally, they
do not form part of the SSE informal sector (in which are located different production
units, legal or illegal, giving eventual or permanent employment to a number of non-
absorbed by the formal market workers and that, therefore, escape total or partially to
the national accounting and the tax system), but its passage to the SSE must be ensure
through its adaptation to some of the associative figures recognized legally as part of it.
In conclusion, the SSE is the system that is created by the interaction of the set of social
entities organized and identified by self-management, solidarity, democratic and
humanist practices for the integral development of the human being as subject, an actor
and end of the economy. (Rechy, in press)
Other authors are more practical:
There have been many attempts to define it [...] We do not intend to participate in this
debate; we want only to identify it so [...] corresponds to localizable and localized
economic and social forms. (Barceló, 1988, 44)

20
In this sense, the most convenient is that, regardless of the legal figure, we confronted the
criteria of a widely accepted definition with the actual14 behavior of organizations. The
exercise consisted of rating the presence of the Icsem indicators in four stages:
1) Based on our experience, we attribute a score considering four frequency levels:
0: The indicator is not present in this type of organization.
1: Some organizations have this feature.
2: Many organizations meet this criterion.
3: It is a distinctive feature of such organizations.
2) To avoid that the results reflect an individual and subjective perspective, once the
assessment is completed from personal knowledge, the table with scores was sent to several
specialists in rural development (agriculture, livestock and forestry); cooperatives, and civil
society organizations and social groups15 for validation or correction.
3) The values were modified taking into account these opinions16 which allowed achieving an
overall score for each legal figure.
As expected, the higher values were obtained by the production cooperatives (24)17, the SSS
(23), cooperatives of consumption (22), credit unions (22) and the AC (21), which means that
the majority of the organizations of each of these types behave as (or close to) social
14 In practice, in every legal figure there are organizations with different degrees of
compliance with those criteria.
15 Diana Elisa Bustos Contreras and Alfredo Tapia Naranjo of the National Institute of
Forestry, Agriculture and Livestock (Inifap for its acronym in Spanish) for agricultural
organizations; José Antonio Espinosa García of the Inifap, on the livestock; Jesús Zárate
Mancha, independent consultant, on forestry; Mario Rechy Montiel, former Advisor to the
Economic Development Committee in the Senate, for cooperatives and workers' organizations
and Alejandro Natal Martínez, Head of the Department of Social Processes of the Universidad
Autónoma Metropolitana Lerma, on organizations of civil society and social groups. However
his specialty, several of them expressed theirs view on all the legal figures.
16 In those were changes were made two options were presented: choose the score in which
several experts agreed or -when differed among themselves- assign an intermediate one (e.g.,
one intended to qualify with three and another with one so the value of two was chosen,
which sometimes coincided with the initial proposal).
17 The maximum score that could be achieved was 27 given that are 9 indicators and the 3
value corresponded to the opinion "It is a distinctive feature of such organizations."

21
enterprises. The reason why the cooperative savings and loan do not fall within this group is
because of the current prudential regulation and the pressure of financial authorities, so some
(or many) of them treat their member as customers and are more concerned to comply with
the indicators of financial management than with the cooperative principles. For its part, the
SSS are a legal figure that has facilitated some working and social groups, mainly rural,
become legally constituted and qualified for the benefits of the respective law.
Among civil society organizations, the AC reach a higher valuation than the other two figures
because, in large measure, their birth responds to social problems not addressed by the public
and private sectors. Civil societies obtained a lower score (19) than the AC because not all of
them respond to a social need; some of them are created for the benefit of their own partners
(such as the professional firms) given the legal facilities that this figure represents them.
Finally, welfare or private charitable institutions are in last place in the group of CSOs (17)
because many of them are still handout schemes.
On the opposite end, with the four lowest scores, three (ARIC, Sofom and SM18) are entities that
do not have restrictions in their legislation regarding the distribution of profits or the creation
of social funds so many of them may have been constituted with a purely economic purpose
and for the benefit of those who constitute them. Instead, the low score of Sofinco (11) -
despite being community one - is due to its recent creation (2009) and some features of the
law that gives origin to them.
4) Since some high scores may be due to the accumulation of values 2 (“many organizations
meet this criterion”), it may be that none of the indicators is a distinctive feature of such
organizations; therefore, we decided to transform the scores into a binary situation taking into
account only the ends and replacing the threes by and the zeros by X as shown in table 3.19
18 They reached 13, 11 and 7 points respectively.
19 Blank cells contained the intermediate values (1 and 2, which correspond to “some” and
“many” organizations, respectively).

22
Consump-
tion
Produc-
tion
SCAP UC Sofinco
Sofom,
ENR
2 0 4 6 2 6 3 1 2 5 2 2 3 5 2 3
Economic project
A continuous production18
An economic risk X9
Some paid work2X X X 2
Social mission
An explicit social aim 6
An initiative launched by a group of citizens
or third sector organization(s)
X X 7
Limited profit distribution, reflecting the
primacy of social aim
X X X 3
Participatory government
A high degree of autonomy X4
A participatory nature, which involves
various parties affected by the activity
X4
A decision-making power not based on
capital ownership
X X 5
Table 3. Comparison of ICSEM criteria for social economy organizations and the functioning of the Mexican legal figures
Source: Elaborated by author with the validation of experts in different types of organizations.
Number of characteristic indicators
No. of figures
with
attachment to
each indicator
Commu-
nities
Catalogue of organisms of the social sector of the economy
Icsem indicators
Organism of the social sector of the economy
Civil society
organizations
AC
Other legal figures
Social
groups
2 It means that most of the work is voluntary or from partners; therefore, 0 means that the w ork is paid for (w age).
The values correspond to the following attributes: 0: The indicator is not present in this type of organization; 1: Some organizations have this characteristic; 2: Many organizations meet this criteria
and 3: A distinctive feature of such organizations
SCAP: cooperative societies of sav ings and loan; SSS: social solidarity s ocieties; SPR: rural production society ; ARIC: rural associations of collective interest; SM: mercantile soc ieties (OSSE’s
participation of at least 51% of the share capital); UC: credit unions; Sofinco: Community financial societies; Sofom, ENR: Unregulated multiple object financial societies; AC: civil associations; SC:
civil societies; IAP: private assistance institutions; IBP: private charities.
1 For organizations that are located in the tertiary sector, w e consider providing continuous services.
Cooperatives
Ejidos
SC
IAP/
IBP
SSS
SPR
ARIC
SM
Financial institutions

23
Although the types of organizations that top the list are almost the same,20 it is more useful to
perceive the indicators that are characteristic to each of those figures or which are completely
foreign to them.
The last column on the right counts the number of legal figures that work with attachment to
each indicator and, at the same time, shows which of these tend to be more easily met in
Mexico. Thus, the indicators which arise most frequently 21 correspond to the economic
project, but perhaps because they are not as specific to social enterprises.
What is more worrying is that the indicators that may be more specific to social enterprises
have lower frequency: Some paid jobs 22 (2) and Limited utilities distribution (3 It draws
attention to the fact that the latter is only considered present (among the OSSEs) in consumer
cooperatives and two of the three figures of CSO.
It is also interesting to note that "A participatory nature, which involves various parties
affected by the activity" fails to be a distinctive feature in the OSCs (although a fairly common
practice in the ACs) because many of them were created by a leader who saw the provision of
a good or service unsatisfied, but has been immortalized in the direction of the organization
and his leadership begins to develop authoritarian traits.
Final considerations
As already mentioned, in Mexico there is relatively little academic production relative to the
social economy and in the existing often resume definitions of foreign authors and use as
synonyms some of the concepts discussed and others less frequently employed examined in
section 3. Other authors choose to steer clear of the controversy and only identify the
20 The number of indicators that are distinctive features of each type of organization was 6 for
production cooperatives and the SSS, and 5 in the AC and credit unions; whereby the AC
displace consumer cooperatives.
21 A production of goods or provision of continuous services (8) and An economic risk (9)
22 It means that most of the work is voluntary or from partners; therefore, X implies that good
(or most) of the work is paid for (wage). Al parecer, sólo ocurre realmente en las SSS y las UC.
Apparently, it only really happens in the SSS and the UC. Although it is quite common among
the AC, there has been a great insistence that they become professionalized and that has gone
against the volunteer work.

24
"economic and social localizable and localized forms." Some more are trying to contribute to
the debate on some of the concepts, but ultimately, they only have in mind one of the legal
figures (cooperatives) and, therefore, their proposals leave out the characteristics of the other
types of organizations.
By the side of the practitioners, it is remarkable the absence even of internet portals and web
pages; several networks do not have their own space and are hosted in those of other
countries23 or are advertised as under construction.24 Most products (academics or
practitioners) on solidarity economy in Mexico have focused on documenting the experiences
that have emerged25 (mostly success stories) and highlights them as an alternative to the
prevailing economic model.
As for the terms and definitions used in Mexico perhaps the problem is not strictly
conceptual: the differences between some positions are due to what interests and concerns
every sector of the definition adopted:
 For the academics, a well-defined concept that helps to advance the science, the
theory of organizations in general (and this sector in particular) and the knowledge of
reality.
 For the leaders of the organizations and bodies representing the sector, the
ideological, political and organizational consequences but, above all, support and
subsidies as they incorporate or leave out some players.
 For the political parties, the strengthening of some social actors and the possibility to
lead or slow their integration as well as the emergence of an alternative project of
nation.
23 Google search of "Mexico solidarity economy" returns as a first result the Portal of
Solidarity Economy Mexico but is actually a page of the Network of Networks for Alternative
and Solidarity Economy (REAS) based in Spain.
24 This is the case of the Solidarity Economy Space (EcoSol).
25 They include, among others, barter, ecological and organic production, the street markets,
fair trade, buying and selling with currency that has no legal tender, volunteering, recycling
and reuse, ethical finance and, in general, the construction of another economic model without
profit, which focuses on the individual and is based on equality, employment, respect and
commitment for the environment the environment, cooperation, reciprocity, associationism,
sustainability, etc.

25
 For the Government, the design of public policies for development, organization and
expansion of the economic activity of the sector and the budget that would imply.
In conclusion we could point out:
 There is no clear definition (even name) or theory of the social economy in Mexico.
 The concept most frequently used -according to the Inaes- is the SSE as it is used in the
laws of matter, but it is only illustrative and not limited. However, the Inaes itself has
begun to use the one of social economy in its internet portal, training materials,
instances that have been created, the program of incentives, etc. but still does not seem
to have sufficient institutional clarity in this matter.
 The organizations that integrate the SSE are very different among themselves and with
regard of those conforming the third sector or the European social economy.
 The other common denominations in Mexico (third sector, voluntary sector, non-profit
sector, solidarity sector, solidarity economy, social economy, social initiative and
others) are not synonymous. By putting the emphasis on a specific feature (for
example, volunteering or solidarity) automatically exclude organizations which do not
possess it. This can lead to certain organizations with the same legal figure, in the
same economic sector, carrying out the same activities and attending to the same
target population (to name only some features) do not belong to the same subset.
 There are many interests behind the definition that is chosen, that are linked to both
academics and government and public policy support.
 The exercise carried out by comparing the presence of indicators of the Icsem in
Mexican legal figures represents a first approach to show that the SSE includes some
types of organizations that are far from being considered part of the social economy
although they have been part of historical processes or exercise political pressure to be
considered as such and be eligible for receiving the PFES supports. At the same time, it
helps to define the universe of study for the fieldwork of Icsem project.

26
 There is no consensus on the variables26 to determine the inclusion/exclusion of
certain types of organizations or which one (s) prioritize, but the definition of models
of social enterprise of the Icsem, undoubtedly will shed light on these.
 In light of the above, our conclusion - given the current progress of the investigation -
is that not all types of organizations recognized by the LESS are really forms of social
economy while others not included in Cosse are closer to the characteristics of social
enterprise. We also assume that among the findings of the fieldwork we will find that,
in general, several Mexican legal figures may be associated with a single model of
social enterprise, but at the same time, within the same group (e.g., cooperatives), we
will find so significant differences that could place them in different models of social
enterprise. Therefore, the convergence between the concepts of social sector of the
economy and social economy is feasible only if government agencies changed the
vision sustained by legal figures and define the specific characteristics that must meet
social enterprises.
26 Non-profit; self-management, solidarity, democratic and humanist practices; creation of
social actors, production of goods and provision of socially necessary services; social and
environmental objectives contained in its mission; community benefits and low-income
population or with some aspect of vulnerability etc.

27
References
Books
Instituto de Investigaciones Jurídicas (1988) Diccionario jurídico mexicano, 2ª ed., IV.
Marañón, P. (2013), La economía solidaria en México. México: Universidad Nacional
Autónoma de México, Instituto de Investigaciones Económicas.
Rechy, M. (en prensa) El sector social de la economía en México. Una recopilación de
documentos sobre el último periodo de su resistencia, con sus alcances y limitaciones
1997—2012.
Verduzco, G. (2003) Organizaciones no lucrativas: visión de su trayectoria en México.
México: El Colegio de México, Centro Mexicano para la Filantropía.
Journal Articles
Themudo, N.S. and Natal, A. (1996) Las ONGS: un mundo de diversidad: diferencias en
desafíos organizacionales, Toluca: Convergencia, Revista de ciencias sociales,
3(10/11), pp. 241-270.
Book chapters
Barceló, V. M. (1988) El sector social en la perspectiva del desarrollo económico, in
Armando Labra, (comp.). El sector social de la economía. Una opción ante la crisis,
México: Siglo XXI Editores, pp. 43-74.
Sánchez, M., García, M. and Rangel M. (2012) Economía social. Conceptos y prácticas como
alternativa de desarrollo socioeconómico en México, in M. Sánchez (ed.) Estrategias
sustentables un nuevo enfoque. Compendio experiencias de Investigación. Tula de
Allende: Universidad Tecnológica de Tula Tepeji.
Thomas A. (1992) Non-governmental organizations and the limits to empowerment, in Marc
Wuyts et al. Development Policy and Public Action.
Conference Papers
Villarreal, A. (2005). El Paradigma que estamos construyendo desde la socioeconomía
solidaria (SES). Paper presented at Third meeting on the globalization of solidarity,
Dakar, Senegal
Reports
National Institute of Social Economy [Instituto Nacional de la Economía Social, Inaes] and
Universidad Iberoamericana de Puebla (2013) Diagnóstico del Programa de Fomento a
la Economía Social http://www.inaes.gob.mx/index.php/transparencia/participacion-
ciudadana/ejercicio-de-rendicion-de-cuentas-a-la-sociedad/resultados-de-la-evalucion-
de-fonaes/diagnostico-del-programa-de-fomento-a-la-economia-social, accessed 11
May 2015

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On-line Publications
Agricultural and Rural Insurance Funds Law [Ley de Fondos de Aseguramiento Agropecuario
y Rural, LFAAR] (2005) Published online
http://www.diputados.gob.mx/LeyesBiblio/pdf/LFAAR.pdf, accessed 12 August 2014
Credit Unions Law [Ley de Uniones de Crédito, LUC] (2014) Published online
http://www.diputados.gob.mx/LeyesBiblio/pdf/LUC.pdf, accessed 12 August 2014
Evia, M.J. “3 preguntas de negocios sociales. Entrevista a Muhammad Yunus” (2014)
Published online
https://www.dropbox.com/s/qatppu6sukn42x9/Entrevista%20Yunus.pdf?dl=0,
accessed 11 December 2014
General Law of Cooperative Societies [Ley General de Sociedades Cooperativas, LGSC]
(2014) DOF, Published online http://www.diputados.gob.mx/LeyesBiblio/pdf/143.pdf,
accessed 20 August 2014.
General Law of Mercantile Societies [Ley General de Sociedades Mercantiles, LGSM] (2014)
DOF, Published online
http://www.diputados.gob.mx/LeyesBiblio/pdf/144_130614.pdf, accessed 13 August
2014.
International Comparative Social Enterprise Models (Icsem) project (2014) Invitation to Join
the “Icsem” Project. Published online http://iap-socent.be/icsem-project, accessed 20
June 2014
Law of Insurance and Surety Institutions [Ley de Instituciones de Seguros y de Fianzas, LISF]
(2013) Published online
http://www.diputados.gob.mx/LeyesBiblio/abro/lgisms/LGISMS_abro_04abr13.pdf,
accessed 10 August 2014
Law of Social and Solidarity Economy Law [Ley de Economía Social y Solidaria, LESS]
(2013) Published online http://www.diputados.gob.mx/LeyesBiblio/doc/LESS.doc,
accessed 11 August 2014
Law of Social Solidarity Societies [Ley de Sociedades de Solidaridad Social, LSSS] (1976)
Published online http://www.diputados.gob.mx/LeyesBiblio/pdf/71.pdf, accessed 11
August 2014
Law to Regulate Activities of Cooperative Societies of Savings and Loan [Ley para Regular
las Actividades de las Sociedades Cooperativas de Ahorro y Préstamo, Lrascap]
(2014) Published online http://www.diputados.gob.mx/LeyesBiblio/ref/lrascap.htm,
accessed 11 August 2014

29
National Institute of Social Economy [Instituto Nacional de la Economía Social, Inaes]
(2014a) Catálogo de organismos del sector social de la economía (Cosse), archivo
disponible en: http://www.inaes.gob.mx/index.php/empresas-sociales, accessed 12
August 2014
(2014b) ¿Qué es la economía social?
http://www.inaes.gob.mx/doctos/Nociones1%20x%20web/index.html , accessed 12
August 2014
National Institute of Statistics and Geography [Instituto Nacional de Estadística y Geografía,
Inegi] (2015) Cuenta satélite de las instituciones sin fines de lucro de México
http://www3.inegi.org.mx/sistemas/Glosario/paginas/Contenido.aspx?ClvGlo=csisflm
&nombre=042&c=27754&s=est , accessed 2 May 2015
Popular Savings and Loan Law [Ley de Ahorro y Crédito Popular, LACP] (2014), DOF, archivo
pdf disponible en: http://www.diputados.gob.mx/LeyesBiblio/pdf/17.pdf,, accessed 8
February 2015
Social and Solidarity Economy

30
Annexes
Feature Ejido
Union of ejidos and
communities
Society of rural
production
Union of rural
production societies
Legal
framework
• Article 27 of the
Constitution.
• Agrarian La w, Articl es 9-
11 and 14.
• Rules of Procedure.
• Agrarian la w, Arts. 50,
108 and 109
• Constitutive Act
• Internal econom ic
regulation.
• Article 27 of the
Constitution
• Agrarian law articles 110
to 113
• Agrarian La w Arti cles
108,109 and 113.
• Internal economic
regulation
Members
Maximum or minimum
number of members is not
specified. It consists of
ejidatarios and
commoners.
Two or more ejidos or
communities. The ejido or
community can belong to
more than one union of
ejidos.
Minimum 2 partners
(farmers, ejidatarios and
commoners,
smallholders, settlers,
third party investors).
Two or more rural
production societies
Social capital
Not determined. They
must be suitable to the
purposes of the
organization, that is to say,
depending on needs.
It must be manifest or
integrated based on
contributions and, where
appropriate, be foreseen
in the regulations actions
"T" (land).
In the unlimited no
downpayment is required.
In the limited and
supplemented, the initial
payment will be required to
form a minimum capital
(350 and 700 VSMD
respectively).
• Unlimited: no need to
show capital.
• Limi ted: sufficient,
according to the
satisfaction of the
objectives.
• Supplem ented: s hould
meet the needs of its
target.
Liability regime Not specified
• Limi ted
• Unlim ited
• Supplem ented
• Limi ted
• Unlim ited
• Supplem ented
• Limi ted
• Unlim ited
• Supplem ented
Social purpose /
objectives
Combination of resources
or efforts for the realization
of a common goal of a
predominantly economic
nature (exploitation of
resources of the ejido,
productive integration,
services,
commercialization).
There may be direct
exploitation of the land.
Coordination of activities,
mutual assistance,
manufacturing,
commercialization and
services.
Produce, transform,
commercialize, and
provide associated
services. Obtain public or
private support to
undertake, develop and
consolidate productive and
social investment projects.
Manage altogether:
financing, insurance,
supplies, machinery,
equipment, facilities, etc.
There may be direct
exploitation of the land.
Coordination of production
activities, industrialization,
mutual assistance,
services,
commercialization, or
others not prohibited by
law.
Authorities /
internal
structure
• General Assembly of
Ejidatarios
• Ejidal com m is sion
• Surveillance autho rity
Two or more ejidos or
communities. The ejido or
community can belong to
more than a union of
ejidos.
• General Assembly of
Members
• Board of Directors
• Supervisory Board.
• General Assembly of
Members
• Board of Directors
• Supervisory Board.
• Manager (s )
Fiscal regime
Not specified
Simplified (transparency
regime), for primary
activity, monthly or six-
monthly statement.
Simplified (transparency
regime), for primary
activity, monthly or six-
monthly statement.
Legal records
National Agrarian Registry.
Public Registry of
Commerce. Federal
Taxpayers Registry.
Ministry of Foreign Affairs,
National Agrarian Registry
(mandatory), Public
Registry of Rural Credit,
Federal Taxpayers
Registry
Ministry of Foreign Affairs,
notarized constitutive act,
Records: National
Agricultural, Rural Public
Credit, Trade and Federal
Public Taxpayers.
Annex 1. Main features of the unions and the legal figures comprising them 1
VSMD: times the minimum daily wage in the Federal District
Source:Elaborated by author based on the Inaes (2014).
1 In addition, the Rural Associations of Collective Interest are composed of tw o or more organizations included in this Annex.

31
Feature Mutual insurance company Social solidarity society Mercantile society 1,2
Legal
framework
Law of Insurance and Surety
Institutions
Law of Social Solidarity Societies
General Law of Mercantile Societies, deed
or constitutive policy and social contract.
Members
Minimum: 300, when the society
practices life operations.
• Minim um : 15
• Maximum : unlim ited
• Limi ted liabi lity society: maximum fifty
partners.
• Sociedad anónima : at least two
partners.
Social capital
Specified in the social contract
(enough to create the reserve and
social funds).
Social assets of collective character
which are integrated by the
contributions of the partners, the
proportional part of the obtained
profits that partners agree to
contribute as well as donations from
official ins titutions and individuals or
companies unrelated to the society,
for a specific application.
• Sociedad anónima , of limited liability, of
limited partnership and limited
partnership by shares: the minim um
capital is which is established in the
social contract.
• Society in collective name and sim ple
limited partnerships, the minimum capital
may not be less than fifth of the initial
capital.
Liability regime
The social responsibility of the
mutualised will be lim ited to cover its
proportionate share in the expenses
of management of the company.
• Collective nam e so ciety (general
partnership): all members respond in a
subsidiary , unlimited and solidarity way,
of the social obligations .
• Limi ted Partners hip: one or more
partners are liable, in a subsidiary ,
unlimited and solidarity way, of the social
obligations, and one or more limited
partners are only required to pay their
contributions or their actions.
Social purpose /
objectives
It is limited to operating as a mutual
society and they may, among others,
carry out the following operations:
• Grant loans or credits
• Acquire, buil d and m anag e hous ing
of social interest and urban estate of
regular products
• Set up and invest the technica l
reserves
• Receive titles in disco unt and
rediscount
• Operate with values
Creation of sources of employment.
Conservation and improvement of
the ecology. Rational exploitation of
natural resources. Production,
processing and comm ercialization of
required goods and services.
Education of members and their
families in the practice of social
solidarity; affirmation of national
values; defense of the country's
political, cultural and econom ic
independence. Actions aimed at
raising the standard of living of the
members of the community.
Trade-related objectives.
Authorities /
internal
structure
• General Assemb ly
• Board of Directors
• Director
• One or several Com m is sioners
• General Assemb ly;
• General Assemb ly of
Representatives, if any;
• Executive Comm ittee;
• The comm itments es tablis hed in
the constituent bases or designated
by the General As sembly.
• Manager (s ).
• As s em bly or collegiate governing body.
• As s em bly of partners or General
shareholders ass embly
• Adminis trative borad of the subs idiaries .
1 They must have the participation of social sector organizations of the economy of at least 51% of the share capital.
Fuente: Source:Elaborated by author based on the Inaes (2014) and the Ley General de Sociedades Mercantiles (2014).
Annex 2. Main characteristics of three types of socities
2 For further details of the six types of societies operating, see Annex 3.

32
Feature
Society in collective
name
Simple limited
partnership
Limited
partnership by
shares
Sociedad anónima
Limited liability
society
Acronyms: Does not use acronym S. en C. S. en C. por A. S. A. S. de R. L.
Law governing
it
General Law of
Mercantile Societies
General Law of
Mercantile Societies
General Law of
Mercantile Societies
General Law of Mercantile
Societies
General Law of
Mercantile Societies
Characteristics
The members respond
in a subsidiary,
solidarity and unlimited
w ay of the social
obligations.
Two kinds of
members: named and
limited partners
- Two kinds of
members: named and
limited partners
- Capital represented
by shares.
-Capital represented by
registered shares.
- Partners forced to pay
for their actions, either in
cash or in kind.
The social parts can
not be represented by
negotiable instruments
and are indivisible.
Process of
Constitution
- Board partners to draft
statutes.
- Authorization by the
Ministry of Foreign
Affairs.
- Notarising by notary
public
- Registration in the
Public Registry of
Commerce
- Board partners to
draft statutes.
- Authorization by
the Ministry of
Foreign Affairs.
- Notarising by
notary public
- Registration in the
Public Registry of
Commerce
- Board partners to
draft statutes.
- Authorization by
the Ministry of
Foreign Affairs.
- Notarising by
notary public
- Registration in the
Public Registry of
Commerce
- Meeting of shareholders
to draft statutes.
- Authorization by the
Ministry of Foreign Affairs.
- Notarising by notary
public
- Registration in the Public
Registry of Commerce
- Board of partners to
draft statutes.
- Authorization by the
Ministry of Foreign
Affairs.
- Notarising by notary
public
- Registration in the
Public Registry of
Commerce
Social Capital
Do not set a minimum Do not set a minimum
The law does not set
a minimum.
Fixed minimum $ 50,000
pesos
Min.: $ 3,000 pesos, at
least 50% must be paid
at the time of the
constitution.
Reserves
5% of the annual profits
up to 20% or one fifth of
the fixed social capital.
5% of the annual
profits up to 20% or
one fifth of the fixed
social capital.
5% of the annual
profits up to 20% or
one fifth of the fixed
social capital.
5% of the annual profits
up to 20% or one fifth of
the fixed social capital.
5% of the annual
profits up to 20% or
one fifth of the fixed
social capital.
Number of
partners
Minimum: two
Maximum: unlimited
Minimum: two
Maximum: unlimited
Minimum: two
Maximum: unlimited
Minimum: two
Maximum: unlimited
Minimum: two
Maximum: 50
Partner
accreditation
Act of constitution Act of constitution Share. Share.
Act of constitution
(social part)
Liability of
partners /
associates
All members respond in
a subsidiary, solidarity
and unlimited w ay of the
social obligations.
Named partners:
subsidiary, solidarity
and unlimited
Limited partners:
contributions jointly
and severally liable
towards third parties
up to the amount of
their contributions.
Named partners:
subsidiary, solidarity
and unlimited
Limited partners: the
amount of theirs
shares except that
they has taken part
in any operation or
had usually managed
the business of the
society
Up to the amount of their
shares (contribution).
Unlimited administrators.
Up to the amount of
their social part
Foreign
participation
Catalogued. Catalogued. Catalogued. Catalogued. Catalogued.
Social and
surveillance
bodies
-Board members.
- Manager (s).
- Controller that monitors
the actions of managers
- Board members.
- Manager (for limited
partners).
- Controller (for
named partners).
- Meeting of
shareholders
- Manager (name
partner).
- Commissioner.
- General meeting of
shareholders
- Board of directors or
sole director.
- Commissioner (s).
- Assembly members.
- Manager (s).
- Supervisory Board.
Annex 3. Main characteristics of mercantile societies1
1 The characteristics of the sixth type of mercantile societies (cooperative societies) are detailed in annex 4.
Source: Elaborated by author based on the Inaes (2014).

33
Feature Cooperative society
Cooperative society
supplemented
Cooperative society of
savings and loan
Legal framework
Law to Regulate the Activities of
Cooperative Societies of Savings
and Loan
Members It is not specified.
Social capital
Stipulated by the National
Banking and Securities
Commission provisions of a
general nature.
Duration
Limited liability, when partners
only require payment of
certificates of contribution that
have subscribed.
Liability supplemented, when
partners meet pro rata for the
social operations, up to the
amount determined in the act
of constitution.
Social purpose
Perform savings and loan
operations with partners
Types or classes Of savings and loan
Internal
authorities
• General Assembly of members
• Board of Directors
• Supervisory Board
• Credit Committee or equivalent
• General director or manager
Will have indefinite duration
Levels of operation: Basic, I, II,
III and IV
Annex 4. Main characteristics of cooperatives societies
Source: Elaborated by author based on the General Law of Cooperative Societies (2014) and the Law to Regulate Activities
of Savings and Loan Cooperative Societies (2014).
• General Assembly
• Board of Directors
• Supervisory Board
• Committees established by the General Law of Cooperative
Societies and others designated by the General Assembly.
I.- Of consumers of goods and/or services.
II.-Of producers of goods and/or services.
They will be of variable capital. The capital of the cooperative
societies will be integrated with the contributions of the partners
and with the yields that the General Assembly agrees.
Liability regime
Cooperatives may issue certificates for venture capital contribution
for a specified period.
Meet individual and collective needs, through the pursuit of
economic activities of production, distribution and consumption of
goods and services. Cooperatives societies may freely devote to
any lawful economic activity.
• General Law of Cooperative Societies.
• General Law of Mercantile Societies.
• Agrarian Law.
• Minimum: 5
• Maximum: Unlimited

34
Feature
Cooperative society of
savings and loan
Credit union
Community financial
society
Multiple purpose
unregulated financial
society
Acronyms: S. C. A. P. Does not use acronym Sofinco Sofom
Law
governing it
• Law to Regulate the Ac tivities
of Cooperative Societies of
Savings and Loan.
• General Law of Cooperative
Societies.
Credit Unions Law
Law of Popular Savings and
Loan. Rules and guidelines of
the National Banking and
Securities Commission
Law of Credit Institutions
(article 115), Lgoaac (articles
87-C and 95-Bis).
Characterist
ics
Societies constituted in
accordance with the LGSC,
designed to perform savings and
loan operations with its partners,
they are part of the Mexican
financial system with the
character of members of the
social sector w ithout speculative
purpose. The law recognizes
that they are not financial
intermediaries for profit.
It serves to its members as a
mean to obtain and channel
financial resources, to meet
production needs of supplies
and make more efficient its
organization and administration
processes.
They are SA that promote
financial education, savings
and credit support for
productive activities in the rural
sector.They are governed by
principles of territoriality, union
action, solidarity and mutual
aid. They may receive
donations and support from
federal, state and municipal
governments.
Regular and professional
performance of one or more
of the activities of granting of
credits and loans to its
partners, financial leasing or
factoring.
Process of
Constitution
The SCAPs with a total assets
equal or higher than the
equivalent in national currency to
2'500, 000 UDI w ill require
authorization and assigned a
level of operations (I to IV).
- Board partners to draft
statutes.
- Authorization by the National
Banking and Securities
Commission.
- Registration in the Public
Registry of Commerce
- Registration in a Federation
w ith a favorable opinion of it.
- Authorization by the National
Banking and Securities
Commission.
- Registration in the Public
Registry of Commerce
Registration to the
Condusef.
Formalization of the Act of
constitution or its assembly
of transformation under that
scheme.
Social
Capital
Stipulated by the National
Banking and Securities
Commission, differentiated
according to the operating level
(Basic, I, II, III and IV)
The minimum subscribed and
paid capital is the equivalent in
national currency:
Level I: 2 000 000 units of
investment (UDI)
Level II: 3 000 000 of UDI
Level III: 5 000 000 of UDI
Its estate consists of an
ordinary social capital (CSO)
and additional capital called
communal (contributions
w ithout voting rights).
The social capital subscribed
and paid, without the right to
w ithdraw al, as well as its
equity account must be at
least the equivalent in local
currency to 2 588 000 UDI
Reserves
They must constitute a social
reserve fund w ith ten percent of
the surplus to be obtained in
each fiscal year. They must
invest in government securities
of ample liquidity.
The law does not specify it.
Community reserve fund
established by annual
contributions (at least 10% of
profits and maximum 25% of
its equity).
The law does not specify it.
Number of
partners
• Minimum: 5
• Maximum: Unlimited
The law does not specify it.
It must be indicated in the draft
of the bylaw s.
The law does not specify it.
Social and
surveillance
bodies
• General Assembly of Members
• Board of Directors
• Supervisory Board
• Credit Committee or equiv alent
• Dir ector o gerente general
General director. Board of
directors. Commissioners.
External auditor. Auditor-
manager (in case of
irregularities).
Counselors
Commissioner
Audit Committee
Director/general manager
Credit Committee
Independent counsellor
Management Board
Source: Elaborated by author based on the Inaes (2014) and the respective laws.
Annex 5. Main characteristics of other legal figures considered in Cosse1
1 In addition to the legal figures presented in annexes 1 to 5 of this paper, the Catalogue of organisms of the social sector of the economy
includes Rural Associations of Collective Interest, caja (cash desk) of w orkers, cooperative organizations (unions, federations and
confederations) and social groups.
UDI: unit of account based on the price increase and is used to settle the liabilities of any commercial act. The Bank of Mexico published in the
Official Journal of the Federation its value, in local currency, f or each day of the month.

35
Aims Principles Values Practices
(Article 8) (Article 9) (Article 10) (Article 11)
Promote the integral development of the human
being
Autonomy and independence
of the political and religious
spheres
Mutual aid
Primacy of human beings and their
work over capital
Contribute to the socioeconom ic development of
the country, participating in the production,
distribution and consumption of goods and
services socially necessary
Participatory democracy
regime
Democracy
Membership and voluntary retirement
Promote education and training driving practices
that strengthen solidarity, creative and
entrepreneurial culture
Self-management way of work Equity
Democratic, participatory, s elf-
management and entrepreneurial
management
Contribute to the exercise and development of
participatory democracy
Concern for the community Hones ty
Work for mutual and community
benefit
Participate in the design of plans, programs and
projects of economic and social developm ent
Equality
Social or joint ownership of the means
of production
Facilitate the participation and access to
education, work, property, information,
management and equitable distribution of
benefits, without discrimination
Justice
Economic participation of the partners
in justice and equity
Generate sources of work and better ways of life
for all people
Plurality
Right of those who provide personal
services in the OSSEs, to join as
partners
Promote full creative and innovative potential of
workers, citizens and society
Shared
responsibility
Destination of surpluses to the provision of
services of a social nature, the growth of
its reserves and funds, and to reinstate to
its partners in proportion to the use of the
services or the participation in the work of
the OSSEs.
Promote productivity as a mechanism for social
equity
Solidarity
Education, training and technical-
adminis trative permanent and
continuous training for partners
Subsidiarity
Promotion of the culture of solidarity
and the protection of the environment
Transparency
Periodic information on its results and
financial statements to its partners
and free acces s to the respective
information
Trust
Integration and collaboration with
other OSSEs
Self-management
Solidarity commitment to communities
where they operate
Creativity and innovation in all fields
and practices of the OSSEs.
Source: Elaborated by author based on the Law of Social and Solidarity Economy (2013).
Annex 6. Aims, principles, values and practices to be met by OSSEs

36
Feature Civil association Civil society
Private assistance institutions/private
charity
Acronyms: A.C. S. C. I.A.P. / I.B.P.
Law
governing it
Civil Code (State). Civil Code (State).
Law of Private Assistance/Private Charity
institutions and Civil Code (State).
Characteristi
cs
- Common purpose not prohibited
by law (cultural, sports, etc.).
- It does not have a
predominantly economic
character.
Its purpose is common and
mainly economic but does not
constitute a commercial
speculation.
Entities w ith legal personality and its own assets
(foundations or associations), without profit
purpose w hich, with privately owned property
run w elfare acts w ithout individually designating
the beneficiaries.
Process of
Constitution
By private contract, but to have
legal personality and
enforceable against third parties,
must be granted in a public deed
and registered at the Public
Registry of Legal Entities
Nonprofit.
By private contract, but to have
legal personality and
enforceable against third parties,
must be granted in a public deed
and registered at the Public
Registry of Legal Entities
Nonprofit.
People who in life want to constitute an IAP/IBP
must submit to the Board of private
assistance/private charity a written request,
attaching a draft of statutes. Once approved
these, the Board shall issue a certified copy to be
registered before a notary public and rregistered
in the Public Registry of Property and Commerce.
Social Capital
Without social capital, but w ith a
fee-based assets.
Does not require a social capital,
but if there is one it has always
to be fixed and must point out
the contribution of each partner.
The initial capital is the one that the founder
dedicated to create and sustain the institution, and
should be inventoried in detail on the kind of
goods they constitute.
Reserves No obligation to set them up. No obligation to set them up. No obligation to set them up.
Number of
partners
Minimum: tw o
Maximum: unlimited
Minimum: tw o
Maximum: unlimited
Not required. The Board shall be composed of a
minimum of five members, except w hen exercised
by the founder himself.
Partner
accreditation
Recognition of admission by the
Assembly
Recognition of admission by the
Assembly
NA
Liability of
partners /
associates
Unlimited administrators
Subsidiary, unlimited and joint
liability of the members w ho
administer; the other members
w ill only be obligated to their
contribution, unless otherw ise
specified.
Trustees in the exercise of their duties, are not
bound individually but are subject to civil and
criminal liabilities incurred, in accordance w ith
applicable legal provisions.
Foreign
participation
According to activities. According to activities. Not specified.
Social and
surveillance
bodies
-General Assembly
-Director(s)
- General Assembly
- Managing partners
Board of Trustees (organ of administration and
legal representation of an IAP/IBP).
Board of Associates (when it is constituted by
legal entities in accordance w ith other laws and
transform into IAP/IBP).
Annex 7. Main characteristics of civil society organizations
Source: Elaborated by author based on the respective laws.

37
Annex 8. Types of nonprofit institutions (ISFL)
Concept Definition
Non-profit institutions controlled and mainly financed by
Government
They are entities legally constituted, which have an
existence separate from the Government but are financed
mainly by the Government and over which the Government
exercises some degree of control.
Nonprofit institutions of market at the service of enterprises
They are created by business associations in order to
promote their goals.
Non-profit institutions engaged in the non market production
They include ISFLs that charge rates that are based on
production costs and that are high enough to have a
significant influence on the demand for their services; but
any surplus obtained must be retained as the legal status
of "nonprofit institutions" prevents them from distributing it.
Non-profit institutions engaged in the market production
They are ISFLs which are unable to provide financial profit
to the units which control or manage them and they have to
rely primarily on other funds others than the ones of sales
revenue to cover their costs of production or other activities.
Non-profit institutions serving households
They are ISFLs that are not financed and controlled by
Governments and offer goods or services to households free
of charge or at not economically significant prices.
Source: Inegi (2015).