Nowadays cooperation between social economy entities and public authorities seems inevitable. Self-sufficient character of such organizations seems to be past as more and more public services are subcontracted. Especially local authorities find social economy entities as a solutions to many social problems including social exclusion. At the same time such organizations are treated as more efficient in comparison to public programs.
Fast development of social economy entities is possible only with public funding. But rise of such organizations brings real benefits to local community and economy. Thank to that social capital is growing and people are more likely to cooperate and undertake many different type of activities. Besides, very positive for the local economy is local multiplier effect – subcontracting social economy entities means that money invested this way will circulate much longer in the local market then when international corporations are getting same contracts.
On the other hand critics might say that supporting social economy entities from public funds may spoil these organizations. They can lose a bit from their efficiency as they won’t need to keep in mind economic calculations all the time. Public funds involve also public control on spending, which means that these organizations may lose some of their independence. Besides all that in can be a serious interference to the free market competition.