This is in response to the recent article that appeared in the Sunday Times “Cooperative managers under probe over Rwf 300m”. This should come as no surprise given the state and modulus operandi of our cooperatives.
At the expense of sounding like a devils advocate, let me remind these leaders of cooperatives and other institutions especially the ministry of commerce and local leaders that true cooperatives focus on member needs and work for the sustainable development of their communities through policies accepted by their members.
However, many businesses call themselves cooperatives when they aren’t.
In instances of this nature few in the name of the many take advantage of the goodwill associated with the name of cooperatives without being one at the expense of the many in the presence of all of us.
In whatever case, calling yourself a cooperative is tantamount to being one. One can identify the causes of such unfair treatment of the would-be beneficiary in the framework of Principal –Agent relationship.
The central dilemma in this relationship is how to get the agent (management of the cooperative) to act in the best interests of the principal (members of the cooperative) when the agent has not only informational advantage over the principal, but also has different interests from the principal.
The situation is exacerbated by the fact that membership of such cooperative is involuntary.
It is made worse when local leaders enforce membership of cooperatives and punitive measures are put in place to enforce membership.
Do we need cooperatives? Are we ready for them? Or we should retract a bit and go back to the structure conduct paradigm (SCP).
If the structure determines the conduct and the conduct determines the performance, then the vehicle will be self propelling and what policy makers need to do is simply to put in the infrastructure in the form of rules and regulation to level the playing field.