Community-oriented versus market-oriented cooperative organizations in developing countries: Is open membership an indicator for success or failure?

The development challenge is too important to neglect the potential use of market-oriented cooperative organizations. However, much more research is needed to identify the mechanisms for success. First of all, it should be accepted that community-oriented cooperatives differ from market-oriented cooperatives and need a different governance structure, while efficiency and selection are key for market-oriented organizations. For these latter organizations we stress the importance of including managerial and strategic aspects in the research that tries to identify the mechanisms for success. We claim that the existing literature on value chains and impact studies in not integrating these aspects and, as a result, has difficulty explaining why so many initiatives fail, while, at the same time, so many good arguments exist to demonstrate that these organizations may contribute to an improvement of the position of smallholders.