State Formation, Ideological Competition, and the Ecology of Israeli Workers' Cooperatives, 1920–1992

Abstract

University, and at the Conference on Institutions and Markets inComparative-Historical Perspective at Stanford University, as well as Don Palmer, Linda Johanson, and three anonymous ASQ reviewers for helpful comments on earlier drafts. Rusty Russell generously made public the data he collected on Israeli workers' cooperatives, and Yael Parag was very helpful in supplementing the data for our purposes.We investigate the effect of community-wide political and ideological interests on the failure rate of Israeli workers' cooperatives. Political order may be provided by the state or through membership in a federation. Independently, both conditions should reduce organizational failure, but when they coexist, the influence of the state should dominate due to its comparative advantages as a supplier of order. Organizations that represent rival ideologies cause ideological competition, which should increase failure, while organizations that represent shared ideologies cause ideological mutualism, which should decrease failure. The context of Israeli workers' cooperatives provides a natural laboratory for testing these ideas, as it spans the formation of the Israeli state. It also includes a powerful federation, the Histadrut, to which many cooperatives belonged, as well as significant populations of organizations representing both capitalist and socialist ideologies. The analysis supports all of the above arguments, indicating the relevance of interdependence, broadly defined, for the evolution of organizational populations.0 Interdependence between organizational populations is an understudied topic (Astley, 1985; Baum, 1996; Hunt and Aldrich, 1998). What research there is has tended to focus on economic and technological interdependencies (e.g., Barnett, 1990;Carroll and Swaminathan, 1992;Hunt and Aldrich, 1998), to the exclusion of political and ideological ones (Carroll, Delacroix, and Goodstein, 1990). Yet both political structures and ideologies can have dramatic effects on organizational outcomes. These effects are illustrated throughout history, for example, by the marked economic improvements that accompanied the reordering of power between the Parliament and the king in England's Glorious Revolution of 1689. Those changes have been attributed both to efforts to build a more economically effective structure of state power (North and Weingast, 1989) and to religious rivalry (Carruthers, 1990). Contemporary illustrations are also available, such as the differences in organizational behavior and performance that result from changes in and variance among political and ideological regimes in the transitioning economies of Eastern Europe (Stark and Bruszt, 1998). We will use "coops" here to refer to Israeli workers' cooperatives, and "cooperatives" to refer to other cooperative organizations.

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