56 CHAPTER 4 Activities Neutral to Nonmembers
These activities may cover services for which nonmember participation entails only a low marginal cost to the organization. They include the provision of technical training in production techniques or information sharing on commod- ity prices, for which an additional nonmember participating in the training or sharing incurs little in the way of incremental costs. For example, a study by Bernard, de Janvry, and Sadoulet (2010) finds that among cooperatives in Burkina Faso, there is a tendency to provide services to nonmembers as a way of assuring acceptance of the cooperative in its village communities.
Activities Indirectly Beneficial to Nonmembers
Nonmembers may also benefit from unintended consequences of cooperative activities. For example, if an RPO successfully bargains for higher prices for its members’ output, local commodity prices that are offered to nonmembers may also increase as a result.7 Similarly, if an RPO contributes to public goods that serve their members and are nonexcludable to nonmembers (such as the construction of local roads, schools, or health centers), then nonmembers are indirect beneficiaries of the RPO’s contributions. In both cases, nonmembers may enjoy indirect benefits from the mere existence of the cooperative—a benefit they cannot be prevented from enjoying.
We investigate the relevance of this classification in Table 4.6. Both the activities undertaken by the organizations and the extent to which non- members may benefit are given in the table. As expected, when activities are unambiguously associated with economies of scale, the corresponding service is often open to nonmembers. Such is the case for input provision services by cooperatives: nonmembers have access in the majority of cases. We also find that nonmembers tend to benefit from activities neutral to nonmembers, such as training (for instance, HIV/AIDS awareness and prevention) or the dis- semination of price information. Regarding the latter benefit, it is interesting to note that, even if the cooperative is not willing to provide such services to nonmembers, it is likely that outsiders would access it anyway, given the nonexcludable and nonrivalrous nature of information. Although only 27 percent of the cooperatives share price information formally beyond their member- ship, in 56 percent of the cases, outsiders can access it informally—through friends and family networks, for instance. Similarly, although robust empiri- cal estimates are lacking, it is often reported that the simple presence of a
7 This effect may be particularly important in the case of input provision, where markets are often characterized by monopolistic competition. In these cases, RPOs tend to provide their members with inputs at cost, thereby exerting a downward pressure on the prices that other input suppliers can ask.
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