Willingness to cooperate in the context of post-communist economy – Why do local rules matter?

Abstract In developing and transition countries, cooperation among farmers still remains limited, despite the need to tackle the constraints related to small farm sizes. The cooperation literature highlights several factors that affect farmers’ willingness to cooperate. On the other hand, there is limited research on the indirect role of local rules on cooperation. This paper aims to contribute to this gap by analyzing the factors that affect farmers’ willingness to cooperate by examining the mechanisms through which local rules affect cooperation. Cooperation remains a fairly broad spectrum, and there is limited understanding about the Albanian case as a post-socialist economy which is dominated by small and fragmented farms. The research is based on a structured survey with dairy farmers implemented during 2017 and structural equation modeling is employed to test study hypothesis. Results show that the role of local rules has an indirect effect on cooperation through social capital. Further, the presence of leadership skills, reputation, and reciprocity appear to be key determinants of farmers’ willingness to cooperate.