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Entrepreneurship - BLOG

Community Imprinting: Why do some Communities Work better than others?

Henrich Greve |

It is possible to find a list of the best and worst-run cities in the US on the following blog: The best run city is Plano, Texas, followed by Madison, Wisconsin; the worst was San Bernardino, California, followed by Miami, Florida. How was the list made? To quote, “we looked at factors like the city’s credit rating, poverty, education, crime, unemployment, and regional GDP.” That seems a bit unfair. Poverty, unemployment, and regional GDP are outcomes of the local economy, which may be influenced by city government but is surely not run by it. None of these cities have a centrally planned economy.

But if it is not a list of the best and worst run cities in the US, it might be one of the best and worst functioning cities, by those criteria at least. That’s interesting to know, especially if you are planning to move to any of these cities. But then it would also be interesting to learn how stable the ranking is, because looking at the list the year you move would make no sense if it was reshuffled every year. And also, the list of criteria could be expanded if we wanted to know where to move: What about schools, voluntary associations, and cultural life?

As it turns out, communities are stable in how well they function, so looking at the list for one year helps a lot. Communities also have stable differences in voluntary and mutual associations. And remarkably, these features seem to be stable not just from one year to the next, but from one generation to the next. Yes, I wrote generation, meaning 30 years. In a recent paper in American Journal of Sociology, Hayagreeva Rao and I look at some of the past work on community stability in governance and community life. We also report our own research on how communities have stable differences in the founding of mutual organizations. We took data from Norway, where mutual insurance firms and savings banks were founded in many communities in the 19thcentury. Retail cooperatives (coops) were founded in many communities in the 20thcentury. We found that even as we controlled for every other difference between communities that we could measure, it was still true that pioneer communities in banks and insurance mutuals were also pioneers in coops.

This is important because it suggests community imprinting: some communities end up with more community organizations than others.  Because those organizations are made to improve the community, this obviously helpful for the residents. Imprinting may also occur for commercial organizations – we did not show that, but work like that of Pino Audia and coauthors suggests this effect. It means that we could be on our way to explaining some of the differences between the social, economic, and governance performance of nearby communities. What is the underlying mechanism? We think that community organizations create networks of trained activists who can use their skills to create other organizations. We also think that they leave a culture of community entrepreneurship. Now that we know about community imprinting – and it seems important, for how well communities work and where you should locate – we can look more closely at how it happens. That could be the next topic of research.

Audia, Pino G. , John H. Freeman and Paul Davidson Reynolds. 2006. Organizational Foundings in Community Context: Instruments Manufacturers and Their Interrelationship with Other Organizations. Administrative Science Quarterly, 51 (Sep), pp. 381-419.

Greve,Henrich R. and Hayagreeva Rao. 2012. “Echoes of the Past: Organizational Foundings as Sources of an Institutional Legacy of Mutualism.” American Journal of Sociology, 118 (3): 635-675.

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