This study comparatively analyzes the institutionalization of social enterprises in the care services sector in South Korea and Quebec, focusing on the institutional conditions and political processes through which these organizations have been shaped...
This study comparatively analyzes the institutionalization of social enterprises in the care services sector in South Korea and Quebec, focusing on the institutional conditions and political processes through which these organizations have been shaped. Rather than treating social enterprises merely as organizational forms or policy instruments, the study conceptualizes them as outcomes of political interactions in which the roles of the state, the market, and the third sector are reconfigured in the course of welfare state restructuring. In particular, it examines how social enterprises have acquired—or failed to acquire—institutional status in the care sector, an area characterized by low economic profitability but high public-interest externalities.
The study adopts historical institutionalism, drawing specifically on Mahoney and Thelen’s theory of gradual institutional change as its analytical framework. Within this framework, the development trajectory of social enterprises in South Korea’s care sector is interpreted as a case of institutional drift, while the Quebec cases are analyzed as instances of institutional displacement in childcare and institutional layering in elder and domestic care services.
The comparative analysis shows that both South Korea and Quebec experienced similar structural pressures from the late 1990s onward, including economic crises, rising unemployment, population aging, changes in family structures, growing care demands, and constraints on public finances. In both contexts, the concepts of the social economy and social enterprise emerged as policy alternatives aimed at addressing unemployment, poverty and lack of social care while promoting the social integration of labor-market outsiders.
Despite these common starting points, however, the institutional positions and growth trajectories of social enterprises within care service delivery systems diverged significantly. These differences cannot be adequately explained by variations in welfare regime types or policy instruments alone; rather, they stem from differences in how the institutional identity of social enterprises was defined, how state–civil society relations were structured, and how legitimizing discourses were constructed.
In South Korea, social enterprises became institutionalized as administratively certified entities through the enactment of the Social Enterprise Promotion Act (2007), with policy design led primarily by the Ministry of Employment and Labor. In this process, social enterprises were positioned as subordinate tools of labor market policy aimed at expanding employment for disadvantaged groups, while care services were treated as merely one of several demand sectors. Social service delivery systems expanded in a fragmented manner across multiple ministries, including the Ministry of Health and Welfare and the Ministry of Gender Equality and Family, and within these sector-specific policy logics, social enterprises failed to become institutionalized as official service providers.
As a result, social enterprises were structurally excluded from public care systems and forced to compete in the general service market with for-profit providers under identical conditions. In the case of home-based childcare services, social enterprises were excluded from the public service domain overseen by the Ministry of Gender Equality and Family, while in quasi-markets such as maternity and newborn care services and long-term care insurance, formal entry was permitted but without any differentiated support mechanisms except temporal(max 5 years) government supports including partial wage subsidy.
Against the backdrop of the informal characteristics of personal care service markets, this institutional configuration transformed the core norms of social enterprises—direct employment, democratic governance, and public-interest-oriented service provision—into structural cost disadvantages. Over time, this led to the contraction of social enterprises in the care sector. This trajectory constitutes a paradigmatic case of institutional drift, in which formal rules remained intact while failing to adapt to changing policy environments in care provision.
In contrast, in Quebec, social enterprises were institutionalized under the broader umbrella of the social economy prior to the establishment of explicit legal definitions. Following the 1996 Summit on the Economy and Employment, social economy organizations became recognized as official partners in public policy through corporatist policy coordination processes. The non-substitution principle agreed upon at the Summit—stipulating that social economy organizations should not replace public-sector services—functioned as a key normative foundation, enabling social enterprises to secure legitimacy as third-sector actors that complement, rather than privatize, public services.
Building on this institutional consensus, the Quebec government formally positioned social economy enterprises as quasi-public service providers in core care sectors, including childcare (CPEs) and domestic and home-care services (EÉSADs), and created protected markets that combined direct operating subsidies, price regulation, and demand-side support. This represents an instance of intentional institutional change that reorganized previously mixed service delivery systems around nonprofit social economy actors.
In the childcare sector in particular, the Centre de la petite enfance (CPE) model constitutes a paradigmatic case of social economy organizations being incorporated into the core of public policy delivery. Nonprofit parent-cooperative childcare centers, recognized as social enterprises, expanded to become central pillars of the public childcare system through substantial public funding and legal regulation, producing a market-restructuring effect that constrained the expansion of for-profit providers.
In elder and domestic care services, Quebec designated these activities as protected domains for social economy enterprises (EÉSADs) and ensured stable revenue structures insulated from market competition through exclusive user subsidies, operational funding mechanisms, and institutional linkages with public home-care delivery systems (CLSCs).
Through these processes, social enterprises became not marginal niche providers but new standards for public service provision. This transformation was made possible by the Summit’s role as a multilateral social bargaining arena, which constrained potential veto players in advance and minimized the scope for bureaucratic discretion to distort the direction of institutional change during implementation.
The comparative analysis of market structures and competitive environments demonstrates that the institutionalization of social enterprises in care services is not simply a matter of organizational competitiveness or managerial capacity, but fundamentally a product of legitimacy politics and coordinative discourses. In Quebec, a powerful coordinative discourse emerged that linked service quality, accessibility, and the financial sustainability of social enterprises, enabling political compromises that institutionalized social enterprises as core partners within the public care system.
In South Korea, by contrast, the public character and institutional necessity of social enterprises as care service providers were never fully legitimized. Although partial efforts to justify social enterprise models emerged through opposition to market liberalization in maternity care services and movements for the institutionalization of hospital respite care work, these initiatives failed to secure strong political support within policy communities. Consequently, social enterprises remained at the periphery of the care system, unable to attain institutional citizenship.
At the same time, the comparative findings indicate that institutional trajectories are not fixed outcomes but contain internal tensions and potentials for change. In South Korea, despite following a path of institutional drift, care-sector social enterprises continue to demonstrate relatively high employment creation at the organizational level, and many have transitioned into social cooperatives in order to strengthen democratic governance and community embeddedness. This suggests that, despite institutional marginalization, social enterprises remain potential agents of future institutional change by reconstituting social solidarity economy principles at the organizational level.
Conversely, in Quebec, the quasi-public social enterprise model represented by EÉSADs and CPEs faces a structural dilemma arising from its strong dependence on government funding. As service demand and organizational revenues are tightly coupled with public subsidies and price regulation, these organizations tend to prioritize budget maintenance and institutional reproduction over service innovation and strategic autonomy, raising concerns about identity dilution and constrained innovative capacity.
This contrast highlights that social enterprises in South Korea and Quebec are embedded in distinct problem structures—respectively, potential under institutional drift and rigidity under institutional success—and suggests that the institutionalization of social enterprises in the care sector should not be understood through a binary lens of success and failure. Rather, it reflects divergent political and organizational dilemmas produced by different institutional designs.
The study thus underscores that successful institutionalization of social enterprises in highly public service domains such as care requires not only sector-sensitive policy instruments but also political and discursive processes that legitimate social enterprises as integral components of public policy. By applying gradual institutional change theory to the concrete policy field of care services, this research contributes theoretically and empirically to a more fine-grained understanding of the micro-dynamics of institutional change and power relations in social enterprise governance.