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In 2003 left-leaned President Luis Inacio da Silva (Lula) was elected with a promise to enable participatory forms of public governance, and implement redistributive social programs. In this context, the Movement of Solidarity Economy emerged from being a widespread but uncoordinated network to become a nation-wide alliance between workers and activists who had historically organized through associative economic practices. The emerging movement viewed the political moment as an opportunity to influence state institutions and society to adopting community-based, ethical economies models of development. In response to the movement, Lula created the National Secretary of Solidarity Economy to implement public policies of SE nationally. The term Solidarity Economy (SE) generally describes forms of community-based, people-driven and non-capitalist economic activities organized according to the principles of self-management and solidarity.
The goal of this paper is twofold. First, it seeks to provoke progressive movements, particularly the Movement of Solidarity Economy, to think critically about the tensions and potential contradictions that may derive from privileging a relationship to the State and overemphasizing the role of public policies oftentimes in detriment of building more politically and economically autonomous praxis of re-organizing society on the ground. Second, while examining the experiences of community banks and respective communal councils in urban favelas in Vitoria and Rio de Janeiro, we bring into conversation policy-makers, university-based incubators of SE, and SE entrepreneurs to discuss the process of territorialization of public policies of SE, and assess the role and potential of SE initiatives to foster development in marginalized territories.