✅ Priority #1 — Technical Assistance (TA)
Municipal staff involved in implementation are paid from EU TA funds (Art.46 Reg.1083/2006). These salaries are legally redistributed as increased compensation. Net effect: municipality receives EU project funds WITHOUT spending own budget. This is the core argument for mayoral partnership.
✅ Priority #2 — Local Social Fund
Up to 30% of Local Social Fund can be allocated as co-financing if the project purpose is social (mobility, accessibility, digital inclusion). Eligible per ESIF 2021–2027 regulations. Does not affect distributable surplus.
⚠️ Priority #3 — Collective ICA Reserve (last resort)
For major strategic projects only. Requires General Assembly vote. Maximum 20% of reserve per project. Protects the cooperative's credit rating for future STO bond issuance (2027–2028).
🏭 Mondragon Cooperative — Benchmark Comparison
Mondragon Corporation (Basque Country, Spain): world's largest worker cooperative. Founded 1956. 70,000+ workers, 257 companies, €12B+ annual revenue (Wikipedia 2024). Less than 5% bankruptcy rate over 60 years despite Spain's severe financial crises.
RadicalxChange Plural Stack integrated into MobiCoop SCE governance architecture. Each tool maps directly to a structural need identified in the cooperative's founding philosophy (Wolff, Weyl, Buterin).
↓ exit tax 5% → Local Social Fund
Local Social Fund → QF rounds (max 30 projects) + QV allocation
IP contributions → PCO licensing (Celindra / FanCourier) + Shapley royalties
Membership → SBT / Human Passport (anti-sybil, Holonym)
Governance votes → QV (nuanced, 1-member-1-vote preserved for constitutional)
External capital → STO bonds (€100 min, MiFID II, 2027+)
Each member receives 100 voice credits per QV round. Cost of votes = votes². Prevents capture by majority while preserving preference intensity. Per Lalley & Weyl (2018), QV achieves utilitarian optimality that 1-person-1-vote cannot.
Cost Function
Why QV for the Social Fund?
• Minority cities with strong preferences aren't outvoted by majority
• Iași can express 10x preference for cycling infrastructure vs Cluj's mild preference for parking
• 1-member-1-vote preserved for constitutional decisions (statute changes, mergers)
• Piloted successfully: Edge City Lanna 2024 (Chiang Mai), 200+ participants
• CHI 2025 validated in cooperative co-housing context
30+ key terms from cooperative economics, mechanism design, and governance science. Each entry includes a plain-English definition, the mechanism (how and why it works), and an academic citation. Click any term to expand.
The Viable System Model (Beer, 1972) identifies five recursive systems every autonomous organization needs. This diagram shows which systems are human-controlled vs AI-controlled in the current target architecture (Phase 3). Click a phase below to update.
Click a phase to see how the VSM controller assignments change over time. Default: Phase 3 (AI-Delegated) — the current target architecture.
| Requirement | EU Regulation | Current Status | AI Governance Implication |
|---|---|---|---|
| General Assembly | SCE Reg. 1435/2003 Art.36 | ✓ Required (human) | Retained as S5 — QV-based democratic policy |
| Management Body | SCE Reg. 1435/2003 Art.37 | ✓ Required (human) | Proposed: AI as executive instrument under human policy |
| Supervisory Body | SCE Reg. 1435/2003 Art.39 | ✓ Required (human) | Ethics board + algorithmic audit trail |
| Human Oversight | EU AI Act Art.14 | 🤖 Required for high-risk | QV general assembly provides meaningful oversight |
| Transparency | EU AI Act Art.13 | 🤖 Required | All AI decisions logged on audit trail |
| Risk Management | EU AI Act Art.9 | 🤖 Required | Circuit breakers + algorithmic diversity |
| AI Literacy | EU AI Act Art.4 | 🤖 Required from Feb 2025 | Simulator serves as AI literacy tool |
Under current EU law, a cooperative must have human governance bodies (general assembly, management board, supervisory board). The AI cannot legally replace these — but it can serve as the executive instrument that carries out decisions made by members. Think of it like this: members vote on the destination (via Quadratic Voting), and the AI flies the plane. The EU AI Act requires that humans can always take back control — which is exactly what the emergency override clause guarantees.