Summary. This largely methodological paper focuses on how to define the social economy and its governance at the local and especially the urban neighbourhood level. A distinction is made between essentialist and holistic definitions. The second section appraises the potential contribution of various current ideas in institutional economics and economic sociology to the definition of the social economy and its governance. It is found that ‘old ’ and ‘new’ institutionalism in particular offer useful tools, including the holistic methodology as applied by John Commons. The third section elaborates on the analytical elements required for defining the social economy from a holistic perspective, stressing the role of essentialist abstract categories, the role of local culture and articulation between spatial scales. First, we show how the notion of social capital defined through a ‘holistic approach ’ can enrich the definition of the social economy. Secondly, we stress the importance of empirical investigations in feeding into the holistic definitional work. The fourth section concludes the paper by enhancing the necessary dialogue between an abstract-essentialist and a contextualised holistic definition of the social economy at the neighbourhood level
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