The political science literature on Kuwait generally focuses on political institutions, political economy, and external threats to explain social change (Herb 2014, Yom 2016, Freer 2018). Foremost among the investigations is the study of how and under what conditions oil wealth payoffs have impacted the social, economic, and political structures of the small Gulf state. Yet there is a gap in the literature concerning the historical context of payments themselves, including the governance policies and the institutions used to distribute them. The most prevalent distributive institutions in Kuwait are the ‘cooperative societies’ which have been the major distributor of food (approximately 80% of all retail trade), textiles, and a wide variety of other neighbourhood services since the 1940s. Yet ‘coops’ serve multiple other functions, most importantly as municipal social centers, springboards for parliamentary election campaigns, and potential sources of campaign funding. Interestingly, they also have democratically elected boards and decision-making is carried out at the local level by a board of directors and general assembly. Coops are such central institutions that even when the Kuwaiti state was destroyed by the Iraqi invasion and occupation in 1990 they survived and even flourished. According to Kuwaiti resistance source interviews the “Iraqi army wanted coops to be working so that they could show that life in Kuwait was normal and that everyday life was uninterrupted.” Since the 1990s repeated attempts by the state to limit the independent power of coops by increasing state oversight or privatizing individual cooperatives have failed. In this paper the author traces the history of the coops in Kuwait from the early 1940s by middle class townspeople to the present. The focus is on explaining how cooperative ideals, payments, and the larger Kuwaiti community were shaped over time by external Hungarian, Egyptian, and Russian socialist influences and Kuwaiti middle class social norms of Old Kuwayt town. This assists in explaining the context of the primary institution for transfer payments in Kuwait, the payments themselves, and the underpinning socio-political norms of modern Kuwaiti society. This paper is an important contribution to the literature as it provides critical new information about society in Kuwait by illustrating a new narrative for the development of middle class identities, coalitional politics, and how payments work contextually. The author conducted extensive in-depth fieldwork, qualitative interviews, and uncovered many new empirical sources that substantiate these claims as part of their ongoing dissertation work.