An Integrated Cooperative Development Approach for Sustainable Economic and Social Development : Can the Basque Region and Northern Italy Regional Development Experiences be Replicated in Croatia and Elsewhere in Southern Europe?

The last thirty years or so has seen the commercial or ‘new wave' microfinance model rise to dominate the local financial systems in both developing and transition countries alike. Initially inspired by the Grameen Bank model that emerged in Bangladesh in the 1970s, but later refined to more fully incorporate standard neoliberal commercialisation imperatives, the microfinance model is now the most visible local financial institution around. Recently, however, the enormous hype surrounding the microfinance model has been pushed aside and the concept has been coming under much greater scrutiny than ever before in terms of its real, sustainable economic and social development impact. This paper looks at a local financial systems model arising in Western European practice that, in contrast to the commercial microfinance model, is unequivocally associated with sustainable regional/local economic and social development and equitable growth. The author argues that this ‘integrated cooperative local financial systems model' should have had, and should still have today, enormous implications for new EU members and soon-to-be-EU- members, as well as other transition countries, still seeking to construct local financial institutions that are capable of establishing genuinely equitable and sustainable regional/local economic and social development trajectories