The Thesis examines the dynamics of the Mondragon Co-operative system in the Basque Region of Spain, and assesses the implications which the system has for co-operative movements in other regions. The polarities of co-operative independence and interdependence at Mondragon are examined in the context of an increasingly competitive European marketplace. Shortcomings are identified in conventional Canadian regional development initiatives, which may be minimized through co-operative efforts in the marketplace. It is argued that historically Canadian co-operative members have lacked adequate legislative, commercial and financial resources as well as systematic organizational links with each other to become a significant third sector of the economy. A proactive approach is suggested for co-operative system development, as a means to enhance and expand the co-operative movement in Canada. The Mondragon experiment indicates that technical and financial support through interco-operative linkages can provide a near guarantee against later failure. The Caja Laboral Popular, Ikerlan, the L.K.S. and other support co-operatives, which are governed by the producer co-operatives, assist the producer co-operatives through losses due to changes in market conditions or other variables. At the same time, interco-operative collaboration permits co-operatives to achieve economies of scale which are lacking in Canadas co-operative tradition. The development process in the Basque region is facilitated by formulas designed to provide essential social and educational services, mitigate unemployment and provide lifestyle opportunities through economically democratic means. The thesis contends that while an abrogation of autonomy is a necessary component of co-operative growth and development, sufficient decision making options must be left in the hands of co-operative workers. Balancing the need for autonomy and the need for economic vitality at Mondragon has been a difficult and seemingly unresolved dilemma, particularly since the mid-1980s. While the recent reorganization of the Mondragon system raises serious questions about the future of worker participation in many spheres of the system, Mondragon is offered as a crucial component in the ongoing debate on the need for an economically as well as politically democratic community.