Many small communities in Southwestern Ontario suffer from economic decline. Several areas have faced devastating plant closures and layoffs. In response, communities have been encouraged to adopt a community economic development strategy by senior levels of government. This strategy focuses on community participation, entrepreneurship and the retraining of the workforce. This thesis examines the accomplishments of eight predominantly rural areas in Southwestern Ontario. Attitudes and perceptions of sixty-four local actors involved in the CED process were evaluated. These eight areas received similar levels of funding and all have mechanisms in place for community economic development. However, the extent of CED activities in each community was quite different. Why? In order to answer this question local participants were interviewed to determine to what extent they thought their communitys progress was related to four dimensions of collaboration: economic viability, local participation, organizational interaction and political efficacy. Local participation, and political efficacy were identified as prerequisites to progress.