This thesis explores the elements of community economic development planning and implementation, how these elements interact, and how they affect the results of economic development initiatives. The resulting theory contributes to our knowledge of how to assist in understanding, planning, implementing and intervening in community economic development.The research for this thesis consisted of a series of exploratory interviews, followed by two case studies of recent economic development planning initiatives in rural Ontario. The interviews and planning documents from the initiatives were analysed using grounded theory methodology.The resulting grounded theory is formulated in the language of systems dynamics. This allows the variables developed from the research to be related to each other in meaningful ways to explain and predict behaviour in community economic development planning initiatives and to guide intervention in such initiatives.