This dissertation examines the process of local development within the context of rural restructuring in British Columbia. In the absence of traditional sources of certainty, communities and governments increasingly hope that local development will contribute to the economy and to the society of rural areas. However, the complex nature of the changes rural communities are attempting to undertake challenges local capacity for action and places a heavier burden of responsibility on the local to directly influence the conditions of community and regional prosperity.The role of local development in the re-construction of rural space is attracting considerable research attention, building upon an existing body of work from Canada and elsewhere, which has been steadily refining our understanding of the role and practices of local development. Through a case study of two communities, Salmon Arm and Lillooet, this dissertation seeks to contribute to this body of work by examining the process, organizational structures, and relationships inherent in local development.I use staples theory and regulation theory as central components of a conceptual framework to offer a more systematic and theoretically informed study of the local development process. I use community economic development (CED) as a practical framework to guide inquiry into the local development activities of the case communities. Data for analysis includes interviews with representatives from local organizations and from local and senior governments. It also includes an analysis of the documents and records of local development organizations, newspaper sources, and community/regional profiles.Findings illustrate that the case communities responded to change in a systematic manner. The communities used local development both to explore avenues for economic diversification and to instill a degree of certainty into their local economies. The process and organizational response, in a practical sense, may be directly related to institution-building in a theoretical sense. Regulation theory provides a framework within which to forge a link between the practical dimensions of the local development process and the concept of building local institutions. Specifically, the development of a local mode of social regulation is dependent upon the stability and scope offered by a locally-based development institution.