Inspired by the best-selling "Reinventing Government", governments at all levels have decentralized programs and services and introduced market-based competition into operations. The goal of decentralization and privatization is to enhance civic participation and harness the market efficiencies that competition can offer. Decentralization and competition have certainly led to efficiencies and innovation. However, as Mildred Warner argues in her chapter in "Challenges for Rural America in the Twenty-First Century", many rural communities with limited resources have been overwhelmed by this new focus on market competition and decentralization. These two forces have reduced small local governments' ability to produce and deliver services, administer municipal functions, and plan and execute strategies for further development. The pressures risk exacerbating inequality between rural and urban areas as rural governments with limited means fall even farther behind wealthier communities that can compete more successfully for development, tax base, and contracts with private-sector service providers. This issue brief is a joint product of the Rural Sociological Society and the National Coalition for Rural Entrepreneurship, a collaboration of four Regional Rural Development Centers: The Northeast Regional Center for Rural Development, the Southern Rural Development Center, the North Central Regional Center for Rural Development, and the Western Rural Development Center. Funding was also made available from the Ford Foundation. This brief is part of a policy brief series by the Rural Sociological Society and the Regional Rural Development Centers that stresses the importance of community collective action and developing the capacity of people and organizations to meet the community's needs The Rural Sociological Society and the Regional Rural Development Centers creates new Public Policy Issue Brief series based on its recent book, "Challenges for Rural America in the Twenty-First Century". The briefs synthesize the context and substance of important issues raised in the book and address alternative policy options, with the goal of bringing important research to the policy community.