Community development and economic development in rural areas increasingly go hand in hand. Today, counterpoint to purely free market approaches to economic development -- in which large multinationals are the primary engines of change -- calls for more local decision-making and more locally based economic ventures. At the center of this new approach is strong community commitment to provide resources and information, overcome collective action problems, and improve the functioning of local labor markets. Enhancing community agency, or the capacity for collective action, therefore plays a significant role in effective community and economic development. Communities must focus on development both in communities (job creation, infrastructure improvement) and of communities (enhancing local problem-solving capacities). Kenneth Pigg and Ted Bradshaw, in their chapter in "Challenges for Rural America in the Twenty-First Century", outline a new model of community development, assembled from a collection of approaches. In this new "catalytic development" model, the emphasis is on mobilizing local talent and leveraging local resources and networks to find local solutions, and ultimately foster development in and of communities. 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.