This dissertation analyzes the historical experience of a World Bank funded integrated rural development project, the Wolayta Agricultural Development Unit (WADU), in southern Ethiopia. WADU’s operation spanned the last four years of the Imperial regime and the early years of the Derg, the left-wing military government. It therefore offers useful insights on issues of rural development, as theory and practice, and the dynamics of international development cooperation and the relationships of power and agency under two Ethiopian governments with radically contrasting ideologies. Based on a comprehensive analysis of a wide range of primary and secondary sources, and oral interviews, the study sheds light on the interrelationship between local, national and global forces in a broader context of Ethiopian history and from a long-term perspective, reaching back to the end of nineteenth century, in shaping the country’s rural development endeavors. Understanding the socio-economic and political traditions of the country in light of global developments helps to integrate the Ethiopian historiography and relate national literatures with the literature in African studies and international development. Conceptually, the study is framed within some of the most important debates in the history of development studies. In this regard, the study is set as a test of modernization, dependency and post-colonial, ‘post-“development”’ theories, although the emphasis is on assessing elements of post-development theory based on evidence derived from the project’s experience. The study argues both for a more historically-grounded appreciation of peasant agency in development processes and for a balanced assessment of the role of international and national actors and interests in development policy i.e. without placing too much emphasis on any one actor or ideological force.