Arguing that consultative and authoritative frameworks for rural development programs allow those in a superior position to define development priorities and to determine when and to what extent those in subordinate positions can participate, this paper outlines the need for participative-group management of such projects. The paper notes that development planning based on exogenous knowledge alone is necessarily nonparticipative, and argues that both exogenous and indigenous knowledge and information relating to the issue to be decided must be shared. The paper suggests that Third World development projects fail because they are, paternalistically, based almost exclusively on ethnocentric Western theories, and on Western economic rationality, which is far removed from the logic that governs economic operations in low-technology nations. The paper proposes that both parties in the development enterprise need to assimilate the logic underlying both the indigenous and the exogenous knowledge systems. After citing examples in which the failure to incorporate indigenous world views into the design of third world development interventions produced misunderstanding and alienation for the local people and inhibited participation in follow-up projects, the paper observes that changes in the old ways of doing things can only have lasting and satisfying results if they come from within the culture itself. The paper concludes that as Western development agencies embrace local knowledge, local peoples can cease being clients and become partners. (Twenty-four references are attached.) (JG)