This thesis questions why participatory development programs fail. This thesis argues that institutional differences - divergent established and organized norms or rules that govern groups of people - persist within and disrupt the relationship between development actors and participants. Therefore, the greater the degree of institutional differences held between development actors and local participants, the greater the likelihood that the participatory development program will fail to fully empower it’s participants. This prediction is tested in case study analyses of two participatory development projects in Ethiopia: Participatory Forest Management (PFM) pilot projects implemented in the Bonga and Chilimo forests by Farm Africa, a U.K. based development organization, and the Pastoral Community Development Project (PCDP), run by the country’s Ministry of Federal Affairs (MoFA). This thesis finds that the PFM pilot projects failed to fully empower forest-dependent communities as the result of large institutional differences between Farm Africa and the communities in question. On the other hand, small institutional differences between the MoFA and pastoral communities lead to the successful empowerment of pastoralists at the conclusion of the PCDP. These findings demonstrate that institutional differences between development actors and local participants are ultimately a contributing causal factor to participatory development failure.