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In recent years, the endogenous development ( ED) approach has gained influence within the rhetoric of European rural development policies ( RP). This paper provides a fundamental critique of the approach and shows that neither the economic elements of RP in general nor ED in particular are targeted towards the specific economic needs and capabilities of rural areas. The second part of this paper consists of the search for possible alternative concepts for a more targeted and effective RP. Based on a synopsis of existing theories, an integrated approach is proposed that builds upon the different coordination mechanisms for economic activity suggested by different theories. The new, integrated perspective enables an economic characterisation of rural areas and indicates that the successful support of local coordination of economic activity is determined by specific local conditions. It also makes evident that localised approaches usually cannot compensate rural areas for the lack of agglomeration advantages. Therefore, programmes for the economic development of rural areas which support the local coordination of economic activity remain a second-best policy. As such, they do not free the state from policies of spatial redistribution if the political aim is the creation of comparable living conditions. [ABSTRACT FROM AUTHOR]