Conventional development/underdevelopment theory focuses on micro economic problems such as low savings ratios, high debt, limited capital, low levels of education and inadequate technology. While First Nations face many similar concerns, technically, their position within Canada should afford them easy access to standard development tools. Yet this has not been the case. Although the Canadian Government has been orchestrating economic development efforts for First Nations in Canada for well over one hundred years, there have been very low real success stories. First Nations remain the single most under developed aspect of the Canadian economy. The main objective of this work is to delineate the theoretical foundations for the failure of federal economic development policy for First Nations, focusing on Manitoba. By examining a number of different economic development models and then measuring them against the recent economic development policies of the Federal Government, the paper seeks to establish cleartheoretical reasoning for development failures in First Nations communities. (Abstract shortened by UMI.)