There has been a renewed interest in the role of small towns in rural and regional development driven by recent socio-economic and political changes at the national and international levels involving democratisation and local government reforms, structural adjustment and economic reforms, and a general trend favouring participation or 'development from below'. As urban centres closest to rural communities, small towns are perceived as: important and efficient nodal points for linking or connecting rural producers to national and international markets; centres for locating social services within relatively easy reach of rural communities, and centres for the transmission of government policies and modernisation. Within this perspective has also emerged the increasing recognition that rural and urban areas do not exist as 'islands' but are linked by flows of people, goods, services, and information (spatial linkages) and sectoral interactions (employment and occupations, such as rural non-farm employment and urban agriculture). These spatial linkages and sectoral interactions between rural and urban areas are also increasingly recognised as critical survival and accumulation strategies for the poor and the rich respectively in both rural and urban households.While many studies have emphasised the promotion of small towns, they also note that the ability of small towns to play any meaningful role in regional development and ruralurban interactions depends on functional local government systems with adequate resources and authority. This requires decentralised development approaches that are driven by local needs and priorities with the active participation of all stakeholders. For the past decade and half, Ghana has implemented a decentralisation programme that has required the transfer of financial and infrastructural resources, as well as power and authority to the district level. District capitals, defined in this study as small towns, have become important focal points as stimuli to district development under the programme. It is envisaged that rural-urban linkages between a district capital and its hinterland (district) will have positive impacts on both spatial units, and consequently the overall development of the district.While various studies have been done on small towns and rural-urban interactions in developing countries not much has been done on small towns within a decentralised political, administrative and economic context. Besides, in the context of Ghana, although in the implementation of decentralisation policies district capitals have been recognised as iii important, not enough theoretical work has been done on their role in rural and regional development and to place this within the various models and theories on urban centres within the fields of urban studies and regional development. As a result, adequate evaluation of district capitals and their role in the decentralised development process as a basis to unearth contradictions, inefficiencies and weaknesses of the strategy is yet t...