Access to rural services is a promising strategy for increasing people’s productive capacity resulting in the promotion of human development and poverty reduction. However, the Paradox is that in some communities’ service provision has worked to get the poor out of poverty where as in other communities services have not. In this paper, we present empirical evidence to explain this paradox based on qualitative case study research of four rural communities in Uganda. Evidence shows that communities with reduced poverty levels had high level of collective action. Communities with high poverty levels preferred mostly access to extension services, microcredit services and increase security to improve livelihoods and reduce poverty. Leadership played a critical role in improving the performance of rural services. In the absence of security all other services are not likely to work for the benefit of the poor. Lastly, the lack of well defined property rights of land tenure system and reduced access to land acted as a disincentive limiting investment opportunities increasing poverty levels even if service performance was high.