The first part of the paper describes steps which Tanzania took in order to provide key social services to her people. Tanzania made great efforts within the ujamaa socialist system to provide free social services for rural as well as urban people, regardless of their income level. Even after the decline of Tanzanian economy the party-led government tried to maintain and improve social services but nonetheless could not prevent the deterioration of the education and health services nor that of the water and sanitation systems, which had been built with the assistance of foreign development agents. The paper analyses the export liberalization measures, the different phases of economic recovery programmes, the structural adjustment programme with its priority social action, and the recent World Bank Human Development Programme. The second part presents a case study of social services provision in two south-eastern regions of Tanzania, Mtwara and Lindi, which on the basis of statistics are among the poorest in the country. The study and the analysis of the new emphasis on decentralization and on local government which follows in the latter part of the paper, are based on the first-hand field experience of the author. Following the section on new participatory bottom-up experiments, describing the partnership of the World Bank and several foreign development agents, the paper brings out the basic contradictions between the 'traditional' and the 'modern' in social services provision and the difficulty that any development efforts face in trying to integrate people's own understanding and practice of sharing in service provision with the externally introduced models. The different ways in which rural people do share in giving services are elaborated, and it is shown that credit must be given to these sharing practices, as new systems of cost sharing are developed. The conclusion brings out the need to make detailed analyses (based on participatory action research) of the division of wealth in rural communities so that those already heavily involved in self-help work or who provide many kinds of services, can be identified and their contributions registered. The people who belong to the wealthy quintile but manage to escape regular cost-sharing practices, need to be identified and charged according to their means.