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 could nonetheless not prevent the deterioration of the education and health services nor the water and sanitation systems, built with the assistance of foreign development agents. I analyse the effects on the services of export liberalisation measures, different phases of Economic Recovery Programmes, the Structural Adjustment Programme with its Priority Social Action Programmes, 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 is based on first hand field experience as is also the analysis of the effects of the new emphasis on decentralisation and local government which follows in the third part of the paper. After the new participatory bottom-up experiments, in which the World Bank and several foreign development agents are partners have been described, the fourth section of the paper brings out the basic contradictions between 'traditional' and '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. I bring out different ways in which rural people do share in giving services and show that credit must be given to these sharing practices when new systems of cost sharing are developed. Tentative conclusions bring out the need to make detailed studies (based on participatory action research) of division of wealth in rural communities so that those already heavily involved in self-help work, or who provide many kinds of payments, would be identified, and work registers for their contributions made. The citizens who belong to the wealthy quintile but manage to escape regular cost sharing practices need to be approached and encouraged to contribute more, in addition to paying attention to the tax revenue collection.