The massive challenge of preparing cities to meet the 21century has prompted the emergence over recent years of a remarkable and radical international consensus. At the heart of this is how all city dwellers, particularly the vast majority with subsistence incomes, no security and very little power, can gain a stake in the future of their cities. Cities cannot be successful – economically, politically or culturally – if the divisions between rich and poor continue to widen, if the poor are disenfranchised and have no rights to their land and if they have no voice or form of self-organisation. The solution to sustainable development in cities is for poor people to be allowed to assert their own rights, and increasingly to organise themselves to provide their own services and infrastructure. Successful systems of urban governance depend on people power. This consensus is not simply that of a fringe group of radicals, but the analysis that emerged five years ago in Istanbul at the meeting of 171 governments for Habitat II, the City Summit (the Second United Nations Conference on Human Settlements). The terms "participation" and "partnership" had been used since the 1980s to mean very different things, such as the privatisation of services and the contributions made by poor people to their costs. The type of partnership widely seen today as crucial to good governance and poverty reduction involves poor people participating with government in policy and decision-making as well as contributing to implementation and costs. Often the private sector is also involved. But successful privatisation of services like water also depends on meeting the needs of the poor, and the role of government is to ensure and facilitate this. If they are ignored, fiascos like Bolivia’s Cochabamba water privatisation occur – where protests against steep price hikes by the private consortium led to the government rapidly rescinding the contract. Successful privatisations involve consultation and choice for the poorest citizens, with crosssubsidisation or differential levels of services to keep prices affordable. The proposed extension of the scope of the World Trade Organisation’s GATS (General Agreement on Trade in Services) may constrain governments’ policy choices in such service provision.