AbstractGovernments in developing countries will face serious problems in extending basic social services, public facilities and infrastructure for their rapidly growing urban populations during the next decade. The steadily increasing concentration of the poor in cities will exacerbate already severe strains on urban services. Innovative solutions will be needed to meet the growing demands for urban services. In addition to expanding national and municipal efforts, governments in developing countries must also explore alternative policies and organizational arrangements for meeting the basic needs of their urban population. Among the potential alternatives are: using market surrogates to improve service delivery; lowering the costs of service provision through changes in regulations and controls on urban development; actively supporting self‐help and service upgrading schemes by the poor; promoting public‐private co‐operation and private sector participation in service delivery; increasing effective demand for services by promoting employment and higher incomes; and enacting and implementing policies that attempt to redistribute migration to small and intermediate‐sized cities. Each alternative has advantages and limitations that planners and policy‐makers must take into consideration in forging effective urban development s