Public service delivery that is aimed at promoting sustainable livelihoods needs to have efficiency and community participation as some of its fundamental principles. Current development practice tends to emphasise the former rather than the latter. This article attempts to articulate the findings of a research into service delivery for poverty alleviation in South Africa, based on a particular community development endeavour (the Working for Water Programme) in a specific South African rural village. The research found that a market oriented vision of service delivery, which places a lot of emphasis on efficiency, could easily erode participation of the general community with negative consequences for sustainability of community development programmes. The article recommends that the efficiency principle be advanced within a people centred paradigm, through greater participation of local structures equipped to handle and realise gen