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Introduces and explains the concept of sector-wide approaches, which involves a partnership between governments and all donors working in the health sector, whereby goals are jointly set, coherent sector-wide strategies are mutually agreed, funding is allocated in line with goals and strategies, and actions and responsibilities are collective, though ownership belongs to the government. The approach also calls for the concentration of funding on interventions of proven effectiveness, and the use of national systems for financial management, monitoring, and the procurement of goods and services. Although experience with the approach is limited, the author cites convincing evidence of its potential to overcome many long-standing problems in the provision of development aid. The strategy also responds to growing recognition that, when attempting to achieve sustained improvements in health, sector-wide approaches offer a better prospect of success than the piecemeal pursuit of separately financed projects. With this potential in mind, the author sets out a framework for understanding the strengths and weaknesses of the approach, the way it works in practice, the problems that are likely to arise, and procedures and mechanisms for overcoming these problems. Topics discussed range from the specific circumstances where sector-wide approaches are most appropriate, through ways of ensuring that investments reduce poverty and inequities, to the types of formal agreements needed to minimize misunderstandings. [Publisher's abstract, amended]