However, other changes to the status quo may be brought about by private partners who are aiming to minimise risk. Many of these changes do not occur in developed contexts, and as a result many international operators and advocates of PPPs have not yet understood social impacts. A particular concern for the poorest groups, for instance, is that private sector investment will only be undertaken in a formal context where risk can be limited by using legal contracts and regulations to form the basis of any action.
However, processes of marginalisation and the very structure of the lives of the poor often places them in an informal context - and this informality has become an important part of their survival and is a key aspect of the way cities work. By its nature, the international large-scale private sector is generally unable to tolerate the informality that characterises their lives. This means, for instance, that the private sector will not work with informal service providers or other informal actors (unless they are formalised). It generally discontinues the practice of illegal connections (often without mitigating action), and is constrained by the illegalities of land and housing. Generally, the private operator will seek a level of formalisation far beyond the reach of the poorest communities.
However, formalisation can also bring benefit to poor households. Not all informal service providers are trustworthy: many exploit the poor householder's lack of access to services, and the regularisation of informal service providers into a lawful local private sector may bring long-term benefit. Although formalisation may ultimately help to remove exploitation, ensure better quality and availability of services, and lead to a greater inclusion of low-income settlements, evidence suggests that there are mixed outcomes for the poor, and it must be recognised that this lengthy process is likely to affect the existing livelihood strategies of the poor, particularly the most vulnerable households and individuals.