Abstract: Efforts aimed at urban poverty reduction and service delivery improvement depend critically on slum dwellers’ collective agency. Adding to a long history of community participation approaches, there is a now growing incidence of so-called ‘partnerships’ between municipal agencies, non-governmental organizations (NGOs) and slum organizations. Such approaches require a fair representation of a majority of the poor by local community-based organizations (CBOs), the potential and interest of both poor men and women to organize pro-actively in collective action, and a CBO leadership that works for the common good. This article puts some key assumptions underlying grassroots-based strategies under scrutiny. That relations amongst the urban poor are unequal and that they are divided in terms of income, gender and ethnicity has been well documented, but there has been less attention for the fact that the poor, facing conditions of scarcity and competition, rely on vertical relations of patronage and brokerage which may hinder or prevent horizontal mobilization. Rather than being vehicles of empowerment and change, CBOs and their leadership often block progress, controlling or capturing benefits aimed at the poor and misusing them for private (political) interests. Presenting evidence from community-based projects in the slums of three large Indian cities, the article argues that municipal agencies, donors and NGOs cannot easily escape the logic of patronage and often themselves become part of a system of vertical dependency relations.