Sustainable co-operation is considered as an essential tool for promoting regional development from a theoretical point of view, based on a public-private partnership type of interaction between regional actors. According to this view, the formation of such partnerships create a framework for co-operation, whilst their subsequent synergistic functioning constitutes an evolving co-operation process. This theoretical framework is applied in an effort to explain regional development and partnership functioning in two regional programmes during the 1990s, one in Australia and the other in the UK. Did they achieve desirable outcomes? Research fIndings have indicated somewhat mixed economic outcomes. However, a solely economic appraisal is inadequate. The formation and functioning of the two regional development programmes concerned is best comprehended as being driven largely by the political process and public policy considerations.