THE CHALLENGE OF

CAPACITY DEVELOPMENT:
WORKING TOWARDS GOOD
PRACTICE

Based on DAC Network on Governance:

DCD/DAC/GOVNET(2005)5/REV1,
Feb.1, 2006
 CONTENTS

I. Why focus on capacity?

II. What has been learned?
III.From emerging consensus to better practice on the
ground
IV. Capacity development in fragile states
V. Moving Forward: Unfinished business
Annex 1: Vicious and virtuous cycle of empowerment
Annex 2: UNDP’s default principles for capacity
development
I. WHY FOCUS ON
CAPACITY
DEVELOPMENT?
 Growing consensus on aid effectiveness and
capacity

The 2005 Paris Declaration on The UN Millennium Project The New Partnership for
Aid Effectiveness and the Commission for Africa’s Development
Calls for capacity development Africa (NEPAD)
to be an explicit objective of Challenges the world to treat Identified capacity constraints
national development & capacity development with as a major obstacle to
poverty reduction strategies greater urgency sustainable development

Capacity Development:
One of the
most important
elements of
aid effectiveness

Without sufficient capacity, development efforts will not succeed

Challenge
• In recent years more than US$15 billion (1/4th of
donor aid) went to “Technical Cooperation”, most
of which dealt with capacity development
• Despite these investments, development of
sustainable capacity development remains one of
the most difficult areas of international
development practice
• Capacity Development one of the least responsive
targets of donor assistance
• 2004 Global Monitoring Report for MDGs reveals
that public sector capacity lagged behind all other
MDG benchmarks
Increasingly Difficulty
recognized
importance The Aim of the of achieving
Capacity
of Capacity Paper Development
Development
 Draws on
Intended audiences – evaluations &
broad range of analysis
development
practitioners

A framework for thinking

about capacity
A framework to guide development
& stimulate on-going
discussions

Concerns with
capacity issues in the
public sector

A basis for dialogue

between donors &
partner countries
Lesson Learned
• No quick fixes or easy formulas that work well in
all circumstances
• There is a set of core issues which improve the
results achieved in many particular settings
Basic Understandings
• Capacity – the ability of people, organizations
and society as a whole to manage their affairs
successfully
• Generic capacities – the ability to plan &
manage organizational changes & service
improvements
• Specific capacities – for e.g., public financial
management or trade negotiations
 Relationship between capacity &
performance

• Analogous to a motor car

• We maintain the car’s engine, chassis, brakes,
tires, etc – its capacity – because we value safe &
reliable transportation – the performance – it
provides
• In development, we are interested in factors that
make possible strong performance in relation to
development goals & MDGs, which requires a clear
understanding of the determinants
Capacity Development
• The process whereby people, organizations &
society as a whole unleash, strengthens, creates,
adapts & maintain capacity over time
• Not the same as capacity “building” which
suggests a process starting with a plain surface
and involving the step-by-step erection of a new
structure, based on preconceived designed
Promotion of Capacity Development
• What outside partners – domestic or foreign – can
do to support, facilitate or catalyze capacity
development & change processes
• Not equivalent to Technical Assistance or
Technical Cooperation
Relationship between Technical
Assistance & Capacity Development

Facilitating access
to knowledge

Brokering multi-
stake-holder
agreements Capacity
Technical Participating in
Development
policy dialogue &
Assistance advocacy
Providing
incremental
resources
Creating space for
learning by doing
 Importance of Capacity Development

Country Country
capacity Ownership
is the key is the cornerstone
to
Two
of aid &
Development connected observations development
Performance effectiveness
 Capacity

Level of Analysis challenge

is a
Governance
challenge

Individual level
(experience, knowledge & technical skills)

Systemic Influences by
factors, i.e., Organizational level means of
relationships (systems, procedures & rules) incentives it
between the creates
enabling
environment,
organizations
and individuals

Enabling environment
(institutional framework, power structure & influence)

Successful capacity development requires not only skills &

organizational procedures, but also incentives & good governance
 Building an
effective state

Promotion of
good
governance

Capacity Institutional
Development Development

Scope & limits

of Capacity
Development
II. WHAT HAS BEEN
LEARNED?
 History
• Capacity and capacity development issues on the
development agenda for ages, starting in the early
1950s
• Seen primarily as a technical process, involving
transfer of knowledge from the North to the South
• Overestimated the ability of development
cooperation to build capacity in the absence of
national commitment
• LESSON LEARNED: To be effective capacity
development must be part of an endogenous process
of change, with national ownership and leadership
as the critical factors
 Agreement on DAC
Principles for
Effective Aid
(1992)

“Shaping the 21st Century”

Paris Declaration OECD DAC paper
(2005) outlining a new paradigm
(1996)

The New Consensus

Capacity development
is the prime responsibility of
partner countries,
with donors playing
Rome Declaration
(2003)
a supporting role

Comprehensive Development
Framework (CDF)
Poverty Reduction (1998)
Strategy Paper (PRSP)
Initiative
(1998)
One of the most important element of
the new consensus

• Capacity Development is primarily the

responsibility of partner countries with
donors playing a supportive role
 The role of partner countries and
donors in capacity development

Partner Countries
Donor Countries
• Lead the process
• Mobilize financial &
• Set specific
analytical support around
objectives in
partner country’s objectives,
national
plans & strategies
development
• Make full use of
plans
existing capacities
• Implementation
• Harmonize support
through country-led
for capacity development
strategies
New emphasis on local ownership
• Recognition of the importance of political
leadership and the governance system to create an
enabling environment
• Ownership is processes & trends not the presence
or absence of a particular quality
• Ownership is not monolithic
 Forces influencing capacity
development
BLOCKING FACTORS - NEGATIVE FORCES

Systemic
factors, i.e.,
relationships
between the
enabling
environment,
organizations
and
individuals

FACTORS FAVOURING - POSITIVE FORCES

Conditions that make public sector
capacity difficult to develop
Lack of a broadly enabling environment
• Lack of human security & presence of armed
conflict
• Poor economic policies discouraging pro-poor
growth
• Weak scrutiny of the legislative branch on the
executive branch
• Lack of effective voice of the intended beneficiaries
• Entrenched corruption
• Entrenched & widespread clientelism or
partimonialism
Conditions that make public sector
capacity difficult to develop
Aspects of government ineffectiveness
environment
• Fragmented government with poor overall
capacity
• Absent, non-credible and/or rapidly changing
policies
• Unpredictable, unbalanced or inflexible funding &
staffing
• Poor public service conditions
• Segmented & compartmentalized organizations
• Only a formal commitment to performance-
oriented culture
Conditions favouring capacity
development in organizations
• Strong pressures from outside
• Top management provides visible leadership for
change, promotes a clear sense of mission,
encourages participation, established explicit
expectations about performance & rewards
• Change management is approached in an
integrated manner
• A critical mass of staff is involved
• Organizational innovations are tried, tested &
adapted
• Quick wins are celebrated
• Change process is strategically & proactively
managed
Summary of lessons learned
• Capacity development involves three levels - individuals,
organizational and enabling environment – which are
interdependent
• Capacity development goes well beyond Technical Cooperation and
training approaches
• Incentives generated by organizations & the overall environment is
critical for using skilled personnel
• Capacity development is necessarily an endogenous process of
change
• Focusing on capacity building of organizations make success more
likely
III. FROM EMERGING
CONSENSUS TO
BETTER PRACTICE ON
THE GROUND
 A framework for capacity development

Not a single,
STEPS LEVELS
once-only
sequence Individual Organizational Enabling
environment
Understanding
the international
and country
contexts
Identifying &
supporting
sources of A flexible, “best fit”
country-owned search for supporting
change
capacity development
Delivering
support

Learning from
experiences and
sharing lessons
 Individual level

STEPS
Understanding the • How is the availability of skilled & committed individuals shaped by
international and global & local push & pull factors?
country contexts • Under what conditions could diasporas contribute more strongly to
capacity development at home?
Identifying & • Are individual professionals able to be mobilize?
supporting sources • Are donor sufficiently responsive to restoring salary levels in key
of country-owned posts?
change
Delivering support • Do training components take full advantage of the potential of ICT?
• Are the training components linked to increasing organizational
effectiveness and putting new skills to use?
Learning from • Does the follow u goes beyond knowledge & livelihood benefits?
experiences and • Is it tracking the effects on organizational capacity & performance?
sharing lessons
 Organizational level

STEPS
Understanding the • How are capacities currently shaped by the informal & “political”
international and aspects of organizations?
country contexts • Are these features generalized or variable across organizations or
organizational spheres?
• Are there private-sector pressures & resources that can be mobilized?
Identifying & • Is capacity development an explicit objective of a plan or policy
supporting sources benefiting from country ownership?
of country-owned • Is there effective ownership initiatives within particular
change organizations or organizational spheres?
Delivering support • Have the objectives been clearly defined in terms of desired capacity
development outcomes?
• Have the inputs & service providers selected with the view to cost &
effectiveness or the decisions been supply-driven?
Learning from • Is the achievement of outcomes effectively monitored & fed back into
experiences and the process?
sharing lessons • Do the monitoring arrangements include proxy measures with
appropriate involvement of clients or service users?
 Enabling environment

STEPS
Understanding the • What are the historical & contemporary factors underlying weak
international and “political will”?
country contexts • How are power structures & formal & informal institutions changing
and with what effects on politicians’ incentives?
Identifying & • Does the interaction between donors and country actors form a
supporting sources “virtuous circle” or a “vicious” circle?
of country-owned • Are there ways donors can encourage effective demand within the
change country for capacity development?
Delivering support • Are the donors promoting changes in the institutional environment
for capacity development?
• Is support being delivered in ways that enhance, or undermine, the
possibility of organizations’ learning y doing?
Learning from • Is there monitoring of changes in institutional rules & how it has
experiences and come about?
sharing lessons • Is there independent, objective monitoring pf the mode of delivery?
Understanding the international & country contexts

• A good understanding of context is fundamental

• Country political economy studies provide a valuable first
step
• Important to get beneath the surface of the organization,
looking for both formal & informal, hidden aspects
• Identify the relevant stakeholders
• Donors should consider whether their own government’s
policies are part o the problem
• Consider the role of the diasporas
Identifying & supporting sources of country-owned
change

• Country ownership needs to be treated as a process

• The interaction between donors & domestic actors can
generate either vicious or virtuous circles of change
• Donors should encourage the “effective demand” for public
sector capacity
• Modalities of donor support should encourage and
strengthen initiatives benefiting from country commitment
• Capacity needs assessment a useful entry point
• Choosing the right organizational cope is as important as
selecting the right organization
• Some organizations are more crucial than others
Delivering support
• The enabling environment is still relevant when
specific design issues are considered
• Technical cooperation is effective when pooled and
coordinated
• Donor-instigated Project Implementation Units
(PIUs) should be avoided whenever possible
• Agreeing the desired outcomes of capacity
development is crucial
• South-South learning should be encouraged
• Large new investments in training capacity may
be justified
Lessons learned about capacity
development through long-term training
• Better to aim at institutional changes in key organizations
than focus on improving the capacity of individuals
• The gains in long-term training includes work attitudes,
critical thinking, self-confidence, etc.
• Having a critical mass of staff in the same organization
trained abroad in the same country make changes more
possible
• Costs and benefits of different training options must be
determined
• Follow up support in organizations essential
• Long-term commitment by donors is critical

Source: USAID’s African Graduate Fellowship (AFGRAD) and

African Training for Leadership and Advanced Skills
(ATLAS) Programme
Learning from experience and sharing
lessons
• Capacity development initiatives should maximize learning
• Further lessons must be extracted about what works and
what does not in terms of changing the enabling
environment
• Monitoring should also look into whether donor support is
delivered in a way that assist country ownership
• An independent form of monitoring, capable of generating
objective judgments is required
• Select and apply measures of achievement
• Collect the views of intended clients or end-users
• Individual assessment is not just about skill enhancement
Summing up on operationalising the
new consensus
• General formulas models do not produce
sustainable benefits
• Approaches that achieve a best fit with the
particular circumstances of the country, sector or
organization is needed
IV. CAPACITY
DEVELOPMENT IN
FRAGILE STATES
Fragile States
• Most difficult aid environments that are being
neglected by the international community
• Countries recovering from conflict
• Regimes that are chronically weak or in decline
• Capacity development must prioritize on reducing
fragility
General principles for working in fragile
development environments
• Development partners need to be highly selective
in the instruments they use for capacity
development
• Must understand the country context and focus on
an approach suitable in the specific circumstances
• Must be realistic about their expectations
• Donors need to identify likely partners and work
with them consistently over the short, medium
and longer terms
Lessons learned from working on capacity
development in fragile states
• Capacity development efforts must selectively
focus on core state functions, so that they can
effectively provide for their people
• Planning tools developed for post-conflict
environments may be useful
• Respect the principle of endogenous change and
foster country leadership
• New capacity development initiatives must not
erode or duplicate existing capacities in individual,
organizational or enabling environment terms
• Sectoral selectivity or “partial alignment” can
deliver strategic pay-offs
• Modest capacity development can be achieved
even in states with acute governance challenges
V. MOVING
FORWARD:
UNFINISHED
BUSINESS
Experiences of the past 5 decades
• Donors must align with and support country-
driven approaches and systems for capacity
development
• Significant efforts are required
• More creative thinking is needed
• Moving from “right answers” to a “best fit” implies
a better understanding of country contexts,
identifying sources of country-owned change,
designing appropriate forms of support and
sharing lessons learned
Unfinished Business of Capacity
Development
• Consolidating consensus on capacity development
as an endogenous process of unleashing,
strengthening, creating and maintaining capacity
over time
• Identifying & addressing the systemic factors that
discourage country-owned efforts
• Donors provide support which encourages,
strengthens and do not replace initiatives by
leaders and managers in partner countries
• Integrating human capital formation and
Technical Cooperation with institutional changes
and organizational reforms
• Developing policy-relevant disaggregated
Technical Cooperation statistics
Annex 1: Vicious
Circle & Virtuous
Circle
 Vicious Cycle of Empowerment
… see bad results as
confirming weak capacity
and commitment
DONORS …
… perceive … fail to claim
standards as ownership; refuse
… fill leadership
… suspicious; establish unrealistic, responsibility;
gap, set boundaries
evaluation standards, irrelevant entitlement attitude
and logic
emphasize quantity

RECIPIENTS …
… lack of control; … the get-most-
perceive inequities, out-of-the-system
friction & mistrust attitude
… advocate and set
… control priorities
implementation, … perceives disconnect
… inability
staff & with needs and
to question
procurement preferences
or refuse
logic
… conceive, write and present Source: UNDP, “Ownership, Leadership and
Transformation”, New York (2003), p.42/43
plan
Annex 1: Virtuous
Circle
 Virtuous Cycle of Empowerment
… perceive growing
assertiveness & capacity
development
DONORS …
… perceive … claim
agreed ownership;
… exercise respect,
… help improve standards as assume
restraint & listen
evaluation relevant & responsibility
standards draw lessons

RECIPIENTS …
… develop evaluation … Reform system
standards; growing that works for
partnership & trust development … support national
efforts, priorities,
systems & processes
… take some
risk & provide … control … conceive, write &
support on implementation, staff present plan
demand & procurement

Source: UNDP, “Ownership, Leadership and

… constructive critique and long-term
Transformation”, New York (2003), p.42/43 commitment based on agreed conditions
Annex 1: Virtuous
Circle
 UNDP’s default principles:capacity
development

1. A long-term process which cannot be rushed

2. Require respect for value systems and must
foster self-esteem
3. A learning process without blueprints
4. Not power neutral and challenges existing
mindsets and power differentials
5. Promote development and is sustainable
 UNDP’s default principles:capacity
development

6. Establish positive incentives

7. Integrate external inputs into national priorities,
processes and systems
8. Build upon existing capacities rather than
creating new ones
9. Stay engaged under difficult circumstances
10. Remain accountable to ultimate beneficiaries