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We have clustered the eighteen approaches into five different groups to enable the reader to compare both within and between these groups. As we noted earlier in this introduction, the various approaches depart from and build on various definitions of capacity, either explicitly or implicitly. In order to illustrate this, we have inserted one definition for each group that can serve as an example: A. Approaches that focus on M&E from a system perspective; ‘A social competence. A collective capacity to learn: to generate, identify, obtain, develop and put to use technologies that are appropriate to specific conditions and societal objectives. The capacity for innovativeness is embedded in the social relations and interactions of a large number of semi-autonomous actors – individuals, groups, organizations and institutions’ (Engel 1997, defining ‘innovativeness’) B. Approaches which focus on changes in behaviour; Focus on behavioural change: ‘(…) changes in the behaviour, relationships, activities, or actions of the people, groups, and organizations with whom a program works directly’ (Earl, Carden and Smutylo 2001: 1). C. Performance-based approaches; ‘Capacity is the ability of an organization to produce appropriate outputs’ (Boesen & Therkildsen 2005) D. Approaches which focus on strategic planning; ‘Organizational capacity is the ability of an organization to use its resources to perform. If the organization itself is the unit of analysis, all of the resources, systems and processes that organizations develop to support them in their work can be assessed’ (IDRC/IDB 2002). E. Rights-based / Empowerment-based approaches. ‘Empowerment is a process that strengthens the abilities, confidence, analysis and power of poor and excluded people and their ogrnaisations so they can challenge unjust and authoritarian power relations’ (Ac

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What is M&E’ed? Whose capacity? Why; purpose, use of the results? How? Remarks

A. Systems based approaches 1: Rapid Appraisal of Agricultural Knowledge Systems (Engel, Salomon) Salomon, M.L. and Engel, P.G.H. (1997) ‘Networking for Innovation: A participatory actor-oriented methodology.’ Amsterdam: Royal Tropical Institute

the capacity of actors as innovators

knowledge and information systems (a multitude of actors)

improve generation, exchange and utilisation of knowledge and information for innovation

use of windows and tools to ‘open up’ problems by looking at them from different perspectives

Not restricted to use in agricultural/agricultural domains

2: Participatory information systems appraisal, PISA (Pact) Bennett, C., Bloom, E., Kummer, B., Kwaterski, J., Rivero, G. (2004) ‘Community-driven tools for Data Collection and Decision Making: The PISA Action Guide.’ PACT Inc.

the system in which an entity functions

donors, trainers/facilitators and NGO’s that implement multi-annual programs

make well-informed evidence based decisions, and empowerment of local actors

continuous information collection through “stringers”

B. Approaches which focus on changes in behaviour 3: Outcome mapping (IDRC, Earl, Carden, Smutylo) Smutylo, T. (2005) ‘Outcome Mapping: A method for tracking behavioural changes in development programs’. ILAC Brief 7

changes in behaviour of partners (=outcome)

organisations’ own capacity to prompt behavioural changes in partners - individuals or organisations

learning - internal - participatory workshops - methodology with 3 stages and 12 steps

Outcome Mapping defines all outcomes in terms of behavioural change. It starts from the premise that sustainable development is about changing capacities and behaviour of people and organisations

4: Springboard stories (Society for storytelling, Steve Denning) Asif, M. (2005) ‘Listening to the people in poverty - a manual for life history collection’

“how an organisation, community or complex system may change”

individual focus, with the intent that this individual focus translates into organisational development

Emphasis on storytelling: building trust, unlocking passion, non-hierarchical

emphasis on oral communication, and open discussion of stories

the story uncovers the organisation's cornerstone, those powerful yet intangible qualities, values, philosophy and culture, which subtly determine the organisation's character

5: The Most Significant Change (MSC) technique (Davies, Dart) Davies, R. & Darts, J. (2005) ‘The Most Significant Change Guide’

significant change stories stakeholders, with the aim of both individual and organisational development.

MSC may be used in addition to more conventional evaluation approaches to identify unexpected changes to complete picture

domains of change, ranking of significant change stories

democratic: may be used without knowledge of the method or M&E in general

C. Performance based approaches 6: Results-Oriented Approach to Capacity development and Change’ (ROACH) (Boesen & Therkildsen) Boesen, N. & Therkildsen, O. (2003) ‘Draft Guidelines for Evaluation of Capacity Development Support in Danish Sector Programme Support.’ DANIDA

capacity of organisations, especially the evaluation of potential constraints and options for changing organisational capacity

organisations (in relation to the wider context)

Understanding how the performance of the public sector may be increased

organising, collecting facts, analysing, concluding

7: The Zambian HIV/AIDS Learning Initiative (PACT) – Organisational Capacity Assessment PACT (2006) ‘The Zambian HIV/AIDS Learning Initiative’ – Handout document. PACT

dual focus on measuring performance and increasing organisational capacity to perform

organisational reflecting, learning and planning for the purpose of increasing organisational performance

participatory tool design; self-assessment, guided by external facilitators; participatory reflection on

uses online tools for accessing example indicators and perform statistical calculations

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What is M&E’ed? Whose capacity? Why; purpose, use of the results? How? Remarks

data; also usable for monitoring and strategic planning

8: Planning, Implementing and Evaluating Capacity Development (Horton) Horton, D. (2002) ‘Planning, Implementing, and Evaluating Capacity Development’. ISNAR Briefing Paper 50

capacity development through monitoring activities, outputs and outcomes

organisational improvement /learning - participatory - some basic guidelines

D. Approaches which focus on strategic planning 9: Strategic Planning: An Inquiry Approach Centre for Development and Population Activities (CEDPA) CEDPA (1999) ‘Strategic Planning: An Inquiry Approach’

designed to expand and enhance the management and planning skills of women leaders

administrators and managers of NGO’s conducting programmes in developing countries

making strategic planning more accessible and enjoyable

modeled after the appreciative inquiry approach, focus on best practices / positive aspects

organisational strengths and weaknesses

organisational accountability; use of results for strategic planning and organisational development

internal and external assessment of organisations

the approach emphasises on the complementarities between internal and external organisational assessment

10: Organisation (self) assessment (IDRC, Lusthaus, et al) Lusthaus, C. Adrien, M.H., Anderson, G. Carden, F. and Montalván, G.P. (2002) ‘Organizational Assessment A framework for improving performance.’ IDRC/IDB 11. District Based Poverty Profiling, Mapping and Pro Poor Planning (Wolfram Fischer) Unpublished document

poverty profiles, thematic maps and pro-poor programmes

district local governance actors

strengthening the capacity of district level actors for designing their own poverty reduction programmes through a bottom-up approach

combination of quantitative and qualitative methods for collecting data.

focus on underlying causes of poverty and their interlinkages

12: Measuring while you manage: Planning, monitoring and evaluating knowledge networks. (Creech – IISD) Creech, H. (2001) Measuring while you manage: Planning, monitoring and evaluating knowledge networks. International Institute for Sustainable Development (IISD)

effectiveness and efficiency of networks

formal knowledge networks meeting funder requirements, and to measure while managing.

- participatory meetings -detailed methodology

uses components from different methodologies, including Outcome Mapping

E. Rights-based / Empowerment-based approaches 13: Critical Webs of Power and Change: A resource pack for planning, assessment and learning in people-centred advocacy (ActionAid) ActionAid. (2005) ‘Critical Webs of Power and change – Resource Pack for Planning, Reflection, and Learning in People-Centred Advocacy.’

“how change and advocacy happens”

programmes supported or implemented by ActionAid

monitoring and evaluation for rights based development (action research)

- “resource pack”, though not prescriptive - participatory - qualitative - no pre-set indicators - situations with no tangible outcomes - changing goals - long and unpredictable time frames

context: Rights-based development

14: The PRA/PLA/RRA school (Chambers) Chambers, R. (2004) ‘Notes for Participants in PRA-PLA Familiarisation Workshops in 2004.’ Institute for Development Studies (IDS)

most known and used for evaluating development programmes

emphasis on learning by doing to contribute to capacity development and empowerment of people in developing countries, and increased understanding of contextualised issues by

attitudes/behaviour should precede over and are much more important than the use of methods and techniques

both qualitative and quantitative approaches for collecting data

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What is M&E’ed? Whose capacity? Why; purpose, use of the results? How? Remarks

outsiders 14: The PRA/PLA/RRA school (Chambers) Chambers, R. (2004) ‘Notes for Participants in PRA-PLA Familiarisation Workshops in 2004.’ Institute for Development Studies (IDS)

most known and used for evaluating development programmes

emphasis on learning by doing to contribute to capacity development and empowerment of people in developing countries, and increased understanding of contextualised issues by outsiders

attitudes/behaviour should precede over and are much more important than the use of methods and techniques

both qualitative and quantitative approaches for collecting data

15: Accountability, Learning and Planning System (ALPS) – (Action-Aid) ActionAid (2006) ‘Accountability, Learning and Planning System’

policy and operations of ActionAid international

strengthen accountability to the poor and excluded, strengthening commitment to women’s rights, emphasising critical reflection and promoting transparency

ensuring that M&E contributes to the implementation of its mission: to work with poor and excluded people to eradicate poverty and injustice

various organisational processes

includes ‘open information policy’

16: Systematization to Capture Project Experiences (ENRAP) Phartiyal, P. (2006) ‘Systematization to Capture Project Experiences: A Guide’ ENRAP

lessons of rural development projects

capacity of project stakeholders to interact and evaluate the development process

the process allows stakeholders and community members to interact and evaluate the development process

- grounding (preexercise preparations) - Strategy, field visit and documentation (experimental learning) - Sharing and dissemination of learning

17: Online Monitoring and Evaluation (IICD) Blommestein, N. (2005) ‘How does IICD get evaluation cooking? IICD’s experiences with Monitoring & Evaluation for the purpose of learning.’

the results of projects that are supported by the IICD in nine different countries in Latin-America, the Caribbean and Africa

in accordance with the ownership principle, local people receive support to monitor, evaluate and take responsibility for their development projects

for the benefit of the end users, by improving the impact of using ICT’s for development

combination of quantitative (online survey) and qualitative (focus group discussions) methods

local M&E partners receive capacity development support

18: Horizontal Evaluation Thiele, G., Devaux, A., Velasco, C. and Manrique, K. (2006) ‘Horizontal Evaluation: Stimulating Social Learning Among Peers’ International Potato Center/ Papa Andina Program, Lima, Peru.

has been used to evaluate emerging research and development methodologies

both local groups of people who design/implement the methodology, and an external group of peers

the approach provides productive suggestions to improve R&D methodologies, stimulates experimentation and promotes social learning

central to the approach is a three-day workshop which brings the two groups together

has been used in both Latin-American and African contexts.

TTHHEE CCOONNCCEEPPTT OOFF CCAAPPAACCIITTYY,, DDRRAAFFTT :: EECCDDPPMM ((22000066)) We are suggesting in this paper five central characteristics or aspects of capacity that can begin to give the theory and practice some substantive and operational shape. Capacity is about empowerment and identity, properties that allow an organization or system to survive,

to grow, diversify and become more complex. To evolve in such a way, systems need Capacity has to do with collective ability, i.e. that combination of attributes that enables a system to

perform, deliver value, establish relationships and to renew itself. Or put another way, the abilities that allow systems - individuals, groups, organizations, groups of organizations - to be able to do something with some sort of intention and with some sort of effectiveness and at some sort of scale over time. A focus on abilities or as we call them in this paper - capabilities - can help provide more operational and specific ways to deal with the broader concept of capacity. Later on in this report in Section --, we draw out the concept of capabilities in more detail and suggest how they can be mapped and assessed.

Capacity as a state or condition is inherently a systems phenomenon. Capacity is an emergent property

or an interaction effect. It comes out of the dynamics involving a complex combination of attitudes, resources, strategies and skills, both tangible and intangible. It emerges from the positioning of a system within a particular context. And it usually deals with complex human activities which cannot be addressed from an exclusively technical perspective. Later in the paper, we show how the ideas of complex adaptive systems and emergence can explain a good deal about capacity.

Capacity is a potential state. It is elusive and transient. It is about latent as opposed to kinetic energy.

Performance, in contrast, is about execution and implementation or the result of the application/use of capacity. Given this latent quality, capacity is dependent to a large degree on intangibles. It is thus hard to induce, manage and measure. As a state or condition, it can disappear quickly particularly in smaller, more vulnerable structures. This potential state may require the use of different approaches to its development, management, assessment and monitoring.

Capacity is about the creation of public value. All countries, regardless of their level of development,

have many examples of effective capacity that subverts the public interest. The most obvious would be organized corruption, the behavior of gangs and organized conspiracies and the capture of public institutions. In most countries, different kinds of capacities compete for power, control and resources. Capacity in this report refers to the ability of a group or system to make a positive contribution to public life.

Unpacking the concept of capacity Assuming that the task of giving the concept of capacity more operational content would be useful, how should we think about doing this? In this report, we use a framework with four aspects to look in more detail at the nature of capacity. We go into more detail in Section -- below. We use these ideas later in the report to address various methods of assessment, mapping, monitoring and evaluation. We look at its foundational components or elements such as financial resources, structure, information,

culture, location, values and so son. Most analytical frameworks focus on these aspects. We refer to ‘competencies’ when we focus on the energy, skills, behaviors, motivations, influence and

abilities of individuals.

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We use the term ‘capabilities’ to refer to a broad range of collective skills that can be both technical and logistical or ‘harder’ (e.g. policy analysis, marine resources assessment, financial management) and generative or ‘softer’ (e.g. the ability to earn legitimacy, to adapt, to create meaning and identity).24 All capabilities have aspects that are both hard and soft.

Finally, we use the term ‘capacity’ to refer to the overall ability of a system to create value. .

Five core capabilities: Capacity can be conceptualized as being built on five core capabilities which can be found, to a greater or lesser extent, in all organizations or systems: the capability to act, the capability to generate development results, the capability to relate, the capability to adapt and finally, the capability to integrate.

These five capabilities are separate but interdependent.

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Overview The focus of systems thinking moves in a variety of different directions compared to the linear style of conventional thinking. It is more than lateral thinking. It is also vertical and horizontal and circular. Systems thinking pays much more attention to movement and dynamics. Systems thinking is oriented more towards capturing flow and movement. In particular, it focuses on processes, patterns and relationships. What matters more is understanding the effects of the interactions as opposed to detailed efforts to predict outcomes. Systems thinking also assumes a good deal of randomness and unanticipated consequences that cannot be foreseen even under the most laborious exercises in risk analysis. Systems thinking thus looks quite differently at the issue of attribution or cause and effect. From its perspective, explicit inputs alone never lead to outputs as in the log frame. Cause and effect are separated in time and space. Micro effects can have macro causes and visa versa. The linear, mechanical concept of results chains is not used. The vast number of system interrelationships leads to unpredictable patterns of disorder and instability. No single factor can produce desired outcomes with any certainty or even a high probability. All outcomes can best be understood in terms of probabilities that are themselves subject to change. But it does not put forward a view of totally random outcomes. Certain kinds of actions and influences can improve the odds of channeling system performance in a certain direction. The challenge in systems thinking is to try and make possible desired outcomes more probable. Systems thinking pays little attention to the idea of ‘objective’ knowledge ‘out there’ that can be collected to make a particular case. It takes a post-modern way of seeing the world. Nothing is objective and independent of its context. The reality of a system and its behavior depends on the nature of its relationships and the eye of the beholder. It assumes that no single actor will have a comprehensive view of a process such as capacity development. The choice of every analytical exercise to look at some things and not others changes the nature of the system. The outcomes of measurement, for example, turns on who is measuring what and in what way and why. Knowledge can only be constructed by taking different perspectives using a range of different tools and frameworks. Many ‘answers’ make work in different ways and for different reasons. Ideologies and dogmas are out. Using different frames and analytical disciplines is in. Harnessing diversity is part of the learning process to gain a sense of the whole. Principles claiming universality need to be customized. The flip side of this inclusivity, however, are continuous battles over objectives, interests, boundaries and ideologies. Systems thinking uses a good deal of ‘both-and’ reasoning as opposed to the ‘either-or’ variety. Systems thinking as discussed in this paper takes a variety of forms including the four schools of systems thought that are prominent in the literature. Annex 2 gives a rough summary of these four approaches. Paul Engel will speak more about one in particular - soft systems methodology - at the workshop. These four variations are the following: (i) Complex adaptive systems; (ii) Soft systems methodology; (iii) Systems dynamics; and (iv) Chaos and complexity theory/ The idea of ‘hard systems’ thinking needs to be briefly discussed here. This particular approach which derives from earlier engineering systems models looks narrowly at the transformation of inputs into outputs in support of specific goals and objectives. Much of the interest in systems thinking is based on a reaction against the analytical approach known as reductionism, a style of thinking that still dominates much of the discussion about capacity development. Reductionism is fundamentally about exerting control over people and processes. But in applying these

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techniques to human systems, it can undermine the very objectives that participants are seeking. It tends to act against innovation and adaptation, the very qualities that are crucial for long-term effectiveness. Conventional approaches are seen to focus too much on analyzing static ‘snapshots’ made up of disconnected pieces, almost like putting crossword puzzles together. Operational Implications of Systems Thinking for Capacity Development One of the main contributions of systems thinking should be to help people gain a systems appreciation, both of the systems of which they are a part and of the interrelationships that shape their own role and work. Systems thinking tries, in practice, to get people to see the big picture. In doing so, it works to combat systems blindness. Any contextual analysis needs to be situation specific by its very nature. Yet many capacity analyses remain relentlessly a-historical, apolitical and a-cultural. They focus on bringing generic solutions such as decentralization or the new public management and overcoming contextual constraints in an effort to apply them. The current enthusiasm for ‘best practice’ intensifies this trend. Part of the DFID Drivers of Change Program with its emphasis on context, change and political economy is a deliberate effort to overcome this pattern in the aid system. What insights does systems thinking offer in terms of dealing with organizational change? How does it see systems changing and altering their capacity? Systems thinking, especially complexity and chaos theory, points to the value of instability, disorder and variation. These conditions act against inertia. They allow organizations to seek new opportunities and ways of doing things. Systems thinking places less emphasis on the traditional notions of consistency and control that underlie much thinking about public management. The tendency in systems thinking is to give more attention to adaptiveness, to innovation, to change management and to understanding risk and uncertainty. Order, as opposed to control, is achieved by mastering the deeper rhythms and dynamics that move the system such as variation. The job of leaders is to get the organization to perform with a range of ‘bounded instability’. Organizational culture, for example, cannot be such that it limits the capacity or inclination of the organization to shift direction. It must contribute to diversity and fluctuation. Also on this list would be the valuing of multiple perspectives, flattened hierarchies, citizen participation, communications, process management, innovation, information technology, employee empowerment. Much of the current capacity development literature comes from a top-down, strategic viewpoint. Senior managers and funding agencies formulate a capacity ‘plan’ that they then try and implement. Systems thinking would say that other, more middle-up-down, spontaneous processes are already at work and need attention. The danger is that the planned, top-down tends to stifle the spontaneous variety. The idea that all systems are constantly changing is key. External interveners need to get a sense of how and why and where such changes are taking place. And they need to be conscious of the match between their intervention and the on-going patterns of change. The western perception that systems are huge inert machines that must be shoved or pressured into action by external forces is not one that comes from systems thinking. Some sort of change and capacity development is always going on. All systems either self-organize or die. From a systems perspective the key to effective change and capacity development is to create the conditions in which self-organization can flourish Systems thinking seems only partly convinced about the value of incentives. There is less faith in the ability of incentive designers to put in place the rewards and punishments needed for behavior modification. Most incentive systems are seen to fail in the medium and long-term. Systems thinking also has less inclination to treat social or collective phenomenon as if they were simply reflections of individual interests. Deeper motivation comes from a collective commitment to the meaning the system is enacting. Incentives based on an intent to alter individual behavior can well lower the level of collaboration.

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Systems thinking pays a good deal of attention to process and systems dynamics. The formal structural changes that dominate most thinking about capacity -roles, responsibilities, structures, incentives, timelines, accountabilities - are seen as effects associated with deeper process changes. Those changes have to do with rejuvenation, adaptation, renewal and sense-making. Structural changes that impede these processes act against the development of capacity. The point here is that efforts at capacity development, in a systems context, can easily make things worse instead of better. Systems thinking focuses more on transformational change and the best ways to achieve this. Incremental steps and stable organizations are seen as inadequate to meet current demands. In this sense, systems thinking has a more ambitious approach to change. Systems thinking is about more than muddling through or around constraints to change. The concept of ‘self-organization’ is key to systems thinking especially chaos theory. Systems have the innate ability to break apart into disorder and then reassemble themselves into some new form or structure. The key here is the system having the deeper capacity for renewal and transformation. The trick for external facilitators is to help put in place the conditions that encourage this self-organization. Or at the very least, not to hinder the process of self-organization. Systems thinking puts great importance on adaptation, flexibility and learning by doing. A systems view of leadership in support of capacity development takes a less heroic view. Leaders must foster learning and values. They need to treat capacity development as an end in itself. They need to work with the whole system and help it to develop the capacity for self-organization. They need a sense of optimism that can help the system deal with complexity, risk and uncertainty. They need to help the system maintain a coherent identity. Systems thinking puts a good deal of stress on dialogue amongst actors within the system especially in terms of understanding the mental models of others. Some types of systems thinking see the achievement of consensus as critical for systems participants to make progress. Others see accommodation as the best that can be hoped for. Still others see conflict and differences as essential to maintain the diversity that is needed for innovation and adaptation. Systems thinking thus contests current assumptions about how to achieve improved results and performance. It does not support the view that strong leadership, effective and comprehensive management systems and explicit strategy are essential or that results should be pre-selected or that the system should be ‘driven’ to achieving these results. Almost all forms of systems thinking take a dim view of the input-output-results chain methodologies that are now pervasive in development cooperation. Results-based management is seen as a linear, mechanical, overly deterministic way of thinking and acting which has little to do with how systems actually operate in real life. Systems thinking rigorously contests the view that if we cannot know and predict the outcome in advance and if no one heroic leader is in charge, we are facing anarchy. A systems view would point to the amazing amount of order that does exist amidst the pervasive failure of most plans and predictions.

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Part of the study is designed to get a better conceptual and strategic understanding of capacity issues. But it also addresses the challenge of converting these insights into operational guidance for busy practitioners both in partner organizations and in international funding agencies. Monitoring and Evaluation We have been struck in the cases by the modest contribution of monitoring systems to capacity development. Most monitoring systems were designed by funding agencies to address their own accountability needs. These agencies have tended to focus on a wide variety of issues such as performance or general management, but seem t development would actually entail. Many seem disconnected from local learning and knowledge systems. Most participants in the field were also uncertain about what data gathering techniques would work best for such a task, given the operational constraints within which they work, and national participants were frequently unconvinced about the added value of such efforts. . Systems Thinking To be uncertain about what the monitoring of capacity As noted elsewhere, in the final report we intend to introduce some ideas to do with systems thinking. One of the main patterns to emerge from the cases is that of systems behavior and its implications for capacity issues. Capacity appears to be an 'emergent' property that derives from the interrelationships among a series of other factors, ranging from governance to individual leadership to access to resources. We are particularly interested in the 'soft systems methodology' (SSM) developed in the late 1980s and which is now being applied to address a variety of public sector issues in several countries.20 SSM is specifically designed to help participants deal with messy complex situations characterized by unclear goals, contested strategies and uncertain outcomes -conditions that were in evidence in most of the cases we reviewed. The application of systems analysis can also provide participants with new perspectives on a range of capacity issues, including thinking about cause and effect, finding the most productive points of intervention, product versus process, the relation-ship between capacity and performance, and many others. The challenge is to understand these complex systems dynamics and help engage participants to address them. Capacity Assessment Frameworks Many analytical frameworks are nominally used to assess capacity, but most seem inadequate. Many are unclear about the nature of capacity. They tend to focus on individual organizations. They are not designed to capture shifts in capacity over time. They also tend to be reductionist in orientation with little attention paid to systems interrelationships. But the nature of new approaches is not obvious. Frameworks that try to capture the obvious complexity are not likely to be practitioner-friendly. Those that focus on limited aspects of capacity development in order to reduce the complexity also miss key elements. We reworking with a variety of groups to look at this issue and will issue a paper on capacity frameworks in the summer of 2005. The Policy and Operational Implications for International Funding Agencies Much of the discussion on capacity development contains two themes: first, the idea of capacity development as moving to the centre of the development debate, and second, the idea of international funding agencies as non-political, technocratic actors in a constant search for more effective methods of capacity development.

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We support both of these ideas but are concerned about giving them shape and relevance. Despite all the rhetoric, the whole idea of capacity comes with a good deal of ambivalence and uncertain levels of commitment from many quarters. It has limited intellectual respectability given its lack of connection to any established academic discipline. For many, it has no identity as an activity apart from its sectoral context. In donor countries there are no domestic lobbies (e.g. such as those for gender, the environment, human rights, or even governance) pressing for its consideration. It does not lend itself well to the current concern with measurable results. Senior political and bureaucratic officials in both high- and low income countries see little value in capacity development as a platform for maintaining the flow of resources. General publics find it hard to understand what the concept or its implementation adds up to. Most support for the idea comes from middle-level officials and practitioners who must struggle to make aid interventions function and last. Assuming that the Govnet wishes to press the matter, what can be done? We suggest two approaches. The case for making capacity development a serious priority still needs to be made. The DAC 'Good

practices' paper will help in this regard. The international development community also needs to step up its own research on capacity issues in line with the trend in the non-profit and private sectors.

International funding agencies face their own capacity issues. Do they have the competencies? and

capabilities needed to address them? What are their strengths and gaps? What does best practice look like in terms of donor capacity? Do they have a strategy of some sort to develop their capacity assuming that more is needed? What, in short, are the implications of giving any additional priority to capacity development?

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Lessons Learned Capacity – understood in terms of the ability of people and organizations to define and achieve their objectives – involves three levels: individual, organizational and the enabling environment. These levels are interdependent. This approach entails a concern with the wider political economy of change, but continues to treat CD as a distinct challenge and entry point for intervention apart from wider efforts to build the state or promote good governance. CD – understood as a process of unleashing, strengthening and maintaining of capacity – goes well beyond the technical co-operation and training approaches that have been associated with “capacity building”. The stock of human capital and the supply of general and technical skills are important. However, a country’s ability to use skilled personnel to good effect depends on the incentives generated by organizations and the overall environment. CD is necessarily an endogenous process of change. Because it involves much more than awareness of technical subjects and general organizational principles, it cannot be imported. Donor organizations with a mandate for supporting capacity development should be at the forefront of the movement emphasizing country ownership of change initiatives. Appreciating the interactions between three levels of the capacity development process – enabling environment, organizational and individual – means recognizing the important role of systemic factors in enabling or blocking change. However, the constraints arising in the enabling environment are not equally binding in all cases, and it is possible to identify factors at the organizational level that make success more likely. Focusing capacity development on particular organizations may also make good sense in generally unpromising governance situations. Conditions Favoring CD in Organizations Strong demand-side pressures for improvements are exerted from outside (from clients, political

leaders, etc.). Top management provides visible leadership for change, promotes a clear sense of mission,

encourages participation, establishes explicit expectations about performance, and rewards well-performing staff (recognition, pay, and promotions based on merit).

Change management is approached in an integrated manner. A critical mass of staff members, including front-line staff, are ultimately involved. Organizational innovations are tried, tested and adapted. Quick wins that deepen commitment for change become visible early in the process. Top management and change agents manage the change process strategically and proactively,

including both internal and external aspects of the process (communication, sequencing, timing, feedback loops, celebration of victories, and recognition of problems).

Conditions That Have Made Public Sector Capacity Difficult to Develop Lack of a broadly enabling environment: Lack of human security and presence of armed conflict. Poor economic policy that discourages pro-poor growth.

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Weak parliamentary scrutiny of the executive branch. Lack of effective voice, particularly of intended beneficiaries. This is generally associated with weak social capital (trust) and with political systems with low participation, unclear and arbitrarily enforced “rules of the game” and/or lack of respect for human rights

Entrenched corruption (political and administrative) in core government organizations. Entrenched and widespread clientelism or patrimonialism, weakening the pursuit of organizations’ formal tasks.

Aspects of government ineffectiveness: Fragmented government, with poor overall capacity for economic and public financial management, and low levels of transparency and accountability.

Absent, non-credible and/or rapidly changing government policies, and overload of reform and change initiatives.

Unpredictable, unbalanced or inflexible funding and staffing Poor public service conditions: salary levels incompatible with reasonable expectations of living standards; history of flight of qualified staff to other countries; excessive reliance on donor funded positions

Segmented and compartmentalized organizations, with centralist, strictly hierarchical, authoritarian management

Only a formal commitment to a performance-oriented culture, reflected in a lack of rewards for performance and of sanctions for non-performance.

Operationalizing What Has Been Learned 1. Understanding the international and country contexts: Understanding the enabling environment can

be obtained from the “institutional analysis”, “power analysis” or “drivers of change analysis” 2. Identifying and supporting sources of country-owned change: Capacity needs assessments should

begin with the question “capacity for what?” and avoid the trap of providing generic training on broad topics, disconnected from the capacity and performance of specific organizations. Individual professionals within and outside the public sector are potential allies for reformers wishing to promote capacity development, and attention should be given to mobilizing this potential.

3. Delivering support: In delivering support to a capacity development policy or program, donors must

remain aware of the institutional constraints and ensure that their own approach does not contribute to the problem. Need to have clear objectives, need to have the right inputs, selected on the basis of cost-effectiveness and not just what donors have to offer. This may mean giving preference to local suppliers or South-South links.

4. Learning from experience and sharing lessons: CD initiatives should be designed to maximize learning

at each of the three levels of capacity development: individual, organizational, and enabling environment.

Capacity development in fragile states: (i) Need to be based on a good multi-level understanding of the country context. (ii) Need to focus on core state functions, particularly those whose performance directly affects the likelihood of state collapse or further conflict; (iii) Need for greater joint planning across the range of security, diplomatic and development actors; (iv) Need to foster country leadership and take extra care not to undermine existing, including dormant, capacities; and (v) Need to work with non-state actors.

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Moving Forward : Unfinished Business Consolidate the new consensus on capacity development as an endogenous process, make it reach all

parts of the aid system and become a central topic of policy dialogue at country level. Address the systemic factors currently discouraging country-led capacity development as visualised by

the Paris Declaration. Make sure that the international community plays its part in delivering on the Paris commitments,

especially providing support through coordinated programmes linked to government-led strategies as per indicator 4 of the PD.

Fully integrate training and human capital formation with the organisational reforms and institutional changes needed to put skills to effective use, including informal aspects of the way organizations work and how they are influenced by their social and political environment.

Work towards policy-relevant technical co-operation statistics. In order to assess whether donor inputs are becoming more relevant to the achievement of capacity development outcomes, the development community needs more disaggregated data.

Build upon recent learning about capacity challenges in fragile states. Well targeted and appropriately delivered capacity development may be one of the keys to reducing state fragility.

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Critical Success Factors in Country Capacity Enhancement The paper seeks to answer four key questions: what are the critical success factors in CE; how is the Bank doing in these critical success areas; what are the key challenges for the Bank in using knowledge for CE; and what actions at the various organizational levels might help meet these challenges? The analysis is based primarily on available data from two sources: the Africa Region’s Debriefing Program, which provides syntheses of reflections of teams and country partners on ‘what works and why’ in CE; and the Client Feedback Surveys (CFS), which provide information on country perceptions on how the Bank is doing regarding some of the critical success factors in capacity enhancement. Capacity effectively translates into the knowledge of what to do and how to do it, and the capability to transform that knowledge into effective decisions and actions to solve development problems for both the short and long-term. The synthesis of staff and country stakeholder reflections reveals the importance of behaviors, including the following key success factors in CE:

Empowering the country partner: It’s more about ‘creating space’ for the country stakeholders to ‘learn by doing’ than ‘filling the space’ with Bank-prepared solutions. The suggested approaches can be summarized as stepping aside for the country to get into the driver’s seat, but not becoming a ‘back seat driver’.

Adapting knowledge to the local context: It’s more about creating the ‘best local fit’ than applying the ‘best global practice’. The suggested approaches can be summarized as looking at the issue through the lens of the particular country or institution, paying attention to local specificity, and involving local experts and knowledge sources to be part of the search for solutions to development problems.

Behaving as an enabler: It’s more about nurturing effective behavioral competencies than strengthening staff’s technical skills. The suggested core competencies are: ‘listening’, ‘curiosity’, ‘patience’, ‘humility’, ‘flexibility’, ‘empathy’ and ‘building trust’.

Bank Performance in the Critical Success Areas for Capacity

countries perceive the Bank as being relatively less effective in empowering stakeholders and in helping enhance capacity of institutions, especially at the local level;

countries perceive a major ‘knowledge adaptation gap’ in the way Bank staff transfer knowledge

to the countries and its stakeholders;

countries suggest that Bank staff could do better on some behaviors such as flexibility, realism and respect for local culture that are critical to playing the enabler role;

there are some variations by regional country groupings, which point to the need for an agenda

for action that differentiates across regions. In some areas there are also large variations across countries, which points to the need to learn from the experience of the more successful cases of capacity enhancement through knowledge transfer; and

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Bank staff believe they are doing better than they are perceived by the countries on a number of

dimensions related to capacity enhancement, knowledge adaptation and enabling behaviors. Key Challenges in Using Knowledge for Capacity Enhancement Overall, the analysis suggests that the most effective approach to enhancing country capacity is to use or build on existing capacity, and in the process create learning opportunities that make sense in the local social and institutional contexts. Capability to Broker Knowledge for Country Learning and Capacity Enhancement: The analysis suggests that countries look to Bank teams to broker knowledge of successful practices from a variety of sources (including, but not limited to the Bank), while at the same time considering the knowledge systems that are embedded in local sources and practices. Country feedback suggests that Bank teams are relatively more effective in playing the role of knowledge providers and less so as enablers of client learning. Country perceptions of Bank staff’s excessive focus on ‘best practice’, ‘condescension’ towards local knowledge and experience, and insufficient readiness to consider alternative solutions to adapt advice to the local context point to the issues that Bank teams need to address if they are to be more effective in their enabler role. It also suggests the need to look into the prevailing institutional incentive systems and signals, which may in fact be discouraging deviation from ‘best practice’. Another challenge is to better recognize freestanding brokering/enabling services outside the regular operational products and services as important Bank contributions to the development process. It may, therefore, be necessary to revisit the existing institutional processes for resource allocation, outcome monitoring, etc., which may be more oriented toward the traditional operational products and may not provide the needed ‘space’ for inclusion and recognition of free-standing knowledge brokering services. Capability to Help Stakeholders Adapt Global Knowledge to Local Conditions Country feedback suggests that adaptation of ‘global best practices’ to find the ‘best local fit’ may be at the core of an effective knowledge broker/enabler role to help enhance country capacity. Countries generally expect Bank teams to work collaboratively with stakeholders to leverage the various practices and adapt them to the local conditions to help obtain better results. Knowledge of global ‘best practices’ may be needed to do the ‘right things’, but finding the best ‘local fit’ will help do the ‘right things right’. The importance of knowledge adaptation is likely to grow further as the nature of the Bank’s products and services evolves in response to the changing external business environment. Adaptation is not an end in itself, but a critical success factor in obtaining results. It needs to permeate our way of doing business. This implies a changing role for the Bank, from a depository of knowledge and development advice that is transferred to countries, towards the idea of the Bank as a facilitator of country partner learning to enhance capacity. It also suggests that the Bank needs to build stronger staff competency in this area to help improve the impact of its services through more effective application of adapted knowledge. Institutional Capacity to Recognize and Nurture the Needed Staff Behavioral Competencies Playing the role of broker/enabler effectively, and adapting advice to local contexts in a manner that contributes to CE, will depend to a large extent on Bank staff’s behavioral competencies. These

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competencies are facilitators of good learning and effective transfer of knowledge: listening opens up opportunities for learning new things about country needs and constraints; the patience of a good knowledge broker/enabler recognizes the fact that people, groups, countries learn and adapt at different speeds; it is the capacity for empathy that provides the context in which people develop trust and choose to readily exchange tacit knowledge or adopt practices recommended by others; intellectual humility and flexibility similarly help nurture trust and confidence that the provider of advice is seeking realistic answers, and not imposing pre-determined solutions. Another challenge is to nurture mindsets that are consistent with enabling country partners through knowledge to deliver results. The same behavior can be manifested with different implicit intent depending on the prevailing mindset. The impact on the quality of the exchange with the country partner may vary depending on the mindset involved: listening can be done with the objective to confirm what one already thinks, or it can be seen to provide an opportunity to discover something new; in practicing patience, the intent may be either to ‘learn to listen’ or ‘listen to learn’; exhibiting humility may be with the intent to prove others wrong or with a willingness to admit one’s advice may be wrong; showing empathy may be with the intent to force others to accept one’s views or with a willingness to explore and learn about other viewpoints and approaches. One way of responding to these challenges is to build teams that are ‘whole-brained’. A critical task for the leaders who build such teams will be to ensure that in addition to good technical and team skills, behavioral competencies such as listening and adapting are represented in the team. It is the combination of all these skills that is most likely to develop good enablers, i.e., practitioners who can help broker the most effective advice to the country partner and to help the stakeholders adapt it to the local context in a manner that empowers the stakeholders and provides them space to learn how to deliver better results. Readiness to Develop Results Frameworks in Using Knowledge for Capacity Enhancement The analysis suggests that teams would be more effective in enhancing client capacity if the knowledge is transferred ‘just-in-time’, ‘just-enough’, is practical, and is adapted to the local context to ensure the ‘best local fit’. Country feedback reveals that Bank teams could be much more effective in reaching the critical stakeholders through knowledge products in a manner that is helpful to the recipient. Furthermore, the Bank has yet to develop robust metrics to monitor the behavioral competencies that underpin the effective sharing of knowledge to help enhance country capacity. Moreover, the current incentive structure and the resource allocation processes tend to favor the creation of knowledge relative to its sharing, adaptation or adoption. Results frameworks that systematically track the dissemination and adaptation record need to be made explicit and integrated into the design of operational work, especially the AAA products. Key elements to monitor are: how knowledge is adapted to fit the local context, how a knowledge product is disseminated to the country stakeholders, how many stakeholders it reaches, and what value it brings in terms of CE. The content dimension of knowledge is a necessary condition for bringing value to the country. Nevertheless, this may not be sufficient if the right mechanisms and approaches are not applied in sharing that content with the country partner. Emerging practice (e.g., in the Africa Region) provides a basis for developing specific methodologies to measure the knowledge adaptation gap using CFS data, and to assess the effectiveness of the dissemination of knowledge products. What Actions Might Help the Bank Meet the Challenges?

(i) address the issues related to knowledge transfer for capacity enhancement:

• how capacity development needs are to be diagnosed, the capacity development support structured, and the key stakeholders engaged; and

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• what to do and how to do it to better adapt knowledge or disseminate it in a manner that reaches the people that need the material the most;

(i) set specific goals to reduce the perceived knowledge adaptation gap; (ii) propose mechanisms for monitoring progress in achieving these goals; (iii) suggest more innovative approaches to project design:

• look for more simple, and, where appropriate, community-based practices that help achieve development objectives and empower the communities;

• design some operational missions as ‘joint learning exercises with the country’;

(iv) identify entry points for more effective dialogue with the country on CE issues:

• more strategic integration of country office staff as knowledge brokers; • more effective utilization of local knowledge and expertise in the country; • more systematic use of South-South knowledge and learning exchanges; • peer-to-peer learning exchanges facilitated by distance learning technologies, and focused on

priority development challenges such as HIV/ AIDS, could be especially useful in enhancing capacity at the community level.

Analytical and Advisory Activities: To help measure the quality of dissemination and assess whether the knowledge products and services provide ‘just in-time, just-enough’ advice to the country and bring value where and when the key stakeholders need it most: Recognizing and nurturing behavioral competencies: To help leaders and managers to better nurture the behavioral competencies needed for effective work with country stakeholders on CE issues, the Human Resources will need to partner with the Knowledge and Learning Board and other operational units to:

(i) develop systematic tools for objective assessment of staff behavioral competencies; (ii) adapt the Overall Performance Evaluation framework to specifically cover behaviors that are critical

in bringing value to the client in CE; (iii) design special learning processes and events to help nurture behavioral competencies; (iv) identify incentives to promote desired behaviors; (v) develop systematic mentoring/coaching

programs for inexperienced teams:

• include experienced staff (‘mentor/coach’) on the team, at least when the team is dealing with country partners. Such a role would be ideal for staff who are approaching retirement;

• expect all future retirees who possess the needed behavioral skills to spend the last 9–12 months of their career in such a mentoring/ coaching capacity;

(v) introduce mandatory mentoring/coaching for staff who are assigned a task team leader role for the

first time. (vi) establish an “Exodus Program for Retirees” to capture some of the lessons of the experiences of

Bank staff who are about to retire.