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.

II.

Why focus on capacity?

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 Aid Effectiveness

Calls for capacity development to be an explicit objective of national development & poverty reduction strategies

The UN Millennium Project and the Commission for Africa

Challenges the world to treat capacity development with greater urgency

The New Partnership for Africa’s Development (NEPAD)

Identified capacity constraints as a major obstacle to 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 (1/4 donor aid) went to “Technical Cooperation”, most of which dealt with capacity development th of • 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 recognized importance of Capacity Development

The Aim of the Paper

Difficulty of achieving Capacity Development

Intended audiences – broad range of development practitioners A framework to guide & stimulate on-going discussions Draws on evaluations & analysis A framework for thinking about capacity development 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

Technical Assistance

Facilitating access to knowledge Brokering multi stake-holder agreements Participating in policy dialogue & advocacy Providing incremental resources Creating space for learning by doing

Capacity Development

Importance of Capacity Development

Country capacity is the key to Development Performance

Two connected observations

Country Ownership is the cornerstone of aid & development effectiveness

Level of Analysis

Individual level

(experience, knowledge & technical skills)

Capacity challenge is a Governance challenge Systemic factors, i.e.,

relationships between the enabling environment, organizations and individuals

Organizational level

(systems, procedures & rules)

Enabling environment

(institutional framework, power structure & influence)

Influences by means of incentives it creates Successful capacity development requires not only skills & organizational procedures, but also incentives & good governance

Building an effective state Promotion of good governance Scope & limits of Capacity Development Capacity Development Institutional 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

Paris Declaration (2005) Rome Declaration (2003) Agreement on DAC Principles for Effective Aid (1992)

The New Consensus

Capacity development is the prime responsibility of partner countries, with donors playing a supporting role

“Shaping the 21 st Century” OECD DAC paper outlining a new paradigm (1996) Poverty Reduction Strategy Paper (PRSP) Initiative (1998) Comprehensive Development Framework (CDF) (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

• Lead the process • Set specific objectives in national development plans • Implementation through country-led strategies

Donor Countries

• Mobilize financial & analytical support around partner country’s objectives, plans & strategies • Make full use of existing capacities • Harmonize support for capacity development

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

Systemic factors, i.e.,

relationships between the enabling environment, organizations and individuals

Forces influencing capacity development

BLOCKING FACTORS - NEGATIVE FORCES 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, once-only sequence STEPS Understanding the international and country contexts Identifying & supporting sources of country-owned change Delivering support Learning from experiences and sharing lessons Individual LEVELS Organizational Enabling environment

A flexible, “best fit” search for supporting capacity development

Individual level

STEPS Understanding the international and country contexts Identifying & supporting sources of country-owned change Delivering support Learning from experiences and sharing lessons

• How is the availability of skilled & committed individuals shaped by global & local push & pull factors?

• Under what conditions could diasporas contribute more strongly to capacity development at home?

• Are individual professionals able to be mobilize?

• Are donor sufficiently responsive to restoring salary levels in key posts?

• 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?

• Does the follow u goes beyond knowledge & livelihood benefits?

• Is it tracking the effects on organizational capacity & performance?

Organizational level

STEPS Understanding the international and country contexts Identifying & supporting sources of country-owned change Delivering support Learning from experiences and sharing lessons

• How are capacities currently shaped by the informal & “political” aspects of organizations?

• Are these features generalized or variable across organizations or organizational spheres?

• Are there private-sector pressures & resources that can be mobilized?

• Is capacity development an explicit objective of a plan or policy benefiting from country ownership?

• Is there effective ownership initiatives within particular organizations or organizational spheres?

• 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?

• Is the achievement of outcomes effectively monitored & fed back into the process?

• Do the monitoring arrangements include proxy measures with appropriate involvement of clients or service users?

Enabling environment

STEPS Understanding the international and country contexts Identifying & supporting sources of country-owned change Delivering support Learning from experiences and sharing lessons

• What are the historical & contemporary factors underlying weak “political will”?

• How are power structures & formal & informal institutions changing and with what effects on politicians’ incentives?

• Does the interaction between donors and country actors form a “virtuous circle” or a “vicious” circle?

• Are there ways donors can encourage effective demand within the country for capacity development?

• 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?

• Is there monitoring of changes in institutional rules & how it has come about?

• 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 DONORS …

… suspicious; establish evaluation standards, emphasize quantity … perceive standards as unrealistic, irrelevant … see bad results as confirming weak capacity and commitment … fail to claim ownership; refuse responsibility; entitlement attitude

RECIPIENTS …

… fill leadership gap, set boundaries and logic … control implementation, staff & procurement … lack of control; perceive inequities, friction & mistrust … inability to question or refuse logic … the get-most out-of-the-system attitude … perceives disconnect with needs and preferences … conceive, write and present plan … advocate and set priorities Source: UNDP, “Ownership, Leadership and Transformation”, New York (2003), p.42/43

Annex 1: Virtuous Circle

Virtuous Cycle of Empowerment DONORS …

… help improve evaluation standards … perceive growing assertiveness & capacity development … perceive agreed standards as relevant & draw lessons … claim ownership; assume responsibility

RECIPIENTS …

… take some risk & provide support on demand … develop evaluation standards; growing partnership & trust … control implementation, staff & procurement … exercise respect, restraint & listen … Reform system that works for development … support national efforts, priorities, systems & processes … conceive, write & present plan Source: UNDP, “Ownership, Leadership and Transformation”, New York (2003), p.42/43 … constructive critique and long-term 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