1. Setting the Scene Knowledge and Capacity – Boundary Conditions to Reality Guy Alaerts 29 May 2013

2. Contents 1. Our areas of interest 2. Four arenas of work 3. Can we measure impact? 4. Are we making progress? 5. This Symposiums questions

3. 1.Our areas of interest

4. Triggers Poor effectiveness of aidin nearly all sectors and especially in water After Mar del Plata (1976) and the International Water Supply and Sanitation Decade (1981-1990) … What is going wrong? It must be … the capacity … ! staff are not trained or educated properly, obsolete or handbook knowledge, universities are too academic, ministries, organizations are unable to use knowledge, households are not informed about water value, society unaware of big decisions on climate change

5. X Y $ KNOWLEDGE AND CAPACITY DEVELOPMENT BEHAVIOR AND INSTITUTIONS Knowledge and capacity to change institutions PHYSICAL WORLD AND EVENTS = RESULTS Change processes Area of interest

6. The Water Sector is complex, is knowledge-intensive Technically complex every 15 years new technologies, science new concepts – Integrated Water Resources Management, aquatic ecology, dam construction, flood mgmt, land-and-water interaction, agronomy, climate change, etc. Its the experts business Socially complex highly distributed stakeholders – everybody makes daily decisions taxpayers must agree to large investments many ministries, water boards, municipalities decide on water allocation and investments very expensive sector because of infrastructure and O&M Its the peoples business

7. The Water Sector is institutionally complex Our challenge: finding an effective partnership between the experts and the people, between vision and reality. Henry Ford: If I had asked people what they wanted, they had asked me, make the horses run faster.

8. Capacity as the new constraining factor Since mid-90s capacity, not financing, is key impediment to sector development: High observable need, but constrained internal demand General lack of readiness of projects World Bank, ADB, AfDB: often cannot achieve lending targets EU: cannot disburse Cohesion grants to member countries; about 30% or 35 billion does not get absorbed Forest Carbon Partnership cannot disburse US$600M, other CC funds face similar lack of absorption US, UK do not have sufficient pipeline of investments Needs major leap in efficiency of institutions and absorption capacity within next decade

9. 2.Four arenas of work

10. Arena 1 : Education, research, innovation Basic education (primary and secondary) BSc and Post-graduate studies and specializations (expertise) Relation between curricula, career opportunities and professional demands – quality and quantity Knowledge institutes and research (Hydromets, …) Vocational training and Meisterschaften (internships) Training: professional, task- or skill-oriented Professional and social networks Management of teaching institutions Who will take conceptual and inspirational leadership?

11. Arena 2 : Organizational improvement Improve the managerial performance of utilities Human resources management Results-oriented management Strategic management Knowledge management Networks For municipal water supply and wastewater utilities; irrigation organizations and Water User Assocociations; Ministeries and technical agencies; Who will be the Leaders for organizational reform?

12. Arena 3 : Communities and civil society Creating awareness and understanding of water use and value at the local level Building local governance and accountability Role of women Equitability Identifying and strengthening local, indigenous knowledge Locality-specific techniques Who will be the local leaders?

13. Arena 4 : Sector-wide development Sector-wide policies and strategies Legal, regulatory, administrative and fiscal regimes Financial flows and sustainability National and sub-national networks and communities of practice International arrangements and cooperation Global public goods Forecasting new changes, challenges and opportunities Taking the leadership of the whole sector – among the water-related institutions

14. 3.Can we measure impact?

15. How to measure? Two options can be considered: 1. Focus on short-term tangible results, within set time frames and budgets, and with clear accountability / measurability … E.g. World Bank Tools for Results Results Framework (only measures against original project objectives) 2.Focus on longer-term capacity development and service delivery, recognizing endogenous capacity growth, lower plannability … Thus far, No effort to measure

16. Approaches in measuring capacity OECD, UNDP, EuropeAid – stress the complexity nature of capacity and the adaptive management approach Manuals with laborious capacity assessment More geared for macro tasks Capacity measured from Development Results UNDP (2007): Capacity Assessment Methodology: starting from Capacity assessment, then Desired future capacities, Capacity gap assessment, Work plan Mostly for sector-wide or governance areas

17. ADB -- Capacity Development ADB – Practical Guide to Capacity Development in Sector Context: Focuses on institutional change / reforms, and change management 10 sections with tools for diagnosis, dialogue and planning Though the diagnosis and dialogue process give good guidance, risk exists of over-analysis Capacity measured by Results

18. ADB -- Capacity Development

19. Yet it is possible to measure results and capacity INPUTS CAPACITY DEV : PROF. CONFIDENCE BETTER PROCEDURES OPENNESS DESIGN, WORKS, … RESULTS But Operational research in Utilities shows capacity is part Tool, part Result; can also be measured INPUTS CAPACITY DEV DESIGN, WORKS, … RESULTS Conventional: budget-driven INSTITUTION, SERVICES

20. Does investment in Knowledge and Capacity pay off? Very few efforts to quantify ERR Education: Long-run effect of 1 additional year of education in OECD area == 3 – 6% increment in GDP/cap. Each university degree contributes an incremental net US$119,000 in income taxes and social contributions (over lifetime). Degrees secure jobs (OECD 2010) Netherlands Central Planning: Investment in education and innovation is treated as without return. Sector capacity: (WB Indonesia Irrigation Improvement): Physical rehabilitation ERR = 10 - 18 % Capacity development only ERR = 20 – 30 % Rehab + enhanced capacity ERR = 30 – 40 %

21. Innovation spurring decline in labor price of light Industrial revolution

23. 4.Are we making progress ?

24. Greater understanding: Principles of KCD Capacity is the capability of individual, institution or society to (i) identify and (ii) understand its development issues, (iii) act to address these, and (iv) learn from experience and accumulate knowledge for the future. Alaerts, ECDPM

25. Greater understanding: Four levels, four competence sets

26. Knowledge and capacity – measuring capacity (only suggestive example questions) Individual levelOrganizational level Institutional level Technical competence Updated knowledge and skills. Appropriate skills mixes : engineering, legal, financial, etc. Expertises and skills mixes in a broader context Management competence Project mgt skills. Leadership. Leaders able to operate with goals agreed with supervisors and stakeholders. Workable task assignments of sector agencies; minimal overlap Governance competence Ability to engage with and listen to stakeholders. Inclusiveness. Transparent decision making. Consultations. Accountability. Regulations to ensure transparency and accountability. Learning competence readiness to critically reflect on own's performance. Procedures, incentives and resources to support learning by staff. Openness to review sector performance and revise policies.

27. Diagnosis: multiple paths to a capable state (World Bank Institute 2007)

28. From diagnosis to selection of intervention institutional reforms human & org. resources dev. dialogue

29. Greater understanding: Principles of KCD Two basic approaches in KCD: 1.Capacity is developed through inputs, leading to better results positivist approach, assuming causal relations between input and output 2.Capacity emerges from complex interactions, partly endogenous, partly exogenous non-plannable, prioritizes capacity, not results, stresses need for adaptive management What works can be either, or a combination …

30. Principles of KCD Capacity is the ability of people, organisations, and society as whole to manage their affairs successfully OECD (2005) Capacity is the ability of individuals, groups, institutions and organizations to identify and solve development problems over time Morgan (1993), UNDP (1993) external partners cannot do CD of others. Partners can support and direct CD processes, but they cannot manage the actual CD of others key criterion for success is that CD must be owned by those who develop their capacity

31. Greater understanding: Principles of KCD But also: Adaptive capacity: considers changes in external factors in a proactive manner to develop a systemic process for improving management policies and practices, with a central objective of increasing the adaptive capacity of the management regime in general, and the involved actors in particular. (Morgan, Pahl-Wostl) Adaptive management is learning to manage by managing to learn.

34. Growing investment World Bank invested over US$1 billion in African CD since 2000 ADB, KfW, GIZ, DGIS … Growing number of dedicated networks: Cap-Net (2002), Indonesian Network, ICID, GWP, …

35. WBI – Knowledge Economy Index and Knowledge Index many regions score low

36. WBI Knowledge &Economy Indexes

37. BUT: KI across most of the world is stagnating or declining

38. African government capacity has seen decline WB review of Africa capacity development(2006): TA and training ineffective to build sustainable public sector capacity. While some countries do well, average SSA govt capacity has stagnated …

39. Case: Indonesia DG Water Resources – 2005 – 2020 serious erosion of skills, tacit knowledge Case: Netherlands – 2012: across all sectors 150,000 technical jobs vacant, of which 35,500 at BSc/MSc level Greying of personnel in water agencies, structural shortages emerging since 2000 Rijkswaterstaat reform 2004-2007 loss of 20% of skilled staff due to early retirement, shift from substantive to process knowledge Structural challenge: staff capacity erosion

40. Erosion of professional staff and senior staff: Change of Age Structure, Indonesian DG Water Resources

41. Erosion of professional staff and senior staff: Netherlands, all technical sectors, and water sector Nature of Staff ShortageTotalHigher-education level Water sector 2012-2016 > Delta technology 2012-2016 > Water technology 2012-2016 1,020 4,050 ±350 ±1,300 Renewal of current staff (180,000) in water sector 2012-2020 40,000 Technical vacancies, all sectors 2014 63,00020,000 Technical vacancies, all sectors 2011-2016 155,40035,500

42. This decade: progressing greying in OECD – will be followed by quick staff loss

43. 4.This Symposiums Questions

44. Conclusions 1. Knowledge and capacity are key to sustainable development, and increasingly so 2. Progress has been made on some counts, esp. water supply 3. But generally, we are observing deterioration of capacity, not improvement 4. We stand to gain a lot from improving the effectiveness of capacity development 5. We can increasingly measure impact, assess capacity levels, and monitor progress

45. Our agenda for this Symposium Whos taking the lead in Capacity Development? How can countries strengthen their institutions for the water sector? What types of Capacity Development activities are required (and who should do this)? Propose: Two concrete and realistic follow-up actions, Initiatives to foster and strengthen water leaders, Three significant policy or action recommendations to upcoming related events: the Budapest Water Summit (8-11 October 2013), the IWA Development Congress (14-17 October 2013), the seventh World Water Forum (2015), and the formulation of the new water-related Sustainable Development Goals (SDGs).

46. Purpose of 5th Symposium I wish you wisdom! Thank you for your attention Guy Alaerts Unesco-IHE g.alaerts@unesco-ihe.org