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Based on DAC Network on Governance: DCD/DAC/GOVNET(2005)5/REV1, Feb.1, 2006

2 CONTENTS Why focus on capacity? What has been learned?
From emerging consensus to better practice on the ground Capacity development in fragile states Moving Forward: Unfinished business Annex 1: Vicious and virtuous cycle of empowerment Annex 2: UNDP’s default principles for capacity development


4 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

5 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

6 contrast between The Aim of the Paper Increasingly Difficulty
of achieving Capacity Development Increasingly recognized importance of Capacity Development The Aim of the Paper

7 Aims of the Paper Draws on evaluations & analysis Intended audiences –
broad range of development practitioners A framework for thinking about capacity development A framework to guide & stimulate on-going discussions Concerns with capacity issues in the public sector A basis for dialogue between donors & partner countries Aims of the Paper

8 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

9 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

10 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

11 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

12 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

13 Relationship between Technical Assistance & Capacity Development
Facilitating access to knowledge Brokering multi-stake-holder agreements Capacity Development Technical Assistance Participating in policy dialogue & advocacy Providing incremental resources Creating space for learning by doing

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

15 Influences by means of incentives it creates
Capacity challenge is a Governance Level of Analysis Individual level (experience, knowledge & technical skills) Organizational level (systems, procedures & rules) Systemic factors, i.e., relationships between the enabling environment, organizations and individuals Influences by means of incentives it creates Enabling environment (institutional framework, power structure & influence) Successful capacity development requires not only skills & organizational procedures, but also incentives & good governance

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


18 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

19 The New Consensus Capacity development is the prime responsibility of
Agreement on DAC Principles for Effective Aid (1992) “Shaping the 21st Century” OECD DAC paper outlining a new paradigm (1996) Paris Declaration (2005) The New Consensus Capacity development is the prime responsibility of partner countries, with donors playing a supporting role Rome Declaration (2003) Comprehensive Development Framework (CDF) (1998) Poverty Reduction Strategy Paper (PRSP) Initiative (1998)

20 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

21 The role of partner countries and donors in capacity development
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

22 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

23 Forces influencing capacity development
BLOCKING FACTORS - NEGATIVE FORCES Systemic factors, i.e., relationships between the enabling environment, organizations and individuals Capacity Development FACTORS FAVOURING - POSITIVE FORCES

24 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

25 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

26 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

27 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


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

30 Individual level STEPS
Understanding the international and country contexts 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? Identifying & supporting sources of country-owned change Are individual professionals able to be mobilize? Are donor sufficiently responsive to restoring salary levels in key posts? 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 experiences and sharing lessons Does the follow u goes beyond knowledge & livelihood benefits? Is it tracking the effects on organizational capacity & performance?

31 Organizational level STEPS
Understanding the international and country contexts 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? Identifying & supporting sources of country-owned change 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? 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 experiences and sharing lessons 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?

32 Enabling environment STEPS
Understanding the international and country contexts 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? Identifying & supporting sources of country-owned change 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? 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 experiences and sharing lessons Is there monitoring of changes in institutional rules & how it has come about? Is there independent, objective monitoring pf the mode of delivery?

33 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

34 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

35 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

36 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

37 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

38 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


40 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

41 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

42 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


44 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

45 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

46 Annex 1: Vicious Circle & Virtuous Circle

47 Vicious Cycle of Empowerment
… see bad results as confirming weak capacity and commitment DONORS … … fail to claim ownership; refuse responsibility; entitlement attitude … perceive standards as unrealistic, irrelevant … fill leadership gap, set boundaries and logic … suspicious; establish evaluation standards, emphasize quantity RECIPIENTS … … the get-most-out-of-the-system attitude … lack of control; perceive inequities, friction & mistrust … advocate and set priorities … control implementation, staff & procurement … perceives disconnect with needs and preferences … inability to question or refuse logic … conceive, write and present plan Source: UNDP, “Ownership, Leadership and Transformation”, New York (2003), p.42/43

48 Annex 1: Virtuous Circle

49 Virtuous Cycle of Empowerment
… perceive growing assertiveness & capacity development DONORS … … claim ownership; assume responsibility … perceive agreed standards as relevant & draw lessons … exercise respect, restraint & listen … help improve evaluation standards RECIPIENTS … … develop evaluation standards; growing partnership & trust … Reform system that works for development … support national efforts, priorities, systems & processes … take some risk & provide support on demand … control implementation, staff & procurement … conceive, write & present plan … constructive critique and long-term commitment based on agreed conditions Source: UNDP, “Ownership, Leadership and Transformation”, New York (2003), p.42/43

50 Annex 1: Virtuous Circle

51 UNDP’s default principles:capacity development
A long-term process which cannot be rushed Require respect for value systems and must foster self-esteem A learning process without blueprints Not power neutral and challenges existing mindsets and power differentials Promote development and is sustainable

52 UNDP’s default principles:capacity development
Establish positive incentives Integrate external inputs into national priorities, processes and systems Build upon existing capacities rather than creating new ones Stay engaged under difficult circumstances Remain accountable to ultimate beneficiaries


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