interim report jan 05 ED - JD changes - final

European Centre for Development Policy ManagementCentre européen de gestion des politiques de développement

John SaxbyPretoria, South Africa

Mobilising against hunger and for life:An analysis of capacity and change in a Brazilian network

Discussion Paper No 59AApril 2005

Synthesis

John SaxbyPretoria, South Africa

Study on Capacity, Change andPerformanceInterim Report

Peter Morgan, Tony Land and Heather Baser

The lack of capacity in low-income countries is one of the mainconstraints to achieving the Millennium Development Goals.Even practitioners confess to having only a limitedunderstanding of how capacity actually develops. In 2002, thechair of Govnet, the Network on Governance and CapacityDevelopment of the OECD, asked the European Centre forDevelopment Policy Management (ECDPM) in Maastricht, theNetherlands to undertake a study of how organisations andsystems, mainly in developing countries, have succeeded inbuilding their capacity and improving performance. Theresulting study focuses on the endogenous process of capacitydevelopment - the process of change from the perspective ofthose undergoing the change. The study examines the factorsthat encourage it, how it differs from one context to another,and why efforts to develop capacity have been more successfulin some contexts than in others.

The study consists of about 20 field cases carried out accordingto a methodological framework with seven components, asfollows:• Capabilities: How do the capabilities of a group,

organisation or network feed into organisational capacity?• Endogenous change and adaptation: How do processes of

change take place within an organisation or system? • Performance: What has the organisation or system

accomplished or is it now able to deliver? The focus here ison assessing the effectiveness of the process of capacitydevelopment rather than on impact, which will be

External context Stakeholders

Internal features andresources

External intervention

The simplified analytical framework

Co r e va r i a b l e s

Capabilities

EndogenousChange andadaptation

Performance

Study of Capacity, Change and PerformanceNotes on the methodology

apparent only in the long term.• External context: How has the external context - the

historical, cultural, political and institutional environment,and the constraints and opportunities they create - influenced the capacity and performance of theorganisation or system?

• Stakeholders: What has been the influence of stakeholderssuch as beneficiaries, suppliers and supporters, and theirdifferent interests, expectations, modes of behaviour,resources, interrelationships and intensity of involvement?

• External interventions: How have outsiders influenced theprocess of change?

• Internal features and key resources: What are the patternsof internal features such as formal and informal roles,structures, resources, culture, strategies and values, andwhat influence have they had at both the organisationaland multi-organisational levels?

The outputs of the study will include about 20 case studyreports, an annotated review of the literature, a set ofassessment tools, and various thematic papers to stimulatenew thinking and practices about capacity development. Thesynthesis report summarising the results of the case studies willbe published in 2005.

The results of the study, interim reports and an elaboratedmethodology can be consulted at www.capacity.org orwww.ecdpm.org. For further information, please contactMs Heather Baser ([email protected]).

Study on Capacity, Change and Performance Interim Report

iii

ContentsAcronyms v

1. Background 11.1 Purpose of the study 11.2 Purpose of this interim report 11.3 Analytical approach to the study 11.4 Methodology 21.5 Funding 21.6 Outputs to date 3

2. Emerging patterns 62.1 Broader context and governance 62.2 Inter-organisational systems and networks 72.3 Capacity 72.4 Institutional and organisational change 92.5 Performance 142.6 The role of external partners in capacity development 14

3. Operational issues for further study 19

4. The steps required to complete the study 21

Bibliography 22

The European Centre forDevelopment Policy ManagementOnze Lieve Vrouweplein 21NL-6211 HE Maastricht, The Netherlands Tel +31 (0)43 350 29 00Fax +31 (0)43 350 29 [email protected] www.ecdpm.org


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v

AcronymsACBF African Capacity Building Foundation, Harare, ZimbabweADB Asian Development BankAusAID Australian Agency for International DevelopmentCIDA Canadian International Development AgencyCOEP Committee of Entities in the Struggle against Hunger and for a Full Life, BrazilECDPM European Centre for Development Policy ManagementENACT Environmental Action programme, JamaicaESDU Environment and Sustainable Development Unit, OECS, St LuciaDfID Department for International Development, UKGovnet Network on Governance and Capacity Building, Development Assistance Committee of the OECDHSSP Health Sector Support Programme, Papua New GuineaIDRC International Development Research Center, CanadaINTRAC International NGO Training and Research Centre, Oxford, UKIUCN World Conservation UnionJICA Japanese International Cooperation AgencyLenCD Learning Network on Capacity DevelopmentLENPA Learning Network on Programme-based Approaches NAC National Access Consortium, South AfricaNGO non-governmental organisationOECD Organisation for Economic Cooperation and DevelopmentOECS Organisation of Eastern Caribbean StatesPNG Papua New GuineaRRA Rwanda Revenue AuthoritySida Swedish International Development AgencySSM soft systems methodologySWAP sector-wide approach


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1.1 Purpose of the study

In 2002 the chair of the Govnet, the OECD's Networkon Governance and Capacity Building, asked theEuropean Centre for Development PolicyManagement (ECDPM) in Maastricht, theNetherlands, to undertake a study of the capacity oforganisations and groups of organisations, mainly inlow-income countries, its development over time andits relationship to improved performance. The specificpurposes of this study were twofold:

• to enhance understanding of the interrelation-ships amongst capacity, change and performanceacross a wide range of development experiences;and

• to provide general recommendations and tools tosupport the effectiveness of external interven-tions aimed at improving capacity and perform-ance.1

1.2 Purpose of this interim report

The purposes of this interim report to the Govnetare:• to bring Govnet members up to date on the cur-

rent status of the study;• to set out some of the patterns emerging from

the findings; and• to indicate the tasks and schedule required to

complete the study.

1.3 Analytical approach to the study

Before reviewing the progress to date, we firstdescribe the analytical approach to the study.

First, the study focuses on endogenous processes ofchange. We are trying to understand the processesand dynamics of capacity development as theyunfold at the field level. We are not advocating thevalue of country ownership. We assume it. Given thatassumption, how does capacity emerge, and why?Part of the final report will focus on the role of exter-nal interventions, particularly those of internationaldevelopment agencies, but this aspect is not intend-ed as the main part of the analysis. Our focus is onhelping to improve, first, the current level of under-standing, and then the types of intervention.

Second, the study looks at capacity issues from abroad range of perspectives. The case studies, fromAfrica, Asia, the Caribbean and Latin America,2 exa-mine organisational, inter-organisational, networkand sectoral activities in the NGO, public and non-profit sectors. The intention is to look at capacitydevelopment as a complex human, technical andorganisational process across a wide range of con-texts and activities.

We are not attempting in our research and publica-tions to put forward a comprehensive view of allcapacity issues at all levels, ranging from the countrylevel to the individual participant. We have focusedour attention more on studying the capacity of for-mal organisational actors ranging from individuals tolarger networks and groups of organisations. Giventhe breadth of capacity issues, we believe otheragencies such as the World Bank and the AsianDevelopment Bank are better suited to addressmacro-institutional issues and the formulation ofnational capacity strategies.3 We are acutely aware,however, that societal structures and institutions area key part of almost all capacity 'systems', and wehave tried to take their role in account in our work.

Third, we are carrying out the analysis from a widerange of perspectives. Part of the difficulty in under-standing capacity issues is the tendency to rely onuni-dimensional explanations. NGOs rely mainly onthe implicit theories of organisational development.

1 Background


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Notes1 Several other efforts to rethink approaches to capacity

development are underway. The World Bank has, forexample, established a task force to focus on the practicaland operational challenges of improving support for itscapacity building efforts. The African Development Bank isworking with its regional and non-regional partners todefine a new paradigm for supporting capacity. The Govnetof the Development Assistance Committee of the OECD iswriting a good practices paper on capacity developmentwhich tries to draw from all of these efforts. As of March2005, this paper is still in draft.

2 It was originally intended to include cases in high-incomecountries to make the point that capacity issues areuniversal and are not limited to low-income states, butfinancial constraints prevented their inclusion.

3 See, for example, Levy and Kpundeh (2004) Building StateCapacity in Africa, and Campbell and Fuhr (2004) Leadershipand Innovation in Sub-national Government.

Institutional economists see supply, demand and incen-tives as providing the key concepts. Political analysts usepower as the central framework. Governance groups seesocietal organisation as determinant. Programme man-agers are concerned with inputs, targets, timelines andefficiency. We attempt to use all of these perspectives atdifferent times. All are necessary and valuable but noneis sufficient to provide a complete explanation. We arealso reviewing the use of another framework that webelieve adds a good deal of explanatory power: that ofsystems analysis.

Fourth, we are trying to combine theoretical and opera-tional insights. Most of the 'demand' for capacity analy-sis is from practitioners asking for definitions, tools andframeworks - the 'what' and the 'how'. We are address-ing this need in our work. But it is clear from ourresearch that capacity analysis also suffers from a lackof an explanatory theory that can adequately addressthe 'why' issues. We hope to make some contribution tofilling this gap in the final report.

The bulk of the analysis is targeted on the cases asexamples of effective or at least promising capacitydevelopment. For the sake of comparison, we willinclude a section in the final report on the pattern ofreasons for failure and lack of progress, but our inten-tion is to call attention to the success stories for theinsight they can impart. Many of these cases are filledwith accounts of people acting with genuine ingenuityand professionalism. We hope they convey a sense ofthe enormous potential for capacity development thatexists in most development situations.

Finally, we are not intending to come up with any kindof universal formula for effective capacity development.The results of our research indicate that each situationrequires a customised approach. What we hope to con-tribute are some perspectives that can be useful to helppeople understand complex capacity situations.

1.4 Methodology

The methodology to date has been a combination ofcase studies (see figures 1 and 2) and a review of theglobal literature on capacity issues, including that fromthe private sector. In the remainder of the work, weintend to use the workshop format to discuss the find-ings in more detail.

The case studies were chosen on the basis of bothmethodological and pragmatic considerations, includ-ing:

• deemed success;• geographical and sectoral distribution;• issues of special interest to the overall research, such

as successful inter-governmental coordination;• availability of substantial data on the organisation or

system;• availability of funding and donor preferences; and• the interest of country participants.

This last point perhaps requires more explanation. Mostof the country organisations involved have welcomedthe fieldwork and have used the cases as opportunitiesfor learning, to help them better understand the rea-sons behind their success and their options for thefuture. In most of the cases, country staff participated inthe analysis in some way. Some have used the results ofthe research in internal seminars, training sessions andin discussions with boards and funding agencies. Figure1 provides a breakdown of the cases by region and entrypoint.

The case studies were carried out between 2002 and2004. Each case represents a snapshot of a situationthat existed at a particular point in time, which mayhave since changed.

1.5 Funding

The study has benefited from the support of a variety ofdonors, including the UK Department for InternationalDevelopment (DfID), the Netherlands Ministry ofForeign Affairs, the Canadian International DevelopmentAgency (CIDA), the Japanese International DevelopmentAgency (JICA), the Swedish International DevelopmentAgency (Sida), and the Australian Agency forInternational Development (AusAID). Several countryorganisations made financial contributions to the costsof their cases, including St Mary's Hospital Lacor inUganda, the Committee of Entities in the Struggleagainst Hunger and for a Full Life (COEP) in Brazil, andthe Asia Region of the World Conservation Union(IUCN).


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1.6 Outputs to date

The study is near the end of the research stage. A num-ber of case studies are still to be finalised and we hopeto carry out at least one more that deals with religion,early childhood education and community schooling inEast Africa. We are also part way into the process ofanalysing in some detail the patterns emerging fromthe cases, and are reaching conclusions about their sig-nificance. Other tasks undertaken to date include thefollowing:

• A methodological framework has been developed toguide the casework.

• A partially annotated literature review has been pre-pared with emphasis on three main sources: theinternational development literature on capacityissues; other cases of capacity development reportedin the international literature; the global literatureon management, including organisational design,core competencies and networks4; and reports pub-lished by country organisations on capacity issues.

• A total of 18 case studies and one comparative studyhave been carried out, of which six reports havebeen published, 11 are in draft, and two are in prelim-inary stages (see figure 2 for an overview of the sta-tus of the case studies).

• An issue of Capacity.org devoted to the study hasbeen published: 'Capacity development: The why'sand the how's'5, more than 1000 copies of whichhave been distributed in English and French.

• An article, 'What is capacity? Going beyond the con-ventional wisdom', has been published in News fromthe Nordic Africa Institute.6

• A draft discussion paper on the nature of capacityhas been prepared.

• Various papers and contributions to internationalmeetings and conferences have been prepared.

• A section of the Capacity.org website has beenestablished to provide access to all documents relat-ed to the study (www.capacity.org).


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Notes4 A number of international development agencies are

currently reviewing their work in the area of capacitydevelopment, including the Asian Development Bank, theRockefeller Foundation, the Commonwealth Secretariat, theAfrica Region of the World Bank, and the InternationalDevelopment Research Center (IDRC). The InternationalNGO Training and Research Centre (INTRAC) is alsoconducting a major study with support from theNetherlands. There is a growing literature on capacitybuilding coming out of the North American NGOcommunity. See, for example, Blumenthal (2004) Investingin Capacity Building: A Guide to High-impact Approaches;and McKinsey and Co. (2001) Effective Capacity Building inNonprofit Organizations.

5 'Capacity development: the why's and how's', Capacity.org,Issue 19, October 2003.

6 Baser (2004) 'What is capacity? Going beyond theconventional wisdom', News from the Nordic AfricaInstitute, No.2, p.13.


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EntryPoint

of StudyOrganisation System

R

e

g

i

o

n

Public Sector Non-Profit Sector Public Sector Non-Profit Sector

Africa • Revenue Authority,Rwanda

• Public SectorReform, Tanzania

• St Mary’s Hospital,Uganda

• NAC, South Africa

• DecentralisedEducation,Ethiopia

• MadrassaSchools, EastAfrica

Asia/ Europe • Trade Capacities,

Russia• NGO Capacities,

India• Community

Development,Indonesia

• Local govern-ment reform,Philippines

• Health Sector,PNG

• Churches andGovernance,PNG

• IUCN Asia,Pakistan

• DecentralisedEducation,Pakistan

• Micro-Credit,Bangladesh

Caribbean • ESDU, St Lucia• ENACT, Jamaica

LatinAmerica

• HumanResources forHealth, Brazil

• COEP, Brazil

Figure 1. Cases by region and entry point for analysis

Cases that have been published or are near publications are in ITALICS


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Agreed cases Researchers Funding Status Expected Write-up Publication Date

ENACT, Jamaica Peter Morgan Core Done Done AprilESDU, Org. of Eastern

Caribbean States, St Lucia Peter Morgan Core Done Done AprilNAC, South Africa Peter Morgan Core Done In process ?

Capacity for Survival of NGOs,India Niloy Banerjee Core Done Done ?

St Mary's Hospital, Lacor,Uganda Volker Hauck Core Done Done Done

Local Government Reform,Philippines Alix Yule CIDA Done In draft ?

Trade Capacities,Russia Phil Rourke CIDA Done In draft ?

Competition and Microcredit,Bangladesh Niloy Banerjee Core Done In draft ?COEP, Brazil John Saxby Core Done Done Done

Health Sector, Joe Bolger,Papua New Guinea Angela Mandie-Filer,

Volker Hauck AusAID Done Done DoneThe Role of Churches in Governance, Volker Hauck,

Papua New Guinea Angela Mandie-Filer,Joe Bolger AusAID Done Done Done

Decentralisation,Takalar District, Indonesia Tony Land JICA Done Done Done

IUCN Pakistan/Asia, Peter MorganPakistan + IUCN staff CIDA, core In process In draft ?

Civil service reform programme,Tanzania Peter Morgan,

Heather Baser ACBF, core Done In draft June 2005The Rwanda Revenue Authority,

Rwanda Tony Land DFID Done Done DoneHuman resources for health,

Brazil Francisco de Campos,Volker Hauck DFID Done In process ?

Decentralisation and education,Ethiopia David Watson,

Lissane Yohannes DFID Done Done April 2005Decentralisation and education,

Pakistan David Watson,Adnan Qadir Khan DFID Done Done April 2005

A comparative paper on Ethiopia and Pakistan David Watson,

(decentralisation and education) Lissane Yohannes,Adnan Qadir Khan ? Done Done April 2005

Figure 2: Status of the case studies


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Notes7 See, for example, Nadvi and Robinson (2004) Pakistan

Drivers of Change: Synthesis and Policy Implications.8 This globalising aspect of the context has also affected the

practices of international funding agencies. For an analysis,see the Rockefeller Foundation Capacity Building Review(2004) What is Capacity and Why Do We Devote One-third ofthe Portfolio to Building It?

9 For an analysis of a state struggling to overcomeinstitutional constraints, see Matsuda (2003) PeruInstitutional Governance Review.

capacity and performance improvements. In a deepersense, the governance situation in both countries hashindered the emergence of truly professional struc-tures de-linked from politics. Those organisations inthe public sector that did exist lacked the incentives,the resources and the operational autonomy neededto function effectively. In such contexts, approachesto capacity development need to be crafted different-ly than the technocratic strategies on display in theTanzania case.

This is not to say that dysfunctional contexts alwayslead to capacity failures. In a number of cases - suchas the Lacor Hospital in Uganda, the IUCN in Pakistanand Asia - organisations have prospered amidst chaosand disorder. But four factors were at work in thesecases. First, these organisations had operationalautonomy and were not dependent on public financ-ing. All were outside the public sector. Simply put,they could buffer and defend themselves from vari-ous kinds of incursions. Second, they had nimble sen-ior managers who were able to navigate their organi-sations through the risks and take advantage of theopportunities that are always present in unstableenvironments. Third, they had loyal external support-ers ready to buffer them in times of crisis. Finally,they had earned their legitimacy and the support ofkey domestic groups, who also acted to protect them.

In some of the cases, we can see the impact of factorssuch as the 'brain drain', HIV/AIDS and civil strife. Alsoin evidence were the effects of globalisation and thearrival of the information technology revolution. Anumber of the case participants were engaged in vir-tual learning, global partnerships and internationalcommunities of practice. New ideas connected tocapacity issues (for example, social accountability,performance management, executive agencies) havespread rapidly through global networks and in donorpractices. 9

Finally, a number of the efforts at capacity develop-ment, especially those in the public sector, had drawnstrength from earlier social and political convulsionsthat brought new elites into power and changed therules of the game. The Rwanda case may be the mostobvious, but the participants in the cases in Brazil,

2 Emerging patterns In this section we briefly describe some of the pat-terns that have emerged from our casework andanalysis to date. These findings are organised roughlyin the categories of the analytical framework used toguide the fieldwork. We will refine these and otherfindings at an internal ECDPM meeting in mid-March2005.

2.1 Broader context and governance

We have been struck in our research by the reach andintrusion of a complex range of contextual factorsthat have acted to shape the evolution of capacity.From a systems perspective, all the organisations inthe cases were themselves systems. They were, inturn, part of larger systems that have influenced theirbehaviour in both positive and negative ways. Part ofthe challenge for the participants was to 'see' thesecontextual factors at work and to manage strategi-cally in response. Put another way, governance andcapacity development were tightly coupled in many -although not all - situations. This interim report is notintended to present a full analysis of the range ofcontextual influences encountered, but some key pat-terns may give a sense of the situation.

Political and governance structures have exerted aprofound influence in most of the cases. It is instruc-tive to compare the public sector reform programmein Tanzania with those in Pakistan and Papua NewGuinea. Tanzania has a relatively homogeneous popu-lation with over 200 small tribes and ethnic groupsand a common language. Landed elites have exertedlittle influence. There were fewer regional differencesin economic and political power than in many otherAfrican countries. Its geopolitical and security situa-tion was stable. Its political system was structuredalong the lines of uncompetitive pluralism resultingin low levels of political conflict and a high level ofpolicy continuity. In practice, the governance environ-ment in Tanzania provided the productive space andstability necessary for capacity building at all levels.

These governance conditions did not exist in Pakistanand Papua New Guinea.7 Both countries have had tocontend with ethnic and geographical fragmentation.Political struggles have spilled over into all aspects ofpublic life and have constrained or at times prevented

Ethiopia, Indonesia, the Philippines and South Africaall drew strength from new ideas and from the neworganisational and institutional spaces they wereable to occupy.

In the final report, we will endeavour to show howcontextual factors have acted to shape or at leastinfluence the capacity development behaviour oforganisational actors.

2.2 Inter-organisational systems and networks

Over the balance of the work we intend to pay partic-ular attention to capacity development at the multi-organisational level. Capacity issues arising from suchcomplex structures contain within them a series ofchallenges, including incentive structures, sharedleadership and decision making, the crafting of

capacity strategies, conflict and mandate manage-ment, competition versus collaboration, scaling up,and many others.• Many capacity development interventions at the

organisational level are embedded within largersystems that exert positive or negative effects onthose interventions. In some of the cases thesesystems were characterised by their inability tomanage resources effectively, or to make orenforce stable policies. In such systems, capacitydevelopment faced major constraints.

• In other cases, improved system capacity and per-formance helped to set off virtuous spirals thatpulled along individual actors. In practice, most ofthe individual organisations, such as the RwandaRevenue Authority (RRA), were themselves multi-organisational systems that were both loosely andtightly coupled with partners, suppliers, interestgroups, authorisers, competitors and others. Theirlevel of capacity depended, in turn, on the capacityof others. Local governments in Indonesia and thePhilippines also functioned within complexnational systems that involved actors at theprovincial and federal levels.

• Formal institutions - including laws, acts and regu-lations - mattered in many of the cases. The pass-ing of new legislation reforming local governmentwas critical in both Indonesia and the Philippines.Formal institutions were a key part of the capacitypuzzle in Ethiopia, Papua New Guinea, Rwanda,South Africa, Tanzania and Uganda.

• Multi-organisational structures and specificallynetworks that link individual organisations arebecoming more pervasive in all sectors in manycountries. A number of the cases in this study,including the two in Brazil, fall directly into thiscategory. Networks appear to offer one way toaddress the issue of scaling up capacity. We intendto say more about their particular contribution inthe final report.

The task in the final report will be to set out howcapacity develops in these larger systems and net-works and how they act to induce or suppress capaci-ty in individual actors.

2.3 Capacity

A key objective of the study is to develop a more com-plete understanding of organisational and systemcapacity: what comprises it, how and why it emerges,


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Box 1: Comparing the environments fordecentralised education in Ethiopia and Pakistan

While both Ethiopia and Pakistan movedtowards devolution and building the capacitiesto support it at about the same time, the politi-cal ownership of the national goals differedsignificantly. Ownership in Ethiopia was morewidely shared than in Pakistan, relying heavily onthe ruling party's discipline and communicationchain. It was also more consensual, based ondeeper representative democratic structuresthan existed in Pakistan (the ratio of populationto locally elected representative is 1:200 inEthiopia, but 1:1000 in Pakistan). In Pakistan,suspicions of the re-centralising motives of thebureaucracy persisted and the approach adoptedwas in spite of the bureaucracy, not through it. Inaddition, there was considerable opposition tothe devolution plan on the part of vested inter-ests within the political and bureaucratic esta-blishment, particularly at the provincial level,which stood to gain little in terms of power orresources. All of these factors contributed to theconclusion of the team that more favourable andfaster change is taking place in Ethiopia than inPakistan.


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how and why it contributes to development results,and how and why it weakens or collapses. Despite itsadvertised centrality to development, people every-where struggle to explain exactly what capacity is orwhat it comprises. Virtually all discussions about thesubject begin with an effort to agree on a definition. Fewthat have appeared give much operational help to practi-tioners.

From the cases, two basic ways of thinking about theidea of capacity have emerged. The first, and by far themost common, sees capacity as a general, aggregatedoutcome of a series of organisational conditions orassets or relationships that are part of an organisation orsystem - structure, culture, systems, tangible and intan-gible resources, staff, legitimacy, pattern of incentives,identity and confidence, leadership, and so on. In aneffective organisation these conditions combine to pro-duce capacity or the general ability to implement pro-grammes or deliver something of value to others.Capacity here means the general ability to perform.

The second perspective is to see organisations or sys-tems as a collection of more specific abilities distributedamong a variety of levels:

• Individuals obviously have personal abilities or attrib-utes or competencies that contribute to the perform-ance of the organisation or system.

• Organisations or broader systems have capabilities todo things such as manage stakeholders, facilitatecommunity development, carry out marine resourceassessments, manage financial resources, listen andlearn, empower staff, and so forth. Capabilities can beunderstood as the building blocks of an organisa-tion's overall capacity to perform.

• Organisations or systems try to connect these com-petencies and capabilities into some sort of coherentcombination or system that allows them to perform.

This focus on specific abilities is critical to understandingcapacity. Using the lens of specific competencies andcapabilities allows for a more focused operational discus-sion of the capacity issue - something that still eludesmany participants.10 But these abilities draw theirstrength and effectiveness from the deeper conditions ofthe organisation or system of which they are a part. Insystems terms, competencies and capabilities are emerg-ing properties of the system of which they are a part.

To get a deeper analysis of these issues, we are reviewingsome of the patterns that have emerged from the cases.

• The organisations needed all different types of com-petencies and capabilities in order to survive. Thosethat delivered value on the outside versus those thatwere needed only on the inside. Those that weretechnical and professional versus those that wereorganisational or logistical. Those that were limited toa few people versus those that were needed by allstaff. Those that were absolutely central or 'core' asopposed to those that were needed only up to a satis-factory level. Some seem to be transitory and play aparticular role at a particular time, while others areoften permanent, helping to sustain the identity andeven the existence of the organisation.

• One of the most pervasive patterns was the need forboth 'hard' (or technical/logistical) and 'soft' (orhuman motivation) capabilities. In many of the cases- Lacor Hospital, the Rwanda Revenue Authority, theESDU Unit of the Organisation of Eastern CaribbeanStates (OECS), ENACT in Jamaica - the participantsworked hard to combine hard and soft capabilitiesinto a coherent whole. Too much on the hard side andthe organisation began to flounder as a human com-munity. Too much on the soft side and it could notdeliver value to its clients and stakeholders. Amongthe most significant soft capabilities were those thatenabled an organisation to transfer or internalise corevalues over time, to adapt to change and to reach outto create networks with other organisations and tolearn. The challenge was for national participants andexternal agencies to collaborate in a way and at aspeed necessary to get the balance right.

Notes10 For a systematic way of analysing capabilities, see Ulrich

and Smallwood (2004) 'Capitalizing on capabilities'

Box 2: Inculcating standards and values in anorganisation

Dr Piero Corti and Dr Lucille Teasdale set up StMary's Hospital at Lacor in Northern Uganda in theearly 1960s. Their goal was to offer the best possi-ble service to the maximum number of people atthe lowest possible cost. For them, the capability toinstil a sense of medical professionalism in thestaff was key. The Cortis also saw the hospital'sability to live up to the values of Catholic humani-tarianism as central to its work. A core group of 15to 20 people within the hospital are now responsi-ble for transferring both these hard and soft skillsto all staff, mainly through the power of exampleon the job and through regular staff meetings. Thehospital's management approach of sharingresponsibility and involving staff at all levels isanother transfer mechanism.


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• Part of the process of capacity developmentinvolved the way organisations altered the pat-tern of the competencies and capabilities as theygrew in size and scope of action, and the complex-ity of their tasks increased. The Rwanda RevenueAuthority case tracks the evolution of the agencyover three stages and eight years. The COEP net-work in Brazil added logistical capabilities as itgrew beyond a certain size. The staff of ESDU inthe Eastern Caribbean worked as a group to addsoft capabilities in order to better meet the needsof the countries they serve. The Lacor Hospitaladded management capabilities as it wentthrough a generational change in leadership.

Over the rest of the research and analysis, we willconcentrate on a number of issues:

• We are doing more work to track the patterns ofgrowth in competencies and capabilities in orderto give a more evolutionary view of capacitydevelopment as it unfolds.

• We will include some analysis on how variousorganisations and systems have addressed thedevelopment of a particular capability, e.g. build-ing a capability for international project manage-ment in the Asia region of the IUCN, or how thelocal government system in the Philippinesimproved its collective capability to learn.

• We know more about the process of developingcapabilities at the level of single organisationsthan we do at the level of inter-organisationalgroupings or more complex networks or evenwhole societies. We intend to go more deeply intothis issue using the two cases of effective networkdevelopment in Brazil in order to better under-stand the process at that level.

2.4 Institutional and organisational change

We are trying to get a better sense of change issuesboth within organisations and across multi-organisa-tional systems. We are also trying where possible todisentangle national roles and interventions fromthose of external actors, which are discussed sepa-rately in section 2.6 below.

We remain puzzled about the relative lack of atten-tion being paid to change issues in developmentcooperation. In the private sector, an enormous litera-ture and body of experience exists, much of whichemphasises the difficulties and challenges involved indesigning and managing programmes of intentionalchange. The high rate of failure of change efforts inthe private sector has long been accepted as normaland has led to intensified efforts to master it as aprocess.11 In development cooperation, much of theanalysis seems to have a more technocratic, pro-grammed style that minimises the risks and booststhe apparent benefits to be achieved. Manyapproaches push a particular ingredient - incentives,participation, leadership, commitment, technicaladvice and support, and so on - that is felt to be thekey solution. Many capacity analyses also contain agood deal of prescription and advocacy but tend tobe short on understanding the dynamics of complexprocesses of change.

This tendency has led us to try and better understandthis issue as it unfolds in the real world. Two ques-tions have thus preoccupied us:

• What change strategies did the participants endup with, and why?

• How did capacity change and evolve in responseto these strategies. What worked and what didnot, and why?

We would also add two points about change in sup-port of capacity development. First, many capacityanalyses set out lists or sets of conditions that sup-port effective capacity development and contrastthem with those that hinder its emergence. But theirinformal application to most of the cases reviewedfor this study was not helpful. Many of these condi-tions have more to do with outcomes than withdetermining factors. On the face of it, most of thecases in this study faced uncertain or discouragingprospects for capacity development at the outset. Butthe more effective interventions contained an energy

Notes11 See Pasmore (1994) Creating Strategic Change: Designing the

Flexible High-Performing Organization; Senge et al. (1999)The Dance of Change: The Challenges to SustainingMomentum in Learning Organizations; and Kotter andCohen (2002) The Heart of Change: Real-Life Stories of HowPeople Change their Organizations.


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and a way of attracting support and resources thatenabled them to move to new levels of capacity andperformance.

The second has to do with the detailed design andstrategic planning of capacity interventions. We see nouniversal value in these techniques. In some cases inwhich a coherent approach had to be imposed across awide range of actors, planning and more centralisedpolicies had merit. In others that were more experi-mental and exploratory in nature, such as the growthof the COEP network in Brazil, the participants reliedon common values, informal networks and constantadaptation to maintain their coherence and direction.In these cases, few of the practitioners seemed to havemuch faith in grand capacity strategies. They had nosystematic 'plan' for capacity development in the con-ventional sense of that term, and few saw the oppor-tunity to formulate them. We will say more about dif-fering approaches to programming and design in thefinal report.

The importance of positioning One of the first issues to come to our attention is whatwe call 'positioning', i.e. the entry point for the selectedintervention and the change strategy that under-pinned it. The cases contained a wide range of posi-tioning strategies, some explicit and some not, somesuccessful and some not. Many were unconventionaland counter-intuitive.

• The Brazilian network COEP endeavoured to ener-gise and connect existing capacity for social devel-opment in Brazil housed in agencies such as thenational oil company and the post office. The strat-egy here was one of mobilising public resourcesfrom outside the public sector by a non-govern-mental actor.

• In the ENACT case in Jamaica, the organisationalunit charged with supporting capacity develop-ment in the environment sector, adopted a strategyof ‘responsive entrepreneurship’ in an effort toentice public agencies to volunteer to join the pro-gramme. This programme was positioned more as achallenge fund or a venture capital initiative ratherthan a supplier of more conventional supply-drivenprogrammes. The ENACT programme also used thetechniques of social marketing to encourageJamaican agencies to look at capacity issues.

• In the Russia trade case, the programme aban-doned a conventional training approach to capacitydevelopment in the Ministry and opted instead toset up a hybrid firm in the private sector that couldthen act as a support structure for the sector as awhole.

• In the Tanzanian case, the government and its sup-porters settled on a comprehensive, mandatory,long-term approach to public sector reform basedon what was felt to be international best practice.In the Ethiopia case, in the efforts to combatHIV/AIDS, the reverse strategy was adopted withsmall initiatives being put in place that would showresults within 100 days.

• In the case of the National Access Consortium(NAC) in South Africa, a group of social entrepre-neurs set up a semi-private technical college toincrease the intake of youth left unprepared by theapartheid educational system. The experimentencountered enormous obstacles in its attempt tointegrate itself into the wider public education sys-tem.

Box 3: A pragmatic and incremental changeprocess

In the Rwanda Revenue Authority, large-scale,comprehensive and predetermined reform pro-cesses have been avoided in favour of pragmaticand incremental approaches characterised byadaptation to emerging needs and priorities andprogression over relatively short time frames.Working incrementally has not meant, however,being non-strategic.


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pressures from other organised constituencies such asprofessional groups, exporters, commercial interestsand international funders intent on equippingTanzania to compete in a globalising world. This pres-sure energised Tanzanian reformers within govern-ment to press ahead in an effort to escape the weak-demand, weak-response dilemma that traps manyefforts at capacity development. The Rwanda RevenueAuthority showed a similar dynamic. The LacorHospital was based on a supply-driven interventionthat, in time, created its own legitimacy and led toincreased citizen demands. In these cases demand cre-ation seemed as important as demand responsiveness.

Some of the cases show the need to distinguish, whenit comes to supply and demand, between actions thatcan help to spark off capacity development and thosethat can act to sustain it. In a number of cases, theenergy of 'social entrepreneurs' mattered much morethan the initial level of demand. 12

Operating space An issue that appears in many of the cases was that ofoperating space, i.e. the degree of policy, operationaland financial autonomy that allowed actors the free-dom to invest in their own capacity development or tonegotiate for support. A number of actors - the LacorHospital, the IUCN - were positioned outside the publicsector and used their access to external financing toenhance their capacity and performance. Others, suchas the Rwanda Revenue Authority in the public sector,were managed under the general guidance of politicalauthorities but were given adequate buffering frompoliticisation. Maintaining an operating space was alsokey to achieving some sort of internal stability withinthe organisation, which, in turn, allowed staff the timeto reutilise or institutionalise various competenciesand capabilities inside the structure.

One of the most difficult aspects of the space issueappeared to be the achievement of the right trade-offsamongst operational autonomy, political support, per-formance and accountability. Too much autonomy andthe impetus to improve and perform could decline. Buttoo little could disempower the actors and lead to ero-sion in terms of capacity and performance.

The value of legitimacyThe legitimacy of an organisation within the systemin which it operates both contributes to, and comesfrom, a reputation and loyalty. Legitimacy, in turn,

We would emphasise again that capacity developmentis usually one of many agendas competing for atten-tion amongst both donors and country participants inwhat can be chaotic situations. Positioning representspart of the effort to capture attention, commitmentand resources in such contexts.

The influence of politics The influence of politics, not surprisingly, permeatedmost of the cases. Capacity development involvedshifts in roles, power, access to resources, relationshipsand identities, and these shifts took place at all levelsfrom the individual to the national. In most cases, con-flicting purposes had to be managed. Internal frag-mentation had to be reduced and the operating spacepreserved. In some cases, the process of capacitydestruction was crucial as groups and organisationsstruggled to renovate and reform older structures. Insome cases, making systematic efforts to improvecapacity made little sense given the pressures, vestedinterests and perverse incentives. In others, the sym-bolic manipulation of capacity images was a usefulstrategy.

We can see the case participants dealing with politicalfactors in a variety of ways. Some groups outside gov-ernment made consistent efforts to avoid any politicalidentification. The COEP network in Brazil and mostNGOs in Bangladesh fall into this category. Othersactively worked with political elites to ensure supportand protection, as in the case of the IUCN in Pakistan.Some used the buffering power of donors to fend offpolitical intrusions. All the leaders worked informally tomaintain their political credibility and legitimacy.

Demand and supply Current thinking, particularly with respect to dealingwith service delivery in the public sector, seems tofavour 'demand-side' approaches. Yet, the evidencefrom the cases was mixed on the effectiveness ofdemand-side approaches. None of the cases, for exam-ple, came with both a strong demand and a ready sup-ply. A number came with neither. Other cases werecharacterised by a low initial demand from organisedbeneficiaries sceptical about the government's abilityto deliver anything useful. What did appear in a num-ber of the cases was 'demand' from either internalstaff or other elite groups interested in improved per-formance. In the Tanzanian civil service reform case,there were weak demands from citizens but growing

Notes12 See Bornstein (2004) How to Change the World: Social

Entrepreneurs and the Power of New Ideas.


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produces a range of other benefits that bear uponthe capacity issue. It creates opportunities andacceptance. It opens up access to resources and pro-tection. It reinforces personal and organisationalidentities. Legitimacy stems from a variety of sources.Organisations and systems that persist over a longperiod of time and under difficult circumstancesseem to earn it. Organisations that symbolise a set ofvalues and meaning attract it. Organisations thatdeliver consistent public value earn it. But legitimacycan also come from factors unrelated to capacity andperformance that may have cultural, symbolic roots.

Systems effects Productive change can come about through whatsome participants have described as chemical reac-tions or spontaneous combustion. Systems theorylabels this phenomenon 'emergence'. The interven-tion was well positioned. A window of opportunitysuddenly opened sometimes unknown to all the par-ticipants. New participants entered the scene andothers left. A critical mass of factors and ingredientscame together, including the effects of events seem-ingly remote from the immediate focus of attention.Participants sensed movement and energy andgained confidence. A virtuous spiral of capacity devel-opment emerged and accelerated and began toimprove both capacity and performance. We do notfully understand this process well enough to be clearabout it. But it does explain more about effectivecapacity development than the linear, machine-build-ing perspectives that have dominated much of thediscussion in the past about capacity development.We will be issuing a discussion paper on this subjectlater in 2005.

The role of leadership Committed leaders - and followers - were at theheart of all the examples of effective capacity devel-opment. But leaders require particular qualities.Those who relied on a heroic model and who focusedon a variety of agendas other than capacity develop-ment frequently did more harm than good. Our con-cern here is the nature of the connection betweenleadership and capacity development. At least fourpatterns seem to have emerged. First, such peopleinfused energy and confidence into their staff. Theyovercame the sense of disempowerment that affectsmany in under-funded organisations. Second, theythought strategically and creatively about capacitydevelopment as an end in itself, as well as a means toachieve greater performance. Third, they used theirinformal networks, contacts and social standing toprotect the efforts of the organisation or system.Fourth, they adapted their leadership style as theorganisation grew around them. Most recognised thedangers of the 'founder's trap' and worked to over-come it.

Box 4: Creating space and maintainingindependence

The Environment and Sustainable DevelopmentUnit (ESDU) of the Organisation of EasternCaribbean States (OECS) in Castries, St Lucia, main-tained its operating space by managing and balan-cing its stakeholders. The unit had direct and clearrelationships with its key stakeholders, the MemberStates of the OECS. The organisation earned legiti-macy and trust from the Member States which, inturn, allowed staff to use outside support to main-tain operating space in their relationships with arange of stakeholders including external fundersand other authorising groups.

The legal status of the Rwanda Revenue Authority(RRA) - a semi-autonomous government agency -provided it with sufficient autonomy to take deci-sions and manage resources on professional princi-ples, and pursue its mandate without interferenceor distraction. Strong and visionary leadership,including from the Board, helped the RRA translatepolitical aspirations into results on the ground. Itcould also count on political support from thePresident who insisted on public service integrity,transparency and accountability as part of his cam-paign of zero tolerance towards corruption.

Approaches to human motivation Most approaches to change - and indeed mostapproaches to capacity development - revolve aroundconceptions of human motivation. We can see inthese cases that the various patterns of incentivesaffected both organisational and individual behav-iour in different ways.13 But we have also been struckby the way individuals in some of the cases appearedto act against their own self-interest in pursuit ofbroader goals. An exclusive emphasis on incentivestended to focus too much attention on interpersonaland inter-organisational conflict, and to ignore othersources of motivation such as value systems, normsand goals, organisational identity and social capital.Capacity interventions that gave people meaning or a

larger purpose attracted the kind of personal andorganisational commitment that fuelled major gainsin capacity. Change appeared to happen the fastestwhen the incentives and values supplemented andreinforced each other.

The importance of informal patterns of behaviour We were struck in some of the cases by the twoworlds of capacity. A number had deep indigenousroots and practices as their key elements. Formal,'modern' structures adopted from high-income set-tings had had been overlaid on these older, more tra-ditional structures but had not replaced them.14 Inmany cases, power and legitimacy came out of theinformal and traditional rather than the modern.Formal structures and institutions were kept goingfor the purposes of symbolic appearances. Yet the lat-ter, not surprisingly, received much more attention incapacity interventions funded by donors.

The change strategies that appeared most effectivewere able to operate well at both levels. They hadways of indigenising techniques from the outsideand modernising traditional practices and values.Capacity development was at one level aboutrespecting national values. But it was also aboutchanging them to fit with new challenges.


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Box 5: Inspired leadership and engaged followers

COEP, a national solidarity network in Brazil, iscommitted to building a just and inclusive socie-ty for all Brazilians, one without hunger andpoverty. COEP encourages its member entities (inBrazil's parastatal sector, along with businesses,educational institutions and civil society organi-sations) to support and participate in develop-ment projects, organise campaigns to mobilisepublic and institutional resources, and to coope-rate in their work to end poverty. Its success isfounded on its substantial intangible resources:

• creative and inspired leadership, which enjoyssubstantial legitimacy within the networkand beyond;

• a sustained capability for strategic thinkingand change; and

• the commitment, passion and energy of itsinstitutional members.

Together, these intangibles have created a socialand moral imperative to which COEP's membershave responded, using their considerable mate-rial, financial and professional assets to supportanti-poverty initiatives such as the Zero Hungercampaign.

Notes13 For a detailed analysis of incentive issues, see World Bank,

ADB and DfID (2004) 'Early signs of changing incentives forservice providers', in Devolution in Pakistan: Vol. 2, The RecentHistory.

14 There are many accounts of this process in the literature.See, for example, Dia (1996) Africa's Management in the1990s and Beyond: Reconciling Indigenous and TransplantedInstitutions; and Turnbull (2002) 'Solomon Islands: Blendingtraditional state power and modern structures in the state'.

Box 6: Changing attitudes

The Tanzania civil service reform programme ispresently in its fourth phase, this one focused onimplementing a performance improvementmodel. The emphasis is on changing the atti-tudes of public servants and encouraging newwork habits such as promptness, regular atten-dance and service to the public. There are eightaspects to the total system, of which one is servi-ce delivery surveys. In the Ministry of Lands, thehighly critical results of the survey helped to pro-vide further incentives, along with computerisa-tion of the system, for improved productivity. Theaverage time required for a land registrationdropped from 20 years to 1 or 2 years.

2.5 Performance

All the organisations reviewed struggled to untanglethe complex relationship between capacity and per-formance. We intend to give this special attention aswe proceed with the detailed analysis and reporting.In particular, the following issues need clarification:

• Given the systems properties of both capacity andperformance, a variety of other factors affectedtheir emergence. Most participants had notthought systematically about the interconnec-tions between the two concepts. In practice, mostdiscussions about capacity were about perform-ance or results and how to achieve them. Feworganisations produced a robust supply of infor-mation on performance. Furthermore, the linearprogression from inputs to outputs to outcomesto impact appeared in few of the cases.

• The time frame mattered. To sustain a long-termfocus on capacity development, short-term gainsin performance - 'quick-wins' - were essential, aswas evident in the Local Governance SupportProgramme in the Philippines. The question'capacity for what performance?' was often asked.But attention to the question 'performance forwhat capacity?' was also important. Interventionsthat achieved a high level of performance or evena set of 'quick wins' created the impetus forimproved capacity development.

• Practitioners, under pressure to sustain their posi-tion, frequently had to make risky trade-offs in theshort term between capacity development, per-formance and organisational survival. Many oper-ated in contexts that offered few rewards orincentives for destabilising investments in capaci-ty development that promised uncertain out-comes. In highly politicised environments, therewere much better ways to ensure protection andcontinued access to resources than the hard slogof complex organisational change. And, in rapidlychanging situations, the credit for gains in capaci-ty frequently went to others.

2.6 The role of external partners in capacity devel-opment

International funding agencies have widely acceptedthe value of national commitment as perhaps the keydriving force in capacity development processes. Thecases show that such agencies are shifting to moresupportive, facilitative roles. They often now act ascatalysts of change, encouraging reform processesthat redefine roles and responsibilities or stimulateinnovative practices.15 In many of the cases, interna-tional agencies were suppliers of financial and tech-nical resources to help implement activities focusingon personnel and organisational development.

DfID's substantial contribution to the RwandaRevenue Authority, for instance, enabled theRwandan authorities to speed up the pace of systemsand infrastructure development. In other cases, fund-ing agencies have contributed to strategic planning,brokering on policy matters, information exchange, aswell as confidence boosting. Such forms of processfacilitation are often intangible, and thus difficult tomeasure, but make an important contributiontowards reinforcing capacity development processes.In Takalar district, Indonesia, JICA played a major rolein stimulating new thinking and practices amongactors. It also played a strategic role in creating a pro-tected space within which innovative practices couldbe tested. As a neutral but influential outsider, itcould also facilitate linkages between actors thatrarely cooperated. In a related fashion, donors such asDfID in Ethiopia and Pakistan and, to a growingextent, AusAID in Papua New Guinea (in cooperationwith other development partners), could leverageinterest in and resources for a more programme-based and sector-wide approach to service deliveryimprovement, and in the process helped to create aframework for addressing the complexities of largersystems change.


14Notes15 Levy and Kpundeh (2004: 27) provide a useful chart

summarising this shift.

The cases reveal a number of issues that externalpartners need to think about when supporting capac-ity development work.

Product versus process Managing the tension between product and processhas been a continuing part of the debate about waysto improve donor interventions in capacity develop-ment, which has intensified with the recent emphasison results-based management. The cases we havestudied span the spectrum of choices. Some, such asthe education sector support programmes in Ethiopiaand Pakistan and the health sector programme inPapua New Guinea, saw capacity development as asecondary objective in supporting a wider package of'product' measures designed to achieve a particulardevelopment goal. At the 'process' end of the spec-trum, in its support to Takalar district JICA defined itsoutcomes in terms of changed behaviour and deci-sion-making processes. DfID's support to the RwandaRevenue Authority, whilst contributing to widerimprovements in economic management and gover-nance, focused squarely on organisational develop-ment and performance improvement. CIDA's supportfor the ENACT programme in Jamaica was principallyabout strengthening the capacity for environmentalmanagement across a range of stakeholders.

Not surprisingly, our thinking to date is orientedmore towards the process side of the debate. Indeed,much of the thinking coming out of the field ofhuman systems indicates how a tightly targetedfocus on outcomes can inadvertently reduce overallperformance. What is required in many cases is aview of capacity as an end in itself, i.e. 'means-based'as opposed to 'results-based' management. In thefinal report, we will say more about managing thistension and how that can best be done across arange of contexts and time frames.


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Box 8: Life without a donor

COEP is a Brazilian social solidarity network. Ithas grown from 30 organisations in 1993 to anationwide membership of 800-plus organisa-tions in 2004 using only Brazilian resources, suchas an annual grant for its secretariat from agroup of large Brazilian parastatals. The peopleactive in COEP also benefit from their employers'agreement that they work for COEP, often oncompany time. But COEP itself does not have aprogramme budget and is not a funding orgrant-making body. Instead, as a social solidaritycommittee, it challenges and encourages itsmember entities to use their resources creativelyin support of development projects and cam-paigns for social justice. To date, COEP has had norelationships with international funding agen-cies. The life of the network to date has thusbeen free of distracting debates with donors andthe stratagems and counter-stratagems of condi-tionality. Only now is it seeking external fundsfor specific projects to complement Brazilianresources.

Box 7: Developing capacity for tax administra-tion

The Rwanda Revenue Authority (RRA) adminis-ters the collection of taxes, customs and excise.Supported by DfID, it became, in just six years, arespected institution that helped increasedomestic revenue generation from 9.5% to 13%of GDP. The RRA and DfID developed a productiverelationship based on frank exchange, team spi-rit, shared accountability for results, and a locallydriven transformation process underwritten bystrong ownership. This has allowed externaltechnical and financial assistance to accompanythe local change process and to adapt to thelocal tempo of change and emerging priorities.


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Local practice versus external prescriptionThe cases demonstrate complex combinations ofexternal prescription and local innovation. At one endof the spectrum, funding agencies supplied detailedprescriptions. Most of these dealt with public sectorreform and involved the transplanting of techniques,strategies and organisational models developed inother contexts. The Tanzania civil service reform pro-gramme provides perhaps the best illustration ofsuch an approach. But this was not a case of simpleimposition by a funding agency. Many Tanzanian par-ticipants saw the arrival of 'new public management'as a measure of modernisation and access to globalbest practice. Other cases, such as Takalar district inIndonesia, came from the other direction and paidgreat attention to indigenous experimentation andthe development of customised strategies to capacitydevelopment.

The challenge for external partners is to strike theright balance between creating or leaving space forlocal innovation on the one hand, and drawing frominternational practice on the other. The Rwandanauthorities clearly valued DfID's combination of facili-tation support and the provision of substantive pro-fessional expertise on tax matters. In Mauritania, theWorld Bank has also succeeded in achieving the rightbalance in support of the government's plan to priva-tise its telecommunications provider.16 The issue sur-rounding the transplanting of techniques from onecountry context to another was the subject of somedebate in development circles in the 1970s and 1980s,but declined in the 1990s with the enthusiasm forglobalisation and best practice. But it remains an issuethat we will say more about in the final report. 17

Long versus short termIt is difficult to contest the general idea that inter-ventions in support of capacity development, espe-cially those aimed at comprehensive macro-change,require a long-term commitment from all the partici-pants, including international funding agencies. Yetthe cases point to a more complex set of calculationswhen dealing with time frames.

• In the Local Governance Support Programme inthe Philippines, a longer-term commitment couldonly be sustained by short-term gains. In a politi-cised environment, capacity development inter-ventions had to compete for resources and atten-tion with other priorities. Political leaders soon ranout of patience with and interest in capacityissues in the absence of emerging benefits. Thetrick appeared to lie in somehow balancing theshort and the longer term in a context of conflict-ing claims. Much of the success of 'quick-win'approaches centred on the need for generatingand maintaining energy.

• In some cases, the participants needed some way,

Notes16 See Wilhelm and Mueller (2003) The Ingredients of Capacity

Enhancement: Three Case Studies in Telecommunications,WBI Working Paper.

17 For an example of the renewed debate, see Jackson (2004)How Can Capacity Be Built through Cross-CulturalManagement?, paper prepared for INTRAC.

Box 9: Developing capacity for participatorydevelopment in the context of decentralisation

In Takalar district, Indonesia, JICA acted as a cata-lyst for stimulating change, inspiring new thin-king and creating space for experimentation. Thecontext was the shift from a highly centralisedmilitary government to one based on decentrali-sation. Despite a formal but largely ceremonial,even symbolic, process of bottom-up planning,there was little substantive engagement be-tween local governments and communities. JICAintroduced a model of participatory develop-ment, which recognised that communities pos-sessed indigenous capacities that could be mobi-lised. The programme resulted in importantsteps in changing mindsets towards workingwith local communities and other stakeholders.


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intuitive or explicit, of differentiating betweenprogrammes that had genuine potential over thelong term and those that were likely to producelittle of value. In the Russia trade case, two yearsinto the programme, a consensus emerged that itwould be better to bail out of an ineffective long-term strategy and shift to something dramaticallydifferent that had more chance of delivering inthe short and medium term. Without that abruptchange in course, much of the benefit of theinvestment would have eroded over time.

• It is useful to bear in mind that some of the part-ner organisations in the cases moved quickly tobuild their capacity. The Rwanda RevenueAuthority went from a dysfunctional structure tobeing a high-performance actor in only six years.In practice, international funding agencies strugg-led to keep up with the pace set by some of theircountry partners. The image of patient donorssticking with the ponderous pace of change insupport of capacity development did not holdacross all the cases.

Participants also needed to calculate the dynamics ofchange underpinning various capacity initiatives.Some actors stirred and shifted into action under thepressure of time. Others become defensive and dis-empowered. Some capabilities, especially technicalones that could be bought instead of made, could beimproved quickly. Others, such as an organisationalability to learn, took much longer. Creating and sus-taining a shared understanding about what needed apatient, long-term commitment and what requiredurgent, short-term action seemed key in a number ofcases, such as the Lacor Hospital and the Tanzaniacivil service reform programme. We will try to bemore specific in the final report about separating outthese categories.

The importance of learning The importance of learning in support of adaptationand change was clear across all the cases. The optimalapproaches to enhancing capacity development wereseldom clear at the outset of the effort. The problemswere invariably messy and complex and, in many cases,shifted in response to contextual factors, the arrival ofnew entrants, political conflict, differences in mandate,and so on. One of the key ways in which participantscould make sense of their situation was to learn aboutwhat worked and for whom, and how and why.

One obvious pattern that emerged was that of differ-ent learning styles. The ESDU group in the EasternCaribbean relied on an intensely personal, team-basedapproach best suited to a small homogeneous organi-sation. The Local Governance Support Programme inthe Philippines, in contrast, implemented a formal,structured methodology in which the participants inthe various municipalities moved sequentially thoughfour stages. The Rwanda Revenue Authority and theIUCN Asia region developed a culture and informalrules that encouraged staff to question, to reflect andto challenge. In other cases, practitioners valued con-tacts with other practitioners who were dealing withsimilar issues. We also noticed the lack of importanceattached to written accounts of capacity experiencesand the relatively small contribution to learning madeby formal training courses.

Box 10: AusAID - shifting from project to pro-gramme-based approaches

AusAID has been shifting towards SWAP typesupport, reflecting a desire for a more holisticapproach and more attention to local ownershipand policy dialogue. Previously, there was a fee-ling in PNG's health sector that they were 'drow-ning in projects' which placed significantdemands on government systems and made itdifficult to have a clear overall sense of thereforms. The shift towards a sector approach wasfurther seen as an opportunity to move to abroader approach to development cooperationand to address issues of management, leaders-hip, and inter-sectoral issues.

Most participants appear to value learning in principle,as do all funding agencies. We should be under no illu-sion, however, about the constraints to learning in sup-port of capacity development. Within many of thecases different ethnic and professional groups hadquite different views about the purpose and nature oflearning. Control-oriented bureaucracies succeeded agood deal of the time in suppressing it. Most organisa-tions, including those in the international fundingcommunity, found it difficult to confront learning thatchallenged cherished ideas or self-interests. Complexmulti-organisational systems struggled to understandthe implications of their collective experience. And fewmonitoring systems did much to encourage indige-nous learning systems. In the final report, we will sug-gest ways in which different learning styles can beshaped to facilitate capacity development both at thefield level and within international funding agenciesthemselves. 18


18

A focus on weaknesses versus strengthsMany capacity assessments have traditionallyfocused on deficits, gaps and weaknesses. Indeed,public sector management tends to be preoccupiedwith overcoming constraints rather than achievingtasks.19 Most capacity analyses are not clear on theinherent strengths and existing capabilities of thoseorganisations and systems to be supported. But thepattern emerging from the cases is mixed. Someexternal funding agencies did make efforts to sup-port existing strengths and opportunities rather thanbeing preoccupied with constraints and weaknesses.DfID built on the important ownership and commit-ment of government and management in the case ofthe Rwanda Revenue Authority. In Indonesia, JICAsought to validate the capacities that were presentwithin rural communities. ENACT's responsive entre-preneurship sought to tap into sources of energy andcapacity within the Jamaican environment sector.

These funding agency interventions were implicitlyfollowing the principles of 'appreciative inquiry', anassessment technique that appears to have genuinepotential in situations where capacity development isthe key objective. We will say more about the applica-tion of this technique in the final report.

Notes18 A good deal of work is already being done on this subject.

See, for example, King and McGrath (2004) Knowledge forDevelopment?: Comparing British, Japanese, Swedish andWorld Bank Aid, and Carlsson and Wohlgemuth (2002)Learning in Development Co-operation, p.2

19 See Wilson (1989) 'Constraints', ch.7 in Bureaucracy: WhatGovernment Agencies Do and Why They Do It.

Box 11: Learning from experience - the healthsector in Papua New Guinea

The Health Sector Support Programme's annualreview identified a number of 'conditions for suc-cess' for HSSP advisers:

• the need to take a 'stepwise approach', i.e.limiting the number of objectives;

• the need for early success, reflecting, amongother things, the fact that many health per-sonnel are 'demotivated by the continualfocus on poor performance';

• allowing sufficient time to strengthen capaci-ty - linking capacity building plans to annualactivity plans and strategic plans is seen ashelpful in this respect;

• exposing partners to best practices, e.g.through twinning arrangements;

• joint development of plans - to strengthenownership and ensure their 'owner friendli-ness';

• modelling management styles and workbehaviours;

• ensuring a clear understanding of the con-text, including factors that affect efforts tobuild capacity; and

• addressing the limited understanding ofcapacity building/development, which wasfrequently equated with training.

nance to individual leadership to access to resources.We are particularly interested in the 'soft systemsmethodology' (SSM) developed in the late 1980s andwhich is now being applied to address a variety ofpublic sector issues in several countries.20 SSM isspecifically designed to help participants deal withmessy complex situations characterised by uncleargoals, contested strategies and uncertain outcomes -conditions that were in evidence in most of the caseswe reviewed. The application of systems analysis canalso provide participants with new perspectives on arange of capacity issues, including thinking aboutcause and effect, finding the most productive pointsof intervention, product versus process, the relation-ship between capacity and performance, and manyothers. The challenge is to understand these complexsystems dynamics and help engage participants toaddress them. We are intending to hold a workshopon systems methods in March 2005, followed bysome collaboration with Sida, which has directlyaddressed systems issues in its thinking about capac-ity issues.21

Capacity assessment frameworks Many analytical frameworks are nominally used toassess capacity, but most seem inadequate. Many areunclear about the nature of capacity. They tend tofocus on individual organisations. They are notdesigned to capture shifts in capacity over time. Theyalso tend to be reductionist in orientation with littleattention paid to systems interrelationships. But thenature of new approaches is not obvious. Frameworksthat try to capture the obvious complexity are notlikely to be practitioner-friendly. Those that focus onlimited aspects of capacity development in order toreduce the complexity also miss key elements. We areworking with a variety of groups to look at this issueand will issue a paper on capacity frameworks in thesummer of 2005.

The policy and operational implications for interna-tional funding agencies Much of the discussion on capacity development con-tains two themes: first, the idea of capacity develop-ment as moving to the centre of the developmentdebate, and second, the idea of international fundingagencies as non-political, technocratic actors in a con-stant search for more effective methods of capacitydevelopment.

We support both of these ideas but are concernedabout giving them shape and relevance. Despite allthe rhetoric, the whole idea of capacity comes with a


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3 Operational issues forfurther study Part of the study is designed to get a better concep-tual and strategic understanding of capacity issues.But it also addresses the challenge of convertingthese insights into operational guidance for busypractitioners both in partner organisations and ininternational funding agencies.

Monitoring and evaluationWe have been struck in the cases by the modest con-tribution of monitoring systems to capacity develop-ment. Most monitoring systems were designed byfunding agencies to address their own accountabilityneeds. These agencies have tended to focus on a widevariety of issues such as performance or generalmanagement, but seem to be uncertain about whatthe monitoring of capacity development would actu-ally entail. Many seem disconnected from local learn-ing and knowledge systems. Most participants in thefield were also uncertain about what data gatheringtechniques would work best for such a task, given theoperational constraints within which they work, andnational participants were frequently unconvincedabout the added value of such efforts.

We are tracking a number of programmes that haveshown promise (e.g. the monitoring and evaluationsystem being developed for the Tanzania civil servicereform programme) and intend to work with a num-ber of other interested organisations to extend ourthinking on this subject including the InternationalDevelopment Research Center (IDRC) in Ottawa,Canada, the International NGO Centre for Trainingand Research (INTRAC) in Oxford, UK, and, hopefully,the African Capacity Building Foundation (ACBF) inHarare, Zimbabwe. A discussion paper on monitoring,and discussions within the context of a larger meet-ing are planned for the autumn of 2005.

Systems thinking As noted elsewhere, in the final report we intend tointroduce some ideas to do with systems thinking.One of the main patterns to emerge from the cases isthat of systems behaviour and its implications forcapacity issues. Capacity appears to be an 'emergent'property that derives from the interrelationshipsamong a series of other factors, ranging from gover-

Notes20 For a summary of systems thinking and its operational

applications, see Chapman (2002) System Failure:WhyGovernments Must Learn to Think Differently.

21 See Gustafsson (2004) Capacity Development byStrengthening Systems of Organizations and Institutions.


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good deal of ambivalence and uncertain levels ofcommitment from many quarters. It has limited intel-lectual respectability given its lack of connection toany established academic discipline. For many, it hasno identity as an activity apart from its sectoral con-text. In donor countries there are no domestic lobbies(e.g. such as those for gender, the environment,human rights, or even governance) pressing for itsconsideration. It does not lend itself well to the cur-rent concern with measurable results. Senior politicaland bureaucratic officials in both high- and low-income countries see little value in capacity develop-ment as a platform for maintaining the flow ofresources. General publics find it hard to understandwhat the concept or its implementation add up to.Most support for the idea comes from middle-levelofficials and practitioners who must struggle to makeaid interventions function and last.

Assuming that the Govnet wishes to press the mat-ter, what can be done? We suggest two approaches.

• The case for making capacity development a seri-ous priority still needs to be made.22 The DAC'Good practices' paper23 will help in this regard.The international development community alsoneeds to step up its own research on capacityissues in line with the trend in the non-profit andprivate sectors.

• International funding agencies face their owncapacity issues. Do they have the competenciesand capabilities needed to address them? Whatare their strengths and gaps? What does bestpractice look like in terms of donor capacity? Dothey have a strategy of some sort to develop theircapacity assuming that more is needed? What, inshort, are the implications of giving any additionalpriority to capacity development?

Notes22 Nor is this situation limited to development cooperation.

For an effort to make the case for the US non-profitcommunity, see Light (2004) Sustaining NonprofitPerformance: The Case for Capacity Building and the Evidenceto Sustain It. For another discussion of this issue, seeLavergne (2005) 'Thoughts on capacity development - whatit means and why it matters'.

23 OECD, 2005


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4 The steps required tocomplete the study The ECDPM study has reached the consolidationphase. We are currently engaged in three types ofactivity to achieve that consolidation. We are review-ing all the cases completed to date in an effort tobring out the complex patterns of capacity develop-ment. We are working to complete the cases still inpreparation. We are also building on the results of thewider literature review in order to be better ableinterpret the patterns that appear to be emerging.

Our intention is to address some of the key issues in aseries of discussion papers, some of which will bereviewed in a series of small workshops with peoplewho have worked specifically on these issues. Thesetopics are likely to include capacity development interms of demand- and supply-side approaches, capac-ity and legitimacy, analytical frameworks, the moni-toring and evaluation of capacity development andnetworks as a form of capacity.

More specifically, to bring the study to a conclusionby the end of 2005, we are planning the followingseries of activities:

• A three-day meeting in Maastricht involvingECDPM staff and some of the case analysts inmid-March 2005 to review the results of the casesand the emerging conclusions

• A two-day meeting in Maastricht to review a draftdiscussion paper on a systems approach to capaci-ty issues.

• A presentation on systems approaches to theLearning Network on Programme-basedApproaches (LENPA) in Washington, DC, in April2005.

• A workshop with Sida in Stockholm later in 2005on the results of the research, focusing on systemsapproaches, analytical frameworks and monitor-ing and evaluation.

• Discussions on a paper on monitoring and evalua-tion, possibly in the context of the LearningNetwork on Capacity Development (LenCD) inBerlin in the autumn of 2005.

• A consultative workshop in the autumn of 2005that will bring together researchers, contacts fromthe field cases, advisers and donor representatives

to discuss the results of the research, their impli-cations and the recommendations for the finaldraft report. Ideally, this session will involve nomore than 40 to 50 people.

• The further development of outreach to a wideraudience with cases, background resources, inter-mediate reports, and interactive exchanges on var-ious issues. This will be done via Capacity.org,ECDPM's website on capacity development issues,and other networking mechanisms.

• ECDPM will publish three categories of docu-ments:Analysis - the case studies, 6 of which have beenpublished and 11 are now in draft form, and twomore are in process.Reflection - short papers on specific themes suchas systems, networks, etc.Synthesis - The final report will be published inmore than one format, probably including a longpaper synthesising the whole study, a shorterpaper with policy implications, and an issue ofCapacity.org focusing on operational aspects.

We hope that the total of these activities will form alogical continuum, including feedback from differentstakeholders and opportunities for dialogue and syn-thesis.


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BibliographyADB, DfID and the World Bank, 2004. 'Early signs of changing incentives for service providers', in Devolution inPakistan, vol.2, The Recent History, March.

Baser, H. 2004. 'What is capacity? Going beyond the conventional wisdom', News from the Nordic Africa Institute,No.2, p.13. www.nai.uu.se/newsfromnai/arkiv/2004/news2_2004.pdf

Blumenthal, B., 2004. Investing In Capacity Building: A Guide to High-Impact Approaches. New York: FoundationCenter.

Bornstein, D., 2004. How To Change the World: Social Entrepreneurs and the Power of New Ideas.

Campbell, T. and Fuhr, H., 2004. Leadership and Innovation in Sub national Government: Case Studies from LatinAmerica, WBI Development Studies.

Carlsson, J. and Wohlgemuth, L., 2002. Learning in Development Co-operation, Expert Group on Development Issues.

Chapman, J., 2002. System Failure: Why Governments Must Learn to Think Differently, London: Demos.

Dia, M., 1996. Africa's Management in the 1990s and Beyond: Reconciling Indigenous and Transplanted Institutions,Washington: World Bank.

Gustafsson, L., 2004. Capacity Development by Strengthening Systems of Organizations and Institutions, CapacityDevelopment Working Paper No.16.

Jackson, T., 2004. How Can Capacity Be Built through Cross-Cultural Management? paper prepared for INTRAC.

King, K. and McGrath, S., 2004. Knowledge for Development?: Comparing British, Japanese, Swedish and World BankAid. Cape Town: HSRC Press.

Kotter, J.P. and Cohen, D.S., 2002. The Heart of Change: Real-Life Stories of How People Change their Organizations.Boston: Harvard Business School Press.

Lavergne, R., 2005. 'Thoughts on capacity development - what it means and why it matters: relating CD to other con-ceptual perspectives', internal CIDA memo, 2 January 2005.

Levy, D. and Kpundeh, S., 2004. Building State Capacity in Africa: New Approaches, Emerging Lessons, WBI DevelopmentStudies. Washington: World Bank Institute.

Light, P.C., 2004. Sustaining Nonprofit Performance: The Case for Capacity Building and the Evidence to Sustain It,Washington: Brookings Institution.

Matsuda, Y., 2003. Peru Institutional Governance Review, Washington: World Bank.

McKinsey and Co., 2001. Effective Capacity Building in Nonprofit Organizations, prepared for Venture PhilanthropyPartners.

Nadvi, K. and Robinson, M., 2004. Pakistan Drivers of Change: Synthesis and Policy Implications, Brighton, UK: Institutefor Development Studies.


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OECD, Development Assistance Committee: Living up to the Capacity Development Challenge: Lessons and GoodPractice. Draft of January 12, 2005.

Pasmore, W., 1994. Creating Strategic Change: Designing the Flexible High-Performing Organization. Chichester: Wiley.

Rockefeller Foundation, 2004. What is Capacity and Why Do We Devote One-Third of the Portfolio to Building It?Rockefeller Foundation Capacity Building Review.

Senge, P. Kleiner, A., Roberts, C., Ross, R., Roth, G. and Smith, B., 1999. The Dance of Change: The Challenges ofSustaining Momentum in Learning Organizations. New York: Doubleday/Currency.

Turnbull, J., 2002. 'Solomon Islands: Blending traditional state power and modern structures in the state', PublicAdministration and Development, vol.22.

Ulrich, D. and Smallwood, N., 2004, 'Capitalizing on capabilities', Harvard Business Review, June.

Wilhelm, V. and Mueller, S., 2003. The Ingredients of Capacity Enhancement: Three Case Studies in Telecommunications,WBI Working Paper. Washington: World Bank Institute.

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Study on Capacity, Change and Performance

Interim Report

Peter Morgan, Tony Land and Heather Baser

European Centre for Development Policy Management

April 2005

The European Centre for Development Policy Management (ECDPM) aims to improve internationalcooperation between Europe and countries in Africa, the Caribbean, and the Pacific.

Created in 1986 as an independent foundation, the Centre’s objectives are:

• to enhance the capacity of public and private actors in ACP and other low-income countries; and

• to improve cooperation between development partners in Europe and the ACP Region.

The Centre focuses on four interconnected themes:

• Development Policy and EU External Action• ACP-EU Economic and Trade Cooperation• Multi-Actor Partnerships and Governance• Development Cooperation and Capacity

The Centre collaborates with other organisations and has a network of contributors in the European and theACP countries. Knowledge, insight and experience gained from process facilitation, dialogue, networking,infield research and consultations are widely shared with targeted ACP and EU audiences throughinternational conferences, focussed briefing sessions, electronic media and key publications.This study is being done under the aegis of the Network on Governance of the Development AssistanceCommittee of the OECD and has benefited from the support of a variety of donors, including the UKDepartment for International Development (DfID), the Netherlands Ministry of Foreign Affairs, the CanadianInternational Development Agency (CIDA), the Japanese International Development Agency (JICA), the SwedishInternational Development Agency (Sida), and the Australian Agency for International Development (AusAID).Several country organisations made financial contributions to the costs of their cases, including St Mary'sHospital Lacor in Uganda, the Committee of Entities in the Struggle against Hunger and for a Full Life (COEP) inBrazil, and the Asia Region of the World Conservation Union (IUCN).

For further information, please consult: www.capacity.org or www.ecdpm.org or contact Ms Heather Baser([email protected]).

ISSN 1571-7569

interim report jan 05 ED - JD changes - final

Documents

Transcript of interim report jan 05 ED - JD changes - final