A step change in capacity development

DEVEX
Warren Turner

Tufui Faletau stands outside the Treasury building in Nuku'alofa, Tonga. Photo by: Asian Development Bank / CC BY-NC-ND

ADB recently reviewed its approach to capacity development in developing member countries, broadly defined as the process where a country raises its capacity to manage its affairs successfully.

It is the most comprehensive review since ADB’s approach was adopted in 2007 with around 140 country strategies and projects assessed. We also surveyed more than 50 departments and agencies in developing member countries and 130 ADB staff.

So what are the findings and what have we learned that can guide our future efforts?

Predictably, the review finds strengths and weaknesses in ADB’s approach. A major achievement is the elevation of capacity development to a corporate priority. Alongside governance, capacity development is one of the five major thematic areas under Strategy 2020, ADB’s long-term strategic road map. Another is mainstreaming capacity development in our operations. Between 2008 and 2015, the annual number of approved operations contributing to capacity development increased by 75 percent. The financial value of these operations was about 150 percent higher in 2015 than in 2008.

Across countries and sectors, we noted good practices that fully meet our quality criteria. These are in country ownership, baseline assessment, attention to country context, results frameworks, and a focus on the different levels of capacity development — individual, organizational, networks, and institutional enabling environment. There are successful long-term, sectorwide approaches aimed at comprehensive reforms. Meanwhile, newer modalities, such as facility-type technical assistance, multitranche financing facilities, and results-based lending, provide more flexibility to adapt to changing circumstances.

Where we could do better is in ADB’s internal support systems. Guidance on how to address institutional and capacity issues could be improved with more targeted learning and knowledge sharing. Operational processes could draw more focus onto quality of support, including diagnostic depth and quality. Results frameworks should reflect outcomes at levels that would indicate enhanced capacity. There is also a strong preference for advisory support and fewer cases where knowledge services, innovative solutions, and collaborative practices are applied.

Three important trends in capacity development have emerged over the last decade. They are worth considering as we look into the future.

1. An increasing focus on higher-level results.

The broad concept of capacity development — and of the related concept of governance — is being replaced by a sharper focus on institutional performance. At the outcome level, capacity development aims at building performing and responsive institutions that deliver better development results to citizens. Lower levels of accomplishment — such as the number of people trained — are accepted less as valid capacity results. In and by themselves they do not ensure that better institutional performance will follow, even if they may be valid activities on the road to better performance.

2. There is greater attention to local context and drivers of change.

Capacity development needs to factor in political economy and reform readiness issues in a concrete and practical way, rather than relying exclusively on technocratic blueprints of best practices. Problem-driven, iterative and incremental approaches are gaining ground, especially in settings where the institutional and governance starting points are weak. For countries further along their development trajectory, exposure to cutting edge practices, knowledge and innovations are now more in demand.

3. The development community is looking beyond traditional support.

There is a shift away from a narrow focus on training, which has been synonymous with capacity development no matter its actual effects. Knowledge-sharing and innovation practices are being applied as drivers of learning, change, and enhanced performance. Peer exchanges between countries are on the rise where there are successful experiences to share. There are also less hands-on approaches, working through or in partnerships with research institutions, the private sector, and civil society.

Why is there a need for a step change?

Better performing institutions matter for the Asia-Pacific region, and thus for ADB. An enabling environment for inclusive economic activities and services hinges on institutions performing well.

Both the landscape of institutions and the public sector itself are changing rapidly. Cross-sectoral and complex challenges such as income inequality, gender disparities, green growth, urban development, and financial sector regulation demand new capabilities. There is an increasing focus on the role of subnational governments, the private sector, and citizens in how services are produced and delivered. The traditional image of omnipotent bureaucrats towering behind paper-stacked desks is fading, while consultative, entrepreneurial, and innovative practices are gaining ground.

Public sector performance in the region has gradually improved, but significant challenges remain. There are also contrasting patterns of institutional performance between and within countries. This picture of diversity offers new challenges, but also opportunities for different solutions.

With the international community reaffirming its commitment to capacity development in the Sustainable Development Goals, we must refocus our approaches to supporting better performing institutions. At ADB, we are looking at the integration of capacity development and governance actions as means to achieve specific institutional performance. It is recognized that effective, accountable, and transparent institutions foster more cost-effective delivery of infrastructure and services, stimulate inclusive growth, and enhance development effectiveness.

We find that global networks are promoting similar directions and provide helpful platforms for deepening the discussion among development actors. They include the Effective Institutions Platform, Development Partners Network on Decentralization and Local Governance and more recently, the Doing Development Differently community.