CAPACITY DEVELOPMENT : BUILDING EFFECTIVE NATIONAL INSTITUTIONS Presentation by: Joseph Chognuru, MoFEP Christian Joly, Embassy of France GOVERNMENT OF GHANA CAPACITY DEVELOPMENT MECHANISM

OBJECTIVES OF PAPER Deepen the discussions of Capacity Development as development issue Discuss theoretical and comparative views on effective national institutions Emphasize the primordial role of state institutions Outline the Ghanaian context of capacity development and effective institutions

The need for capacity development Ghana requires the availability of ‘transformational capacities’ at all levels to ensure shared, inclusive and sustainable development. Ghana does recognize the overarching role of capacity development in its development process as expressed in the Coordinated Programme of Social and Economic Policies, GSDA , Ghana Aid Policy and other policy documents. Government has translated these policies into concrete action, has adopted capacity development as an agenda in its own right by piloting the Capacity Development Mechanism and significantly contributed to the reflection on effective institutions and capacity development at the 4th High Level Forum on Aid Effectiveness in Busan.

Definition of Capacity Development (CD) Varying definitions of CD articulated by some of the multilateral and bilateral development organizations. Central theme: CD is a process of change, and, hence, is about managing transformations. Takes place at three levels : individuals, organizational / institutional, societal.

Centrality of Capacity Development A new consensus (cf. Busan) on supporting and strengthening institutions and policies to ensure they are effective in delivering or enabling the delivery of public services. That means: Result-focused transformational capacity development should be a key focus of the country-led plans and actions for development effectiveness To recognize the necessity to mainstream/integrate capacity development in all sectors and programs. That capacity development is not just an add-on, an afterthought, but requires an engaged political leadership to put capacity development at the centre of country-led development priorities.

The Centrality of the State in Economic Transformation The focus on national institutions goes with the idea that the State has a central role to play : There is strong and ample evidence that today’s advanced economies relied on government intervention to ignite and facilitate their take off and catch-up process. Effective State institutions facilitate private investments and capital flows as well as improve the quality of public infrastructure and the policy environment. In a recent work, “Why Nations Fail”, James Robinson and Daron Acemoglu argue that effective institutions are determinant in the capacity of a society to produce wealth and get developed. Argument that the main source of divergence between societies, between the well-functioning ones and the not so well functioning ones, is not the culture (religion, attitudes, values), nor geography (climate, topography, health environment), but the institutions : there is an institutional model that unleashes growth, while there are institutional settings that do not unleash growth.

Building Effective National Institutions All levels of national institutions must be considered : from the constitutional bodies - the executive, legislature, judiciary, independent constitutional bodies – down to implementing agencies and local government institutions. Attention must be paid to the interaction among the different national institutions and services (co-ordination, processes, procedures). Building Effective National Institutions is an issue that refers to constitutional reform, public sector reform, public finance management, monitoring and evaluation… Goes with a strong commitment to the rule of law, engagement and participation of the citizenry. Goes with a certain degree of centralization (State must be able to effectively enforce law and order and a coherent vision of development that transcends regional disparities.

Building Effective National Institutions The impact of capacity development on building effective national institutions is influenced by a number of factors among which the capacity to foster and accept change is key (“creative destruction”). Capacity development leads to shifts in roles and responsibilities. Capacity development can unsettle vested interests in any institutional structure and established power structures and require changes in behaviour, norms and values; it implies a change in attitude / mindsets It is necessary to create appropriate political and social incentives and mobilize strong political ownership and commitment. Requires political leadership.

Building Effective Institutions in Ghana Since independence, Ghana’s economy has swung between economic prosperity and decline. Over the last decade, the Ghanaian economy has been growing consistently, averaging about 6% year-on-year. Recent Imperatives the recent rebasing of Ghana’s National Accounts, Ghana’s economy moved from a low income economy status to a lower middle income economy status Also, emerging areas under the economy equally demanding capacity development are the areas of oil and gas. Financial and food crisis and climate change as well as accelerated growth agenda Busan HLF4 Outcome

Past and Present Public Reforms in State Institutions Over the past two decades, efforts have been made to bring about public sector reforms aimed at increasing the capacity of the public and civil services for efficient service delivery, especially in support of the private sector. These efforts have primarily focused on: Pay, productivity and pension reform; Organizational restructuring of the civil service and training; Development of a human resource management framework and a comprehensive database; Preparation of a service delivery improvement programme; Support for the decentralization programme; Subvented agencies reform; Central management agency reform.

Past and Present Public Reforms in State Institutions….. The outcome of efforts to date points to : The existence of critical bottlenecks, The need for consensus building, Improved participation and consultations among the range of stakeholders that constitute an integral part of the policy formulation process The need for a desirable mechanism for promoting and consolidating broad national ownership. In effect the need for a harmonised and a coordinated approach to capacity development

Past and Present Public Reforms in State Institutions…… A more recent effort is the Capacity Development Mechanism launched in 2011. The Capacity Development Mechanism (CDM). Is expected to approach capacity development in the public service in a holistic and harmonized manner with a view to ensuring an all-inclusive mechanism that can serve the Government’s strategic capacity development needs. The pilot phase is designed to support proposals that can bring about long- term and sustainable capacity in Ghana’s public service and is also expected to bring together both Government (GoG) and Development Partners (DPs) resources and synchronize them through the national budget process. These proposals are focused on the concept of organizational change for performance improvement. So far the best proposals from eleven (11) public sector organizations have been selected through a competitive process. There is a high level Steering Committee, with membership from across Agencies and a Secretariat established within MOFEP

Potential Areas for Capacity Development Strengthening National Capacity to Enforce Rules and Regulations and Discipline Reforming the Constitution: an opportunity for more effective institutions Improving Coordination Placing Employment Creation at the Center of Public Policies Developing Capacities at Sub-National Level Towards e-government

CONCLUSION The Capacity Development Mechanism initiative is an appropriate response by government to address public sector capacity challenges as it draws on actual Ghanaian practices, reform objectives and international best practices. Capacity Development should be considered both as a means to enhancing development effectiveness and also an end in itself in the sense of building a modern institution-based state.

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