1 CAPACITY AND ITS DEVELOPMENT: NURTURING AND UNLEASHING CAPACITY: New challenges in light of Programme- Based approaches International Policy Workshop New Challenges for Technical Co-operation Joint Donor Approaches Bonn, 2-3 November 2004 Paul Isenman Development Co-operation Directorate, OECD

2 DAC Principles of Technical Assistance Institutional development ("planned in a sectoral context…build on existing institutions and capacity, public as well as private, and avoid the promotion of parallel structures. Improved functioning of governments and civil services. Greater attention to costs and cost-effectiveness. Recognition of private sector needs. ("central importance of a dynamic private sector"). Improved co-ordination "Recipient countries should…empower a central ministry…to establish the policies and procedures for TA“. “Sustainable development…must be locally owned. The role of external partners is to help strengthen capacities…”.

3 These findings are from the 1992 DAC Principles for Effective Aid. Not a reason for discouragement. Rather for understanding of perseverance to move to different action Strong evidence of the extremely high costs of highly fragmented TA. Not going to try to summarise DAC GOVNET good practice paper we working on here.

4 Unleash existing capacity nationally and internationally “Build on existing capacities rather than creating new ones.” (Source: UNDP “Default Principles”) “Scan locally and globally; reinvent locally.” Role of diasporas. Role of private sector, academic institutions and CSOs Build on strengths, not just on solving problems. Incentives to unleash existing capacity: Use it or lose it. Unutilised or underutilised capacity dissipates.

5 What's different about TA for Programme-Based Approaches and Joint Financing? Alignment – strategies (PRS), policies, systems. Support government capacity development plan closely linked to PRSP Harmonisation -- in support of alignment. The most aligned and harmonised TA would be either: –joint financing for the capacity development plan, or –making financing for that plan part of overall budget support. Still plenty of room for information exchange, dialogue, and selective TA projects

6 WHERE IS TA NEEDED SPECIFICALLY IN SUPPORT OF PROGRAMME-BASED APPROACHES? –Planning and implementing PRS, including government’s capacity development strategy –Support for specific ministries, organizations, systems needed for PBAs. –Ongoing DAC work on capacity in PFM and Procurement. –Managing for Development Results; Monitoring and evaluation -- (including statistics – PARIS 21) –Harmonise support for harmonisation.

7 Enabling environment for capacity development Governance –Political – democratization, human rights, security –Security system reform (Security System Reform and Governance: Policy and Good Practice 2004) –Participation and accountability (DAC Partnership Forum on Anti-corruption 9-10 December, 1004) Economic policy and governance: market economies require strong government institutions (POVNET) Education at all levels. Gender issues: (GENDERNET work on SWAPs.) Let’s not fool ourselves on what can be done by technocratic solutions.

8 Four summary points: Build our common understanding of how to unleash as well as how to develop capacity. See how donors can work better together in support of country-owned and led strategies, programmes and processes. Set our work on capacity in the context of broader donor efforts to increase aid effectiveness. Make more progress in moving from principle to practice -- to results on the ground.