DEVELOPMENT PUTTING KNOWLEDGE TO WORK FOR DEVELOPMENT SEPTEMBER 2005 33716 \ B () ITT" 1SIS S I I·: his issue of Development OUTREACH focuses on T the critical importance of capacity to develop - ment and to the efficient and effective use of donor assistance. The theme of Capacity Day held by the World Bank in June was that "capacity matters." This is also the message conveyed on these pages by the authors, who represent different voices from different perspectives. For years, if not decades, capacity development has been a main concern in the development community, and yet there is still little agreement about exactly what it means, and perhaps even less agreement on how to do it. The guest editors of this special report address these questions, not in theory, but in the context of substantive and country-specific needs. Moving away from the traditional view that capacity development depends mainly on government reforms and improved individual skills, they support the more recent per- spective that it is "a long-term process requiring atten- tion to both the supply and demand sides of the capac - ity challenge." They argue that although supply- side initiatives, such as management reform, have been the driving force in the past, it is now imperative to strengthen the demand side by, for example, developing civil society's ability to engage and advocate for their needs, creating pressure and incentives for good publiC performance. Evidence suggests that inclusion and participation in the decision processes, program ownership, partnering, monitoring, and results - based accountability have yielded the most successful cases of capacity development worldwide. They have been the base for good governance. The view that good governance is the key to capacity development is reflected in each one of the articles. The overall message is not only that " capacity matters," but that the key to capacity development is in the hands of the people. Sunetra Puri EXECU TIV E E DI T OR VOLUME SEVEN, NUMBER FOUR ell.> SEPTEMBER 2005 PAGE 9 PAGE 18 PAGE 21 SPECIAL REPORT 18 Civil Society Development in Ukraine CAPACITY AND DEVELOPMENT and The Orange Revolution VIRA NANIVSKA In Ukraine democratic institutions that ensure participation were 2 Capacity for Development built gradually from the grassroots with the help of international Guest Editorial donors. MICHELE E. DE NEVERS, FRANNIE A. L£AUTlER, AND SAMUEL K. E. OTOO 21 Where Next? Building Local Capacity This editorial defines capacity development and highlights its in Governance functions and challenges. BY DANIEL KAUFMANN AND FRANCESCA RECANATINI This article describes an array of governance indicators that 6 Today's Critical Challenge: Building provide a way of benchmarking country performance to promote Capacity to Achieve the MDGs transparency and accountability. KEMAl DERVIS It is essential for poor countries to develop capacity in order to 25 Looking Forward: A Results-Oriented translate the envisaged large increase in aid into greater progress Model towards the MDGs. NilS BOESEN This article highlights the importance of viewing the organization 9 State-Building as the Core of Capacity as the appropriate target for intervention, with a strong focus on Development outcomes. FRANCIS FUKUYAMA The author argues that strengthening state institutions is the key 28 A New Framework for Social Development MARY MCNEil AND MICHAEL WOOLCOCK to generating capacity and lifting underdeveloped countries out of poverty. Drawing lessons from a successful Indonesian project, the authors argue that capacity development is a stop-go process 12 Five Key Messages: Recommendations that must be sustained over a period of time and among a wide range of stakeholders. for Capacity Development in Africa CAlliSTO MADAVO African governments and societies must take the lead in 31 Beyond 200S: Changes in Donor Roles capacity development, which needs to be approached as a and Behavior core area of country strategy for growth and poverty reduction. RICHARD MANNING Emerging areas of consensus among donors about their role and 15 Post-Conflict Mozambique's behavior in ensuring that capacity development efforts are fully Reconstruction: A Transferable Strategy owned by recipient countries. lUISA DIOGO The author reinforces the importance of country ownership 34 VOICES FROM THE FIELD and participation in her overview of the implementation of Mozambique's development agenda. 36 BOOKSHELF 38 KNOWLEDGE RESOURCES 40 CALENDAR OF EVENTS tries. The global experience of the past several decades · \Vhat exactly is capacity and how is it amply illustrates that money alone will not yield the developed? required results. The pace of development is determined by the volume of available resources. and the effectiveness and THERE ARE NO UNIVERSALLY AGREED definitions of efficiency with which those resources are used. These chal- capacity or capacity development. Still. when most develop- lenges for effectiveness and efficiency at the organizational. ment practitioners talk about capacity. it's usually capacity governmental and societal levels form the core of the issue for something. i.e .. the ability to set and achieve some objec- of capacity for development. tive in an efficient manner. Typically. the more specific the · objective. the easier it is to identify the abilities or capabili- ties required to achieve it. As the objec - given political context, is central and and even more difficult to suggest what tives get broader, and more continuous cannot be imported from abroad. The entire societies may need. as processes, the complex of factors that challenge of global poverty reduction These questions about capacity affect outcomes grows quickly and the illustrates the point. Many middle - requirements and measurement are mir- questions of what matters most, what income countries have development rored in the challenges for implementa- needs to be addressed first, etc., become goals that do not focus on poverty reduc - tion of the results framework highlighted quite intractable. Viewed in this way, it is tion, despite sizable pockets of poverty at the ~oo4 Marrakech Roundtable on easy to see the difficulty in arriving at a and sometimes many people vulnerable Managing for Development Results, simple operational definition of the to poverty. In many low- income coun- which also seeks to map the causal link capacity for development. tries, where the Poverty Reduction between outcomes, outputs and inputs. Traditional efforts at capacity devel- Strategy Initiative spearheaded by the For instance, many country strategies opment have focused primarily on cre - World Bank and the IMF has been and programs focus on the right issues ating or reorganizing government units for poverty reduction, but the links and building individual skills. In view of behveen specific interventions and many countries' still -weak public sector poverty outcomes are not well articulated capacity and growing recognition of the or measurable. Weak country capacity for critical importance of governance as monitoring results adds to the challenge well as deficiencies in private sector in selecting activities with the highest capacities, attention in recent years has poverty payoff. More and better analyti- turned to a broader and more holistic cal work and statistics are needed on the approach. This approach defines capac - links between policy interventions , ity development as a long term process capacity needs and development results. requiring attention jointly to both the In the near term, though, experimenta- supply and demand sides of the capacity tion and learning are simply vital to mov- challenge-the supply of well- structured ing forward. and efficient public and private organi- On the supply side , recent evalua- zations and institutions, and the civil tions of capacity development point to society demand for government some generic issues that need to be accountability and improved public sec- addressed more systematically. First, tor performance. and foremost, most efforts at capacity The supply- side of capacity captures development remain fragmented , mak- much of the traditional view of capacity ing it difficult to capture cross -sectoral as comprising material resources, tech - influences and to learn lessons. Many nical skills and organizational capability capacity development activities are not to make appropriate policy decisions founded on rigorous needs assessments and also implement them. The demand - and do not include appropriate sequenc- side, which is rooted in governance and ing of measures aimed at institutional or political economy considerations , organizational change and individual relates to the decision processes that skill building. Technical assistance and determine how countries set priorities training have often proved inadequate in about what they actually want to do and, building sustained public sector capaci- therefore, what they want capacity for. ty. What is needed is a more comprehen- International experience shows that the sive and sustained approach, giving most successful such processes have in explicit emphasis to building a perma- common the systematic use of informa - adopted, there is often a worrisome dis- nent capacity to manage sectors and tion to inform the decision - making connect between stated goals and actual deliver services. Finally, better tools are process and allow for timely policy budgetary expenditures needed to track, monitor and evaluate adjustments, as well as clear account- The multi - dimensional nature of the capacity development efforts. abilities for results actually achieved. above conceptualization of capacity The importance of the demand side raises serious methodological questions Looking a~ead, learning cannot be over- emphasized. Without a about capacity measurement. Success is from expenence consensus on and commitment to a usually judged by comparing achieve- clear set of national priorities- i.e. , m ents to intended goals. Defining F U RTH ER WORK is needed to improve country ownership - - efforts on the sup - capacity goals is more complex. It is eas - our understanding of the "how" of ply side are unlikely to yield the desired ier to do when defining particular skill capacity development. On the supply results. Leadership, the capacity to set gaps, but more difficult to determine side, a growing emphasis is being given and implement national priorities in a the needs at the organizational level, to strengthening organizations and 4 Development Outreach WORLD BANK I NSTITUTE institutions. There are many cases where skills are a binding incentives, functions and skills in government agencies, as well constraint. But, building skills in the wrong organizational or as other institutions and civil society. Donors need to coordi- institutional setting does not lead to strong results. So, choos- nate better among themselves and with recipient countries, and ing which organizations to engage with in training and other reduce the administrative and managerial burdens imposed by learning activities, the modalities of these activities and the their aid on national and local governments. Francis Fukuyama specific individuals to participate is very important. This is an highlights the same basic concerns within the context of state- area where donors need to strengthen their coordination to building. He argues that strengthening state institutions is the ensure that their activities (training and learning, analytical key to generating capacity and lifting underdeveloped countries and adviSOry services, policy dialogue and technical assistance) out of poverty. Donors need to give greater priority to the cre - work in concert and in a sustained manner to achieve lasting ation of local capacities, even at some expense of delivering improvements in organizational effectiveness. services to the population in the short term. On the demand side, the priorities are to strengthen the Callisto Madavo discusses key messages emerging from the institutions that produce good governance and civil societies' work of the World Bank's Task Force on Capacity Development understanding of key development issues . This means in Africa. He stresses that African governments and societies enhancing the flow of information through the development must take the lead in capacity development, which needs to be and dissemination of individual country and cross-country approached strategically as a core area of country strategy for comparative performance indicators, promoting multi -stake - growth and poverty reduction. External support should be ori- holder dialogue (including governments, parliamentarians, ented to engage with existing capacities, and provide inde - journalists, nongovernmental organizations and other pendent monitoring and benchmarking. Luisa Diogo rein- groups), expanding communities of awareness, and fostering a forces the importance of country ownership and participation stronger commitment to transparency in government and in her overview of the implementation of Mozambique's increased attention to results. development agenda, through strengthening institutional Development partners- both donors and recipient coun- capacity while giving voice and ownership to the people, and tries-need to learn from each other about what works and partnering with donors. Vira Nanivska writes about voice and under what circumstances. When countries know what out- participation in a very different country context, Ukraine, comes they are trying to achieve and what has been tried in where democratic institutions were built gradually from the other country contexts and with what results, they are better grassroots with the help of international donors. She stresses positioned to choose how they want to go about things. Two the role of the NGOs as organizations that can have a real recent events point the way: (a) a year-long examination of over impact on government policies. The challenge of stimulating one hundred case studies of success in scaling up poverty demand for capacity is also taken up by Kaufmann and reduction efforts culminating in the Shanghai Conference of Recanatini, who describe an array of governance indicators May ~oo4; and (b) the Capacity Day hosted by the World Bank in that provide a useful way of benchmarking country perform- June ~oo5, which initiated a global dialogue on why capacity ance to promote transparency and accountability. matters and the lessons of experience for capacity development. The next two articles offer some operational perspectives These two events brought together academics, politicians on supporting capacity development. Nils Boesen highlights and development practitioners from around the globe and the importance of viewing the organization as the appropriate shed light on key factors that have underpinned success in target for intervention, with a strong focus on outcomes or capacity development in at least some contexts, including: (a) results and due consideration to organizational and political country ownership and institutions that generate good gover- economy aspects of change. DraWing lessons from nance; (b) access to ideas, information and knowledge , and an Indonesia's successful Kecamatan Development Project, environment for learning and innovation; (c) the need to view Mary McNeil and Michael Woolcock focus on the processes of capacity as a long term process that must be sustained to learning and decision making. They emphasize the impor- match the transformations and transitions of development; tance of local context and adaptation, and argue that capacity (d) the importance of fOCUSing on concrete results; and (e) the development is a stop -go process that must be sustained over role of external benchmarking in informing public opinion a period of time and among a wide range of stakeholders. and stimulating change. The importance of these factors in Finally, Richard Manning discusses emerging areas of con- varying contexts is highlighted in the articles in this issue of sensus among donors about their role and behavior in ensur- Development OUTREACH. ingthat capacity development efforts are fully owned by recip- ient countries, and that donor support is aligned with coun- In this issue try-led strategies and actually serves to develop local capacity by building on existing capacities. '*' THE FIRST ARTICLE by Kemal Dervis reminds us that it is essential for poor countries to develop capacity over the coming Michele E. de Nevers is Director, Capacity Development Unit, decade in order to translate the envisaged large increase in aid The World Bank Institute into greater progress towards the MDGs and other internation- Frannie A. Leautier is Vice President, The World Bank Institute al development goals. Poor countries need to adopt long-term Samuel K. E. Otoo is Economic Adviser, Capacity Development Unit, strategies for capacity development by addreSSing structure, The World Bank Institute SE P TEM B ER 2005 Today's Critical Challenge Building Capacity to Achieve the Millennium Development Goals BY KEMAL DERVIS opment, issues such as the quality of institutions and their capacity to deliver-are going to define the ability of poor WITHIN THE development community and beyond, unprece- countries to achieve universal primary education, reduce dented global attention has been devoted in ~005 to the issues child and maternal mortality or combat HIV/AlDS, malaria of what is needed to fight poverty and advance sustainable and other diseases, amongst other development targets. The human development. Leading to the ~005 World Summit at target institutions are not only government ministries and the the UN, a number of agreements created a momentum civil service, but social institutions more generally. towards the achievement of the Millennium Development Moreover, it is not only domestic capacity that has been a Goals by ~0 1 5 . Such agreements included the historic com- constraint. The ability of countries to manage increased donor mitment by the European Union to meet the long- held target funds also requires better coordination from donors to reduce of 0.7 percent of gross national income on official develop- the administrative and managerial burdens on national and ment assistance (ODA) by ~015, and the proposal by the G8 to local government staff. The Paris Declaration on Aid cancel multilateral debts owed by some of the world's poorest Effectiveness, agreed upon in March this year, has provided a countries. The first steps towards these goals have actually practical blueprint for donors and developing countries to been taken, and ODA has started to rise- reaching US$78.6 monitor each other's progress on the way aid is delivered and billion in ~004. managed. There are healthy signs that more balanced and Today, we stand at a crucial juncture in global develop- mutually accountable development cooperation is emerging. ment efforts. Ensuring that we translate increased resources The Mozambican government recently called upon the donor in human development into tangible development outcomes community to be a part of a mutual assessment framework that at the country level has never been more critical, both for reviews behaviors, rules and procedures, and capacity con- developing countries and for the future of development straints on both sides. cooperation. Thus, while capacity development is an age-old concept, today it has both greater urgency and relevance because of a Defin!ng c~p acity development in a new and better conceptual framework and the anticipated changmg aId enV lfonment greater investment in development. In his report, In Larger Freedom, released in March ~005, the THIS SCALING UP IN development assistance is critical if the United Nations Secretary- General asked that each developing Millennium Development Goals are to be achieved by the ~015 country with extreme poverty should by ~006 adopt and begin deadline. At the same time urgent steps need to be taken to to implement a national development strategy bold enough to increase the capacity of countries to absorb increased meet the Millennium Development Goals targets for ~015 . He resources. As the development community prepares for what encouraged those countries to mobilize all their resources may become the largest ever increase in development assis - behind that strategy, as well as to take steps to improve gover- tance, the role of implementation capacity in consolidating nance, support the rule of law and tackle corruption. And to development gains and establishing the conditions for mak- support those strategies, he also asked every developed country ing further progress is extremely important. to increase the amount spent on development assistance and Within this context, it is clear that as financial resources debt relief, and to take action to reform world trade . Clearly, may hopefully become somewhat less of a constraint on devel- there are capacity implications for implementing an MDG- 6 Developmem Outreach WORLD BANK I N STITUTE based development strategy in relation to the ability of coun- Working strategically to build capacity tries to manage the scale -up needed to achieve the goals in the time left before ~o15, while at the same time expanding the GIVEN TH E HOPED FOR INCREASE in resources and renewed delivery of essential services. From public sector management attention on capacity, what are the priorities? and administration, to human resources and infrastructure, The first critical area is strengthening the capacity of the need to strengthen the ability of countries to absorb addi- national and local government, as well as non-state actors, in tional resources and at the same time build their own national policy analysis and planning to produce and implement and local capacity has never been so important to achieving MDG-based national and local development strategies. UNDP sustainable development outcomes. is building on our experience to formulate and implement But for too long, capacity development has been integrated development plans in a number of key ways: by approached in a piecemeal fashion, often driven by isolated building monitoring systems and improving statistical litera- seminars and individual projects. A strategic long-term plan cy in order to map the key dimensions of poverty; conducting for building capacity by addreSSing structure, training, incen- MDG- based needs and capacity assessments to identify the tives' and functions is now vital not only in government min- specific public resources and policy reforms required to istries' but also in other institutions, and in civil society, achieve ambitious national targets; and by integrating nation- which is increaSingly playing a critical role in the delivery of al poverty reduction strategies with nationally- owned MDG essential services such as healthcare and education. targets through public investment plans and pro-poor poli - cies as well as macroeconomic frameworks and sectoral devel- framework for action requires a discipline and rigour that has opment strategies. sometimes been absent in past efforts. The need to carefully A second priority area is investment in building countries' assess, document, and learn lessons is key if capacity develop - capacity to formulate policy. To make sound policy choices and ment is to help achieve the development results we all want to be able to implement them effectively at all levels is really at the see at the country level. The principles and theoretical under- heart of a country's capacity treasure chest. This area needs to pinnings of the concept of capacity development are sound, be expanded as needs evolve. Take the example of Sierra Leone. but the real test now lies in applying a model of capacity devel- Not being able to execute the public opment that delivers results. payroll effectively represented a sub- Greater resources without sustained stantial risk, which the government capacity expansion in institutions- recognized needed to be addressed as a public, private and non -governmen- vital priority in its recovery from con- tal- to absorb and manage them effi - flict . A capacity strengthening effort ciently and effectively will not produce focused on effective payroll manage - sustainable results. Instead, it is likely ment and a subsequent internal audit to elicit waste and inflate service costs, of the payroll, and it helped to ease a and to result in only a minimal potential crisis in the country's public improvement in development out- sector administration. comes. Unless we address this problem A third dimension in need of sup - now, there is a real risk that possible port is the development of human gains may be followed by disillusion- resources, because a shortage of trained ment and failure . workers and managers across the devel- As the UN's global organization for oping world continues to be a critical development with expertise in capacity constraint to development. The UNDP- development across all our practice sponsored Millennium Project report, areas, from support for democratic Investing in Development, highlighted the governance to crisis prevention recov- need to rapidly increase the level and ery, and as the home of the UN Resident scale of training, and called for the Coordinator system, and chair of UN deployment of village workers in health, Development Group, substantively and farming, and infrastructure to ensure operationally, UNDP has an indispen- basic expertise and services in rural sable role in supporting governments communities. The human resource in the challenge of building the ca paci - challenge is particularly acute in coun- ty they need to deliver the real tries confronted by HIV/AIDS, famine, improvements in human development or natural disasters . The Southern that increased aid flows can bring. Mrica Capacity Initiative is an innova- Thankfully, the Cold War is over and tive response to one of the most chal- development assistance can now really lenging development problems faced focus on human development, rather today, which seeks to address the debil- than being an instrument of military itating impact of HIV/AIDS on gover- alliances. Important lessons have also nance and public service delivery at been learned from past successes and both the national and regional levels. failures . Let us hope that donors will This UNDP-supported initiative is con- not again allow narrow, short-term ducting assessments of human political considerations to drive atten- resources and institutional capacities tion from the central goal of human and needs, helping to fill capacity gaps development, which is also the best through national and international vol - long-term guarantee of greater security unteers, carrying out cross - cutting for all. For the first time we mayactual - skills training, and building service ly truly be able "to make poverty histo - delivery capacity, particularly at the community level. ry." It is the most exciting challenge there is. At the start of my Other vital areas where resources need to be directed time at UNDP, I look forward to joining forces with all partners towards capacity development include building capacity for the worldwide so that we can meet this challenge successfully. ..., fight against corruption, through independent monitoring and review mechanisms for mutual accountability; and capacity Kemal Dervis is Administrator of the United Nations Development development to assist national procurement capacities that will Programme and is also the Chair of the United Nations Development deliver essential drugs and healthcare to the poor. Group, a committee consisting of the heads of all UN funds, Across all these areas, it's clear that a capacity development programs, and departments working on development issues. 8 Development Outreach WORLD BANK I N STITUTE STATE-BUILDING as the Core of Capacity Development BY FRANCIS FUKUYAMA THERE HAS BEEN GROWING CONSENSUS within the development policy community that institutions and state capacity are critical to economic growth, and can- not be taken for granted in many poor countries. The problem we face, however, is that while we understand the importance of state institutions, we do not have good strategies for creating them in societies with weak demand for them. Worse, the international communi- ty tends to help poor countries by providing services directly, bypassing and thereby weakening indigenous institutions. Solving this conundrum will be a major task for the future . The idea that state -building should become a prior- ity for the world community may come as a surprise, given that the dominant trend in world politics for the past generation has been the critique of "big govern- ment" and the attempt to move activities from the state sector to private markets or to civil society. There are two separate dimensions of "stateness," however, that need to be separated. The scope of state activities has to do with the number of functions or activities a state assumes, while the strength of states refers to their abil- ity to make and enforce rules. The old agenda of cutting back state scope remains valid for many countries with exceSSively large public sectors. What many people for- got during the 1990s, however, was that there are important residual state functions such as providing a rule of law and other basic public goods that can be done more or less well. While an optimal reform path would involve cutting both unnecessary and counterproduc- tive scope through privatization and deregulation, residual functions would have to be simultaneously SEPTEMBER 2005 9 strengthened. Unfortunately, during the AlDS epidemic in Africa has infected must be taken in complex doses over a 199os, many countries lost scope and millions of people and will take a stag- long period of time; failure to follow the strength simultaneously. gering toll of lives. AlDS can be treated regimen may actually make the epidem- as it has in the developed world, with ic worse by allowing the human immun- Weak states are the antiretroviral drugs. There has been a 0deficiency virus to mutate and develop source of problems strong push to provide public funding drug resistance. Effective treatment for AlDS medicine or to force pharma - requires a strong public health infra - WHILE THE AGENDA of reducing the ceutical companies to permit the mar- structure, public education and knowl - scope of nation-state still remains alive keting of cheaper forms of their prod- edge about the epidemiology of the dis - in many parts of the world, the impera - ucts in Africa and other parts of the ease in specific regions. Even if the tive for our new global economic envi - Third World. While part of the AlDS resources were there, the institutional ronment has become state - building, problem is a matter of resources, anoth- capacity to treat the disease is lacking in particularly in the developing world. In er important aspect is government many countries in Sub - Saharan Africa those countries, weak, incompetent, or capacity to administer health programs. (though some, like Uganda, have done a non - existent government have little Antiretroviral drugs are not only expen- much better job than others). Dealing capacity for enforcing laws or imple- sive, they also are complex to adminis - with this epidemic thus requires help - menting policies. For example, the ter. Unlike a one - shot vaccine, they ing afflicted countries develop the insti- tutional capacity to use what resources they may acquire . approaches to public sector reform require changes in the Lack of state capacity in poor countries has come to haunt normative structure of an agency or bureau, and thus have the developed world much more directly. The end of the Cold multiple possible solutions. Public administration thus often War left a band of failed and weak states stretching from the ends up being more of an art than a science. Balkans through the Caucasus, the Middles East, Central Asia, It is also important to keep in mind the contradiction and South Asia . State collapse or weakness had already creat - inherent in providing public services to developing countries, ed major humanitarian and human rights disasters during the while at the same time engaging in institutional capacity 1990S in Somalia, Haiti, Cambodia, Bosnia, Kosovo, and East building. External donors and their local contractors are often Timor. For a while , the United States better positioned to provide services in and other countries could pretend order to face the immediate needs of these problems were just local, but the population. But in the long run, September 11 proved that state weak- developing countries are better served ness constituted a huge strategic chal - by developing their own institutional lenge as well. Radical Islamist terror- capacity. The tendency of nation - ism combined with the availability of builders to take over and to provide weapons of mass destruction added a turnkey governments, as we have done major security dimension to the bur- under the Office of the High den of problems created by weak gov- Representative in Bosnia or under the ernance. The United States has taken Coalition Provisional Authority in on major new responsibilities for Iraq, creates problems for the future nation - building in Afghanistan and because it infantilizes local actors , Iraq in the wake of military actions impedes ownership, and ultimately there . Suddenly the ability to shore up retards long-term capacity develop - or create from whole cloth missing ment. There is no neat solution to this state capabilities and institutions has problem, but if we are serious about risen to the top of the global agenda building institutional capacity we will and seems likely to be a major condi- need to develop approaches that are tion for security in important parts of less intrusive even at the expense of the world. Thus state weakness is both short -term service provision. a national and an international issue of the first order. The political dimension How to intervene in FINALLY, WE HAVE TO CONSIDER the state-building political dimension. State weakness, in any part of the world, has international WHILE WE UNDERSTAND howinstitu - consequences because it invites outside tions work and why they are important intervention and thereby erodes the in the developed world, we have much principle of sovereignty. Questions of less knowledge of how they can be democratic legitimacy have come to transplanted to societies in which they dominate disputes between the United are missing or weak. This is true even States, Europe, and other countries in for public administration (i.e ., institu- the international system. Strengthening tional knowledge at a micro level), state institutions through various forms which many people regard as a techni- of state - building is a task that has cal discipline . Economists have in become vital to international security, recent years sought to model corrup- but is one that few developed countries tion and other types of bureaucratic have mastered. Learning to do state- dysfunction through so - called "prin- building better is thus central to the cipal- agent" models. The solutions to governance problems future of world order. suggested by this approach seek to better align agent interests '"'"' with those of the principals, often through redesigned moni - Francis Fukuyama is Bernard L. Schwartz Professor of International toring and accountability systems. Polit ical Economy at the Paul H. Nitze School of Advanced While this framework provides important inSights into the International Studies, Johns Hopkins University. origins of poor governance, many problems cannot be solved through better monitoring and accountability, because many Th is article includes excerpts from Francis Fukuyama's book, State-Building: Governance and World Order in the 21st Century, and is based on the lecture public sector outputs cannot be accurately monitored or have he gave on the same subject at the World Bank on December 14, 2004 . very high transaction volume. Oftentimes, workable SEPTEMBER 2005 II Five Key Messages Recommendations for Capacity Development in Africa BY CALLISTO MADAVO AS AFRICANS and their international partners gear up for a major push to fuel development and poverty reduction, Africa has a new opportunity to push the development agenda and to improve conditions for the continent's poor. In July ~005, the Group of Eight industrialized nations agreed to double aid to some $50 billion a year, recog- nizing the common interest in accompanying Africans on the road to sustainable development. But for increased aid flows to translate into better development outcomes, African governments and societies have to strengthen their capacity to implement development programs. The attention paid to Africa's lag in achiev- ing the MDGs and its faltering economic per- formance has correctly drawn attention to Africa's capacity gaps and the constraints that the continent faces in overcoming them. Using the new resources flowing towards Africa in the form of debt relief, aid, trade and investment requires that Africa and its partners address this capacity challenge, learning from the suc- cesses and mistakes of the past. Shared growth requires capacity not only in the public sphere, but also in the private sector and civil society. Poverty reduction requires the state to carry out basic public management functions to provide access to basic social serv- ices. In the private sector, entrepreneurs, farmers and shopkeepers need regulatory insti- tutions that ensure a competitive and cost effec- tive business environment, low barriers to entry, and minimum risks to investment. The starting-point today is much more pro- pitious than at the launch of the African Capacity Building Facility (ACBF) more than a 12 Development Outreach WORLD BANK I NSTITUTE decade ago. The PRSP era has paved the way for important Capacity development aims at an innovations in the way donors and the World Bank do busi- MESSAGE 2 effective state and an engaged society ness. The introduction of budget support (including PRSCs) and Sector Wide Approaches (SWAps) aligned with govern- ment systems have put countries in the driver's seat with Capacity development must be approached from what it stronger incentives to show results. Harmonization of donor intends to achieve. An effective state with an engaged society efforts around country-owned benchmarks for poverty reduc- are needed to reach the end goals of poverty reduction. tion although slow has likewise improved the efficiency of the growth. empowerment. peace and security. partnerships with developing countries. The development of A state is effective when it delivers quality public goods and various country-level. multi -sectoral programs related to services meeting the needs of the population. Effective states public sector reform and public financial management. com - require engaged societies that demand change and hold gov- munity-driven development. and the fight against HNIAlDS ernments accountable for such delivery. are also in place and show promise. An engaged society. an end in itself. is also a key element of the domestic accountability system. PartiCipatory institutions A few key messages that are active holding the state accountable include parlia - ments and their committees. advocacy. interest and consumer A TASK FORCE was set up to recommend changes in the way groups. profeSSional associations. local governments and the Bank affects African capacity. both directly through oper- communities. ations aimed at capacity development and indirectly through the way it conducts its overall business of development lend - MESSAGE 3 Africans must take.the lead in capacity ing and cooperation in Africa. Based on its assessment of the development and aid management evidence of capacity development and widespread consulta- tions with Africans and their partners. a few key messages are Capacity development should be approached strategically emerging which can inform and stimulate the efforts of all as a core area of country strategy for growth and poverty parties in capacity development on the continentAfrican reduction. As home - grown strategies are much more likely to countries. external partners. and the Bank. The Task Force address the right issues and be effectively implemented. regards these as a work in progress around which further dis- African country stakeholders. including their regional insti- cussion and reflection are on -going. tutions. have to be at the center of a strategic approach to capacity development. African governments should design strategies for capacity MESSAGE 1 Capacity is the missing link in Africa's achievement of the MDGs development as part of a participatory PRS process. including a robust monitoring and evaluation system as an integral part Capacity comprises the skills. incentives. resources. orga- of its medium term plan such as the PRS. nizational systems and structures-as well as the broader enabling environment-that allow individuals and organiza - ME SSAG E 4 Extern.al ~artners .must enga~e existing tions to plan. implement. and monitor their development. capacity In all Afncan countnes Equally important is the need to answer the question: capaci- ty for what? In this regard. capacity is best developed and used External partners must respect African leadership and most effectively and tangibly in pursuit of speCific objectives ownership of the design and implementation of national such as delivering services to the poor, improving investment capacity development strategies. They must also follow a cus- climate for private firms and entrepreneurs. empowering tomized approach to supporting a country's capacity develop - local communities to take part in public decision- making. ment strategy. and resolving conflict and promoting peace and security. The international partner community should support the Capacity remains a binding constraint to development and implementation of the capacity development strategies with poverty reduction despite concerted efforts by a number of timely. flexible and predictable technical and financial assis - African countries and substantial donor support. This under- tance. Technical cooperation (including technical assistance) scores the crucial importance of easing the capacity con- to African countries is on a strong rebound in ~004 . it reached straint. in tandem with larger aid flows to Africa; the two need US$S.8 billion. Unfortunately these technical assistance to go together. expenditures are not building capacity; there is therefore a Since the end of the 1980s. macro - economic. structural need for redirection of its use in two ways. One is to raise the and social policies have improved all over Africa and political share of technical assistance funding going to capacity build- and economic governance has improved since the early 199os. ing activities instead of expatriate salaries and support. The In short. with economic policy and good governance building other is to prOvide it in a way that pools the fragmented blocks moving into place to create opportunities. together financing arrangements into a basket to fund prioritized with the availability of external financing. capacity remains capacity development activities or filling country-identified the most binding constraint meeting the stipulated MDG tar- short-term needs for achieving results with the country gets in Africa. directing the investments. There is also a need to fund region- S E PTE M B E R 2 0 0 5 13 al and sub-regional capacity. In all African countries, external partners should take a longer-term, more patient and predictable approach to capacity development, extending over 15 - ~o years. MESSAGE 5 Achieving capaci~y outcomes requires Independent mOnitoring Mutual accountability between external partners and African countries has been gathering momentum especially in the context of the PRS process. Africa itself has shown the way though the African Peer Review Mechanism, which uses a regional framework to strengthen domestic dialogue and IIPARLIAMENTS AS PEACEBUILDERS: encourage change towards improved political and economic THE ROLE OF PARLIAMENTS IN governance . CONFLICT AFFECTED COUNTRIES" WBI Working Paper A shared vision THE EMERGING SHARED VISION of effective approaches to In the past few decades the international capacity development provides a conceptual and operational community has changed the way it deals with underpinning for a common platform. It is supported by the literature review and the experiences documented in the violent conflicts: the focus has shifted away country and thematic studies. And it is reinforced by a strong from resolution to prevention. endorsement from the consultation process so far. This platform provides the basis for a coordinated "big In this context, parliaments can provide a push"- a new compact-to be mobilized with our African part- ners, the donor community in general, and the World Bank natural platform to address contentious issues Group. None of the three partners can do it all alone. While in conflict-affected societies. However so far each of the partners may have a different role, sustainable there has been little research on this topic. In capacity development calls for a spirit of mutually reinforcing partnership with the Commonwealth Parlia- support and accountability. The renewed compact will require the commitment of mentary Association (CPA), and with the African leaders and their development · partners to address support of the Parliament of Sri Lanka, WBI capacity development more strategically, systematically and organized a Study Group in Colombo, Sri boldly. It will require a frank and comprehensive assessment Lanka (October 2004). dealing with the real constraints to building capacity. It will require using and retaining capacity effectively. It will require analytical and financial support for homegrown strategies for This Working Paper reports on the Study capacity development. And it will require the evolution of Group and highlights the connection modalities and practices for partners to support the develop- ment of country capacities. ~ between governance, poverty and conflict. It examines how parliament -by fulfilling its Callisto Madavo, Task Force on Capacity Development, the World oversight, representative, and legislative Bank, and former Vice President for the Africa Region. functions- can prevent, manage and resolve conflicts. In addition it emphasises the impor- tance of promoting socio-economic equality, regional parliamentary peace-building and liaising with civil society. For further information please contact Severin Strohal - Tel.: (+ 1) 202 458 9780. 14 Development Outreach WORLD BANK INSTJTUTE Post-Conflict Mozambique's Reconstruction A Traniferable Strategy BY LUISA DIOGO When we prepared the first recon- President Guebuza's vision is currently struction program after the war. in 1993, to reduce poverty, which is the matrix for IN POST - CONFLICT MOZAMBIQUE , we had about 4.000 projects, which had a healthy and prosperous country. When over a period of roughly twelve years. we been agreed upon with the wide partici - we first tackled this task, we were in the have witnessed an amazing economic pation of all the stakeholders. For the dark. We lacked indicators, figures , and turnaround. There has been a reversal first time, groups such as NGOs, eco- causes. Therefore, we had to start by from a GDP growth of minus 8 percent nomic associations, and local communi - doing research. The results from a to one of plus 8.~ percent. This was due ties had the opportunity to make their household survey, in 1997, indicated mainly to a successful capacity develop - voices heard. Faced with the challenge to that we had 70 percent absolute poverty ment program that relied on the partic - prioritize this large amount of projects, in Mozambique. We analyzed the causes, ipation of all sectors-government. pri- the government focused on rebuilding and subsequently decided on how best to vate sector. civil society. and interna- the health and education infrastructure , allocate our scarce resources in order to tional donors. and achieved its goals in three to four alleviate symptoms and also get to the years. roots of the problem. We ended up allo - cating 65 to 70 percent of the budget to T he development agenda education, health, agriculture and rural development, infrastructures, gover- A N IMPORTA NT ELEM ENT that con- nance, including judiciary and decen- tributed to our success was a strategy tralization processes , and macroeco - based on a specific agenda. This devel- nomic stability. opment agenda was built on consensus It is important to point out that today. through a mechanism of discussion with although we may not have consensus on civil society, so that every bill approved every specific issue, we do have consen- in the parliament had already been vet - sus on the essence and general direction ted by the society at large . There were the government has imparted to the two key factors that sustained the country-on allocation of resources, on implementation of the agenda: a leader- state control of resources, and on the way ship with clear, long- term vision and we receive aid. international donors willing to accom- modate that vision. Measures of success Former President Chissano's vision was to create an environment of peace I N ORDER TO BE ABLE to sustain the and stability, which would facilitate eco - level of capacity development experi - nomic growth. He succeeded in doing so. enced in our country in the last decade, S E PT E M B E R 2 0 0 5 15 we have to be aware of the areas in which we achieved our ment. We are devoting more and more efforts to community major successes. In the area of poverty reduction, indicators development because this would be the basis for the country's show that the living standards have improved thanks to eco - capacity development. When our communities are prepared nomic growth. This is our first measure of success. to face the challenges of natural disasters and diseases such as The second measure of success is the issue of institutional malaria, tuberculosis, and HIV/AlDS, Mozambique will have capacity. Our institutions are now able to make policies, create achieved true capacity development. programs, and control projects. They are also handling gender issues at all levels. These are major improvements that Transfe rring the achieveme nts strengthen institutional capacity. The third measure of success is the growth of the private sector, with a total investment, both IN VIEW OF THE SUCCESS Mozambique had in implementing internal and foreign, of US$7 billion since 1997. Only three its development agenda, we are often asked whether our coun- countries in Africa have such a level of investment: Sudan, try could be a model to be replicated in other post-conflict where there is oil; Angola, where there are oil and diamonds; countries. My answer to this question is that Mozambique's and Mozambique, where there are neither oil nor diamonds. post-conflict experience may be useful to other countries, Still another measure of success is the involvement of civil keeping in mind a few essential points. society. Our civil society is actively engaged in discussions of Firstly, the given country should stabilize its post-conflict policy making with the government. These discussions are environment by keeping peace and security, consolidating often time consuming, but they produce better policies based democratic institutions, and encouraging broad participation on consensus and, therefore, make implementation easier. in the development process. The latter is espeCially crucial, Finally, a key measure of success is community develop - because one of the causes of conflict in Africa is poverty and r6 Development Outreach WORLD BANK I NS TI TUTE the sense of exclusion. Equally important is to strengthen demo - :: 0 servifo pre-paqo da mCel :: cratic institutions. Mozamb ique's spending for the parliament went up from US$zoo,ooo to US$3 million per year in the post - conflict period, which is indicative of the country's commitment to democracy. Secondly, macroeconomic stabili - ty must be pursued in order to control inflation. Price fluctuation due to inflation creates problems for the consumers and leads to strikes and mass protests. Conversely, in a situa- tion of macroeconomic stability it is easier for the government to imple- ment policies that benefit society- agricultural policy, resettlement poli- cy' demining policy, HIV/ AIDS fight- ing policy, and so on. Macroeconomic stability should not be postponed as a policy. Finally, much depends on leader- ship. Leadership at all levels must be guided by clear and far - of resources to the budget. While we had a very positive reaching vision, which extends to the future of the country. It response to this approach from the donors that are currently should set directions that put the country on a steady course, working with us, other potential donors are still reluctant to join but should not force policies on the people without consensus. because of negative experiences they had in other countries. It should open up the development process to a great variety of I think that oftentimes this is due to the fact that some voices from all the stakeholders. Stakeholders such as NGOs leaders are too timid to discuss their country's needs with and foundations, on their part, should live up to their respon- donors such as the World Bank and the IMF. Rather, they sibilities and make a valid contribution to capacity develop- would paSSively accept the donors' proposed projects without ment. And, last but not least, the government should protect claiming ownership, and as a consequence implementation the freedom of the press, which is one of the foundations of a may not have a positive outcome. What the donors should do , democratic society. in my opinion, is to challenge those leaders, to stimulate them, to encourage them to take initiatives, to provide exam- D onors' cooperation pIes of programs that worked in other countries in similar sit- uations, and to create a space for ownership. The donor's rep- INTERNATIONAL DONORS are important partners in our resentatives may raise questions such as: "How do you want to development agenda. We need to keep them involved in the approach gender issues?" Or: "What do you want to do to process. But we also have to take ownership of our programs. improve girls' education?, " and the like . The essential factor After all, ownership is a key measure of capacity development in dealing with the donors is dialogue. Initiative may start in the country. We are making progress in this direction. from one side or the other, but the issues should be discussed In 1996, we started implementing the Sector Wide in a clear and transparent manner, and agreement should be Approach (SWAp), which allows the government, once a pro - reached, which assuages the donors' concerns and guarantees gram has been approved in consultation with the donors, to ownership to the receiving country. take ownership and implement it, without discussing dis - I am convinced that the leaders' response would be enthu - bursement of every single dollar. It practically amounts to siastic' because if a government has been democratically budget support. During the implementation the government elected by the will of the people, it is implicit that its role is to reports on indicators of process. Only at the end of the pro- do the people's work and fulfill the mandate for a better gram, would the government account for output and costs . future. And a better future is achievable mainly through Under SWAp, the donors could present their projects, but they capacity development. must fit in the government's strategy, and should be approved only after discussion and agreement. Luisa Diogo is Prime Minister of Mozambique There are at present 17 donors that participate in the SWAp approach, and they include the World Bank and the European This article is based on her presentation at the conference "Capacity Matters: Operational Implications," Washington, DC, June 8, 2005. Union. The great advantages of this arrangement are owner- ship, predictability, long-term commitment, and additionality S E PTE M 8 E R 2 0 0 5 17 Civil Society in Ukraine and the Orange Revolution BY VIRA NANIVSKA FOR A COUNTRY TO PURSUE capacity development, democratic institutions must be firmly in place. The soviet system sys- tematically destroyed any representation of interests other than those of the Communist Party leadership. This meant that countries like Ukraine lacked organ- ized interest groups and the institutions of legitimate political competition after the collapse of the communist regime. Although the basic institutions ofrepresen- tative democracy-president, legislature, Constitution, elections at all levels-were quickly established in the early 199os, this did not make Ukrainian society fully demo - cratic because the institutions of everyday democracy- an independent judiciary, the participation of different interest groups in the policy-making process, and transparent governance-were still missing. The role of civil society YET THE EVENTS OF THE FALL OF 2004 made it clear that civil society played an important role . Thanks to its actions power changed hands in an organized manner, without victims and within the law. Civil society's capacity evolved gradually. In the post-SOviet period, there were unmistak- able signs of an emerging civil society: legitimate political competition, non- gov- ernment systems for monitoring political competition, including during elections, and interest groups among NGOs that pro- moted their interests publicly. Other encouraging signs included government's concessions to interest groups, changing the policy-making process and gradually introducing public policy approaches, an orientation towards European standards of 18 Development Outreach WOR L D BA NK I NST I TUTE governance that was legitimized notwithstanding an inconsis - would be approved by Presidential Decree. This would be tent Eurointegration policy. a market for NGO activity. and an the best demonstration of political will regarding a new independent information space. albeit limited largely to elec - paradigm for the new Administration's relationship to civil tronic media. society. In addition. the Justice Ministry set up a working group The role of technical assistance with representation from community organizations that will prepare a package of legislative initiatives to establish TECHNICAL ASSISTANCE played a major role in forming civil conditions for the free development of civil society and will society in Ukraine. providing models of democratic behavior present these to the Cabinet of Ministers . to local NGOs and the government. Newly learned monitoring · NGOs more actively defend their rights. When the revised skills were critical in the election period. ~005 Budget came out with amendments that considerably However. donor activity focused on giving good advice as to worsened the financial standing of NGOs. the coalition of public governance. although neither the government nor local NGOs was able to work together effectively and put pres - NGOs had the necessary capacity. Donors also tended to sure on the Government. As a result of this coordinated emphasize the development of a protest movement. while effort. the problematic provisions were revisited. ignoring the need to work with the government as well. · Community councils. Together with a slew of NGOs. the new The idea that real change could only come from a strong government has launched an initiative to set up communi- government working with strong NGOs has not taken root in ty councils attached to State Administrations at all levels the donor's thinking yet. In Ukraine. specialists and govern- and another group of expert councils attached to VR com- ment officials learned the skills of policy analysis and policy mittees and ministries. These councils are to oversee gov- consultations through advice and training from international ernment activities and to assist in policy- making. experts. The process of training civil servants in the basics of · Better independent policy analysis plays a larger role. The first public policy was also initiated. The government started to 100 Days of the new Administration were carefully analyzed produce analytical documents and change key legislation- by independent NGOs and during public debates. A huge including that on public consultations. number of critical evaluations were prepared. along with But there was no fundamental change in transforming the recommendations as to how to change the Government's bureaucracy from a centralized government into a democrat - behavior and policies. ic one. Meanwhile. local NGOs had limited capacities to influence the decision- making process. Only by the begin- Community- building and organizing ning of the ~ooos . has the situation begun to change. The Community-building became more active and organized. critical mass of NGOs and party organizations that could For instance. Dnipropetrovsk oblast Signed a memorandum influence public opinion and is capable of organized and with civic organizations. the oblast council. the oblast state consensual action reached full capacity. Today. some 40.000 administration. mayors. and local business associations con- NGOs in Ukraine involve I~% of the population-and these taining 10 specific commitments to cooperate and develop organizations have been a key active force in the Orange local communities together. Parties have begun to understand Revolution. the importance of local community support and its impact on their election campaigns. They. too. are now looking to partic - The aftermath of the Revolution ipate in community-building and development. A WIDE RANGE OF SOCIAL GROUPS supported the process of Better oversight of the March ~oo6 elections changing those in power. putting to rest the totalitarian myth Since Ukraine is switching from presidential to parlia - about the sacredness of power. People understood that power mentary-presidential government. the ~o06 Verkhovna Rada depended on their choice. that it could change hands . be crit- elections are likely to determine the further fate of democracy icized. and be answerable. The media acquired new freedom. in Ukraine. NGOs are already forming coalitions to lobby Many civil organizations were forced to disclose their ideolog- changes to election legislation and work out how to avoid vote - ical basis. which led to a new relationship among NGOs. But rigging this time around. Some are organizing public dialog to the key process was activating and structuring the institutions review the content of election platforms and to analyze how of civil society in the new political reality. This could be seen parties did or did not fulfill promises made in earlier elec - in a number of ways: tions. Others are putting together training programs for those involved in the electoral process. President Yushchenko pro - New relations with the state posed that community organizations be allowed to monitor · Changes in the rules of play. A large group of prominent the elections. NGOs came up with an initiative to write new rules for how the government and society should interact. Among other Active resistance to the old ways of governing documents. they are drafting a Concept for the develop - Many community organizations such as Pora. which was a ment of civil society. The Presidential Secretariat has given key force during the Revolution. are actively campaigning to its blessing in the form of an agreement that the Concept reveal any backsliding towards the old regime in the new S E PTE M B E R 2 0 0 5 19 Administration. Their websites report on corrupt activities among "newly minted" officials. They have been holding public hearings on issues of social transformation and they are studying the transparency and effectiveness of current policy. NGOs in the Eurointegration process A clear orientation on the real process of integrating into interna- tional and European organizations is making democratic changes more consistent and structured as to direction and objectives. This year, the number of NGO - organized pub - lic hearings and projects related to Eurointegration organized has picked up noticeably, along with increasing competition over the issue of where Ukrainian society should be going. are not confident that they can defend More development of More competition and open positions their rights. Should Ukrainian voters be civil society among political forces disappointed in the progress of reforms, A constructive opposition is begin- the legislative elections in zoo6 could THE STRATE GIC APPROACH for donor ning to develop, among both parties of result in a return to the old system of assistance needs changing. The tradi- the old regime and new forces. The power and the old style of governing. tion of funding one - off events of hun - process is still fairly chaotic because the There must be a shift in focus to some dreds of tiny NGOs must be replaced by opposition lacks the capacity to organize form of coordinated policy regarding the implementation of large - scale, itself and to take meaningful action. technical assistance to Ukraine that long-term programs through resource NGOs have been actively engaged in would be clearly oriented toward the centers and NGO coalitions. debating party activity and the contents kinds of changes that the European The involvement of many and ever- of party platforms. Union undertook with countries that new groups in transferring models of joined in May zoo4. democratic behavior was initially effec - Social policy and a stronger role for tive to familiarize Ukrainian society NGOs Cha~gesin the policy- with democracy, but it is the wrong Young people's and student organiza - makmg process Itself approach for democratic reforms . These tions have become especially active in can only be carried out by an organized working to change attitudes towards the NEW POLICY CONTENT ALONE cannot civil society backed by enough money, problems of the young and their rights: have the proper impact without a new resource centers, high-quality pro - the campaign against HNIAlDS has way of governing. The old system of grams and NGOs that represent the grown stronger and more coordinated, as hand - managing needs to be replaced by interests of many different social has the protection of minority rights and public policy-making and systems put groups. the fight against child abandonment. in place to engage in publiC consulta- tions and develop and negotiate alterna - Vira Nanivska is Director, International What's next? tive policies. Centre for Policy Studies Instituting administrative reform, (ICPS),Kiev,Ukraine. UKRAIN E STI LL has no targeted policies setting up an independent judiciary, for institutional change in the system of modernizing infrastructure , and, of public governance, yet both time and course, engaging the civil institutions in resources to institute such changes are this process must become TA priorities. shrinking. Judicial reform has not The World Bank can clearly playa lead - become a priority and the influence of ership and coordinating role in political those in power on court decisions TA to strengthen the capacity and influ - remains very noticeable. Most voters ence of civil society in Ukraine. 20 Development Outreach WO RLD BAN K I NST I TU T E Where Next? Building Local Capacity in Governance BY DANIEL KAUFMANN AND that relied heavily on importing capacity hardware and orga - FRANCESCA RECANATINI nizational software, with little focus on the governance com- ponent of capacity building. Implicitly, this suggests that if CAPACITY BUILDING is often mentioned as a key constraint sufficient resources are poured to build capacity and enhance to development. However, the link between governance and 'absorption' of aid, this could ameliorate any concern about effective capacity building (and aid effectiveness) is much governance. This approach also fails to recognize that local more complex than what we have acknowledged in the past. demand for investing in capacity development can ensure that Traditional 'capacity building' investment has shown to have the capacity will be used effectively. only a limited impact, especially in environments where gov- The limited successes have pushed the Bank to develop an ernance is weak. As emphasized by Pritchett (~OOl), to build integrated approach to 'build local capacity in governance', capacity where governance is weak, for example, may lead to which emphasizes rigorous diagnostics and analysis, policy "privately remunerative but SOCially wasteful activities." adviSOry services and collective action. This approach links Given the extent to which some key governance failings action -learning methods to empirical diagnostiC surveys and remain, the importance of good governance for effective policy applications through collective action at the local level. capacity becomes even more predominant. Key components in this "integrated approach" are : The limited success of old style donor-funded technical i) An analytical component that comprises three level of assistance and 'capacity' efforts is due to the approach used data collection and analYSis: SEPTEMBER 2005 21 a. "macro-level." for a vulnerability assessment based on ii) Learning activities and action planning programs using Worldwide Governance Indicators Database and participatory approach and public discussion of action plans Analysis. covering about ~oo countries between 1996 at national workshops. and ~004; iii) Specialized learning programs and support for imple- b. "meso-level." for a quantitative evaluation of the busi - mentation of action plans with Bank colleagues and donor ness climate in more than 80 countries. using various representatives. micro and macro dimensions of governance based on a These 'first-generation' efforts have led to the compilation survey of more than 10.000 firms: of the governance indicators and in-country databases. and c. "micro-level." for action planning and specific capaci- the design of innovative learning activities. Consider. for ty building. based on in-depth diagnostic surveys to example. the ability to monitor on regular basis governance representative samples of public officials. business peo- and its impact on poverty alleviation efforts -key for develop- ple. and users of public services. ing countries. This requires a multi-disciplinary national capacity. both human and institutional, which is weak in many developing countries. FOCUSing on national statistical systems, the Bank has developed learning programs aimed at strengthen- ing the analytical capacity of developing countries. The pro - grams, for policymakers and staff from the National Statistical Agencies, aim to build a sustainable, local monitoring capacity using an action -oriented approach (see References). These efforts have also provided valuable lessons for the next stage. Governance and corruption can now be measured and analyzed, at both an aggregate comparative level as well as at an in-depth country level. Aggregate indicators allow to evaluate the quality of a country's governance along six dimen- sions: (1) voice and external accountability; (~) political stabil- ity and lack of violence, crime, and terrorism; (3) government 22 Development Ourreach W O RL D BAN K I NS TI TUTE effectiveness; (4) lack of regulatory burdens; (5) rule of law; possible both at the country level and at the project level. On and (6) control of corruption. These aggregated indicators can the other hand, new evidence suggests that for each success empower reformists in governments and civil society. case there has been inaction or deterioration in others, high- Linking these dimensions to development outcomes we lighting the great variation in performance across countries observe that more focus is needed in improving citizen's par- and institutions in curbing corruption. ticipation and empowering them with effective 'voice', and in The Bank has concentrated its recent efforts on capitalizing promoting transparency-related reforms in public institutions. from these lessons. At the macro level, WBI has released the Moreover, mechanisms for collective action need to be deep - new governance indicators for ~oo4. The more comprehensive ened, engaging the private sector, parliaments, civil society as database of aggregated indicators (available from 1996 to ~oo4) well as the judiciary-which often needs to be reformed. More has improved practitioners' capacity to analyze changes in gov- effective cross-border collaboration is also needed, including ernance across countries and has provided further evidence of addressing the challenge of bribery by multinationals. the link between governance and development (see website: Policymakers are at a crossroad nowadays. On the one www.worldbank.org/wbilgovernance/ govdata). hand, new initiatives signal an increased commitment to bet- The Bank has also been focusing on empirical research on ter governance (such as UN convention, recent OEeD and transparency (described in the Box above) and human rights, OAS conventions). Innovations in this field, applied in a two emerging key areas of governance. The data suggest that number of programs on the ground, show that progress is transparency helps improve governance and reduce corrup - S E PTE M B E R 2 0 0 \ 23 tion-essential ingredients for better development and faster availability of in-depth country data has deepened our under- economic growth. But there is a need for the development aid standing of governance mechanisms at the local level. It has also community to pay more attention to the issue. allowed begin thinking about cross-sectoral issues, such as the An additional lesson is that even when governments use a impact of poor governance on specific sectors. Figure 4 provides, comprehensive approach to improve governance, reforms for example, evidence of the regressive impact of corruption on cannot be sustained if the effort is just based on government citizens seeking public health services. institutions. It is crucial to involve key segments of civil soci - The challenge of capacity building and governance con- ety, the media, parliament, and the private sector through fronting the world today strongly argues against "business- as- participation and accountability mechanisms. The gover- usual." A bolder approach is needed, and collective responsi- nance indicators and the data on human rights suggest that bility at the global level is called for. The rich world must not countries that restrict freedom of the press, citizen's rights, only deliver on its aid and trade liberalization promises, it voice and participation, struggle to curb corruption. must also lead by example. Moreover, the IFIs and donors need Corruption and poor governance are not just a problem of to grapple with questions of selectivity and effectiveness in aid the traditional public sector. The political structures and their programs, anchoring aid within a governance prism and help links with the private elite are an area of focus for the next in countries build capacity to effectively absorb aid. Improving stage of governance reforms. It is clear that the private sector transparency is one of the keys. "" has a responsibility as well, since influential firms can affect policies and institutions in a country. Ensuring openness and Daniel Kaufmann is Director of Global Programs, competition to avoid capture of state institutions by vested The World Bank Institute interests is important. Such undue influence by private actors Francesca Recanatini is Senior Economist with Global Programs, affects political structures, resulting in the institutionaliza - The World Bank Institute tion of corruption. To respond to these challenges the Bank has continued working at the meso -level, with multi - country References: enterprise surveys. These surveys allow to disentangle specif- Pritchett, Lant, 2001. "Where has all education gone? ", World Bank ic vulnerabilities of a country by analyzing institutional quali- Economic Review, Vol. 15, No.3, Wash ington, DC. ty' performance, and constraints in the public and private sectors from the firm's perspective. They also permit a cross - country assessment of many traditional and non-traditional The first offering of the programs for policy makers and staff from the challenges in governance. National Statistical Agenc ies took place on November 17th and 18th, 2004 In-depth diagnostic tools have been used to generate specif- in San Jose, Costa Rica with partici pants from Bol ivia, Costa Rica, Ecuador, ic input for country- specific action programs. The Bank has sup- Guatemala, Nicaragua, and Paraguay. ported the design and implementation of such tools in many For downloading the course agenda, and materials please visit: http://www.worldbank .orglwbi/governance/costarica/index.html countries, in partnership with bilateral agencies and local NGOs. During the past year, Zambia, Guinea, Guatemala, Mozambique, and Paraguay have completed such diagnostic efforts. The wealth of information collected allows policymakers to prioritize gover- nance challenges and design appropriate policy response. The 24 D evelopment Outreach WO R LD BANK I NST I TUTE Looking Forward A Results-Oriented Model BY NILS BOESEN There are, however, promising ways forward for support to CD in organizations. The approach to CD outlined below has HELPING TO MAKE PUBLIC SECTOR ORGANIZATIONS work four key pillars: better is one of the most persistent and difficult challenges in · adopting an open systems view on organizations; development cooperation. Support from development part- · applying a results-orientation; ners has often focused on inputs to support capacity develop- · giving full consideration to the context; ment (CD): technical assistance, training, equipment, and · exploiting both the functional-rational and the political ad - hoc benefits to key staff. The record of delivering these economy aspects of organizations and change. inputs is at best mixed. The approach builds on findings from mainstream organi- 5 E PTE M B E R 20 0 5 25 zational and political science, and was initially ORGANIZATIONS AS OPEN SYSTEMS: developed for Danida. LOOKING AT CAPACITY IN THE CONTEXT The open-systems approach to organizations is valuable for analyzing capacity. Any organization CONTEXT OF APPRECIATION: structural and institutional factors, and alents (or unit within an organization, or network of beyond short-term influence organizations) is viewed as a system with interde - pendent elements embedded in a context. The context provides incentives to the organization(s). Some incentives foster productivity and growth, others foster passivity, decline or even closure. Beat around the bush CONTEXT OF INFLUENCE: External stakeholders within some IN PRINCIPLE. the open systems model indicates influence of the organization(s) the key factors inside and outside the permeable boundaries of organisations which must be ana - lyzed to assess CD prospects. All factors have to be considered-but don't start by looking directly at the capacity of the organization(s). Forget-initially- the orga - staff being coached, CD support logical frameworks should nizational chart, the number of staff, cars , computers , and the specify the measurable effect of these efforts on organization- development plans. al performance. Instead , start by considering the organization(s) as a "black box": investigate what it actually produced and pro- Watch the context duces (products andl or services), and the context in which this happens. Only then, at last, open the front door, go into SEEING AN APPARENTLY DYSF UNCTIONAL public organiza - the box and look at the production process and the inputs. tion where productivity and morale are low can lead observers This may sound counterintuitive, and since partners from to point an accusing finger to poor salaries, poor procedures, the organizations seeking CD should be the prime actors, lack of plans , and poor leadership. Salary enhancement development partners and consultants will quickly find them- schemes for selected staff, business process reengineering, selves inside the walls of an organization, looking at internal comprehensive planning and management training-or needs which rapidly translate into support for equipment, change of leaders-could be the prescribed medicine. salary supplements, training, and technical assistance. This In stable and conducive environments this may work. But internal focus is also relevant, but all too often it leads to neg- what is seen as dysfunctional from the point of view of what is ligence of the context, and of the actual performance of the desired may be both functional and logical in a context where organization as measured by its products and services. incentives to performance are weak or counteracted by stronger Therefore, start with the latter. incentives to non-performance. This is why it is so crucial to analyze the context in which organizations are embedded. Focus on outputs Structural and institutional context factors outside the boundaries of the organization will influence it, as will the OUTPUTS - PROD UC TS AND SERVI CES - are the immediate actions of other organizations and individuals. Some factors effect of organizational performance. The accounts depart- and actors in the context may be influenced , while others can ment, for example, produces monthly account statements. only be appreciated in the short term (e.g., a fall in world mar- Outputs contribute to outcomes and ultimate impact, which is ket prices, social or gender inequality structures, decisions the focus of development assistance as such. For capacity taken in a donor country to reduce development assistance). issues, it is important to come "closer to home", where the Structural and institutional factors may seem to be attribution chain from capacity to outputs is more direct. abstract, and it may sometimes appear of little practical value It is particularly important to assess the existing outputs, to analyze these factors . But failing to do so is often the first and recent trends in quality and quantity. Outputs are good reason for CD support to fail. If power structures in and proxies for capacity. The output level will reflect the initial around an organization are built on and sustained by nurtur- capacity, which most likely increases incrementally. This is ing loyalty relations, then an attempt to quickly introduce full important for setting realistic targets for CD. transparency in the organization, strict adherence to rules, Outputs are tangible results of performance. It thus fosters, and recruitment based on merit, is likely to fail-Simply from the very outset, a results - orientation, which can help to because it would destroy the existing power base without avoid that CD support ends up focUSing on inputs. CD support replacing it by a stronger one. should not be defined as a TA-team, or as training- but as the Individuals and organizations pursue particular interests specific changes in outputs which the CD support will enable. as they best can in the context of structural and institutional Instead of specifying number of trainees being trained, or factors. The political elite, civil servants, civil society organi- 26 Development OUlreach WORLD BANK INSTITUTE zations, the military, the judiciary-and difficult and sensitive . It demands trust, Aligning CD support closely and development partners -all pursue time and high professional and ethical flexibly to the context and the political agendas, and organizational change is standards. Outsiders also have a differ- economy dimensions is analytically influenced by and influences these ent-and mostly more limited-role than demanding, and requires presence, agendas . insiders. But trying to support CD with- mutual trust, and a long- term horizon. Characteristically, there are therefore out alignment to the significant political In such a setting of constant scouting, always multiple actors, which adapt their economy factors is likely to fail. adaptation to the situation and flexible decision making to that of others, in provision of inputs, the results focus is complex and dynamic patterns. This F our dimensions of of crucial important to ensure overall trivial observation has significant impli- capacity and change strategic direction, and to enable an cations for approaches to CD and CD informed dialogue about progress. support. In stable, predictable environ- BRI NGIN G the key propositions advanced A focus on the context and on political ments, it is possible to plan as engineers here together, successful CD and CD economy factors may in some cases imply do, but imagine trying to win any com- support should consider four analytical that development partners can do less petitive sport-e.g. soccer-by having a and strategic aspects (shown in Table 1, that they would have liked to. The ulti- blueprint for the entire game, without below). mate effectiveness of well conceived the ability to change strategy as the game Changes in the external factors may external CD support does not depend unfolds. CD and CD support take place in well be the most powerful driver of primarily on the providers, but on how contexts where approaches from com- organizational change. The four dimen- well the support is adapted to the context petitive endeavors are at least as relevant sions also demonstrate why CD support and the domestic actors. Ensuring this as blueprint-oriented approaches. to the internal, functional-rational adaptation is the key challenge, and by dimension will only have a wider impact doing so, development partners can do F unctional-rational and if the context and the "organizational better for capacity development, also political economy as pects politics" are conducive to change. when it sometimes implies doing less. "'" of change This also explains why development partners can only expect their support to Nils Boesen, Process & Change Consultancy, UNFORTUNATELY. organizations do not be effective if there is country leader- Denmark. only strive to meet fairly clear and spe- ship of and commitment to change: cific official goals; and staff and external Only in that case-where CD is a part- References stakeholders do not always agree on and nership effort-can required actions on The approach described in the article above was pursue these goals. All organizations the political economy aspects of change developed by Nils Boesen and Ole Therkildsen in have informal and even hidden norms be taken effectively. Development part- a number of studies available at: http://www.um.dklen/menu/DevelopmentPolicy/ and practices, and most-especially pub- ners can do little alone-organizational EvaluationslOtherReportslCapacityDevelopment.htm lic sector organizations-strive to balance change is primarily a domestic affair. different goals and values, some of which are public, while others are downplayed or disguised. Only fOCUSing on the functional- rational aspects of an organization assumes-naively-that everybody only wants the best for the organization, and that technical optimization of process- es, clarity of goals and establishment of good human relations, will ensure opti - mal performance. On the other hand, only focusing on organizations as are - nas for power conflicts and competition between subgroups and pursuit of nar- row self-interest would end up in cyni- cism. Assuming that altruism and ego - ism mix in changing configurations opens the space for analysis of both functional- rational aspects and politi- cal economy aspects of organizational performance and growth. Analyzing political economy aspects in organizations and in their context is S E PT E M B E R 2 0 0 j 27 ANew Framework for Social Development The Case of Kecamatan BY MARY MCNEIL AND MICHAEL WOOLCOCK THE KECAMATAN Development Project (KDP) in Indonesia is one of the world's largest social development projects, reaching more than 28,000 villages across the country. KDP and its urban counterpart, UPP, now form a main pil- lar ofthe government's national poverty reduction strategy, and both projects are expected to expand to eventually cover all rural and urban villages in Indonesia. Interestingly, KDP's growth took place amid institutional collapse, major economic crisis, and one of the largest decentralization programs in the world. What have been the keys to KDP's success, and what do they have to tell us about the role of capacity building in social development? KDP's basic approach has been to mobilize and develop the capacities of rural communities themselves to take a more active role in building small- scale infrastructure and in improving the quality of a range of social services. Yet KDP's success, or its rapid "scaling up," rests on more than simply giving resources and responsibility to commu- nities. Early on, the program showed that it could adapt to changing condi- tions' including recognizing that techni- cally difficult activities, or those that require large programmatic solutions, were less likely to work in delivering 28 Development Outreach WORLD BANK I NS TI TUTE services. Second, although the program introduced a range of pIe, is not simply a matter of training smarter technocrats or bottom up reforms to Indonesia's planning system, it also took scaling up a standardized "best practice." Such technical skills care to build on pre - existing planning structures, or the local are unable to address the different degrees of decision -mak- contextual setting, to ensure sustainability when international ing that come into play at community and local levels. This is assistance was withdrawn. Third, the program's internal struc - where a project or program meets the community or clients- ture depended and was built upon more than ten years of World the starting point for how service delivery takes place. Bank and government - supported community development One way of addressing this is to look at two forms of deci - efforts (Guggenheim, forthcoming). Communities' capacity sion making in the public policy process. The first has to do was not built overnight, but followed a process of learning from with the degree of discretion that decision makers are willing successes and failures over a long time frame-a time frame and able to exercise when confronted with a given problem. often difficult to evaluate and usually underestimated in tradi - The second looks at how transaction -intensive the interaction tional World Bank project cycles. between clients and providers is. These three attributes-adaptation, context, and process- Decisions that are low discretion with few transactions, form the pillars of successful capacity building in the social such as a cash withdrawal from a bank account, can be and field . Together they provide the rationale for a new conceptual usually are mechanized. Decisions that are low discretion with framework for capacity enhancement, and as such argue many transactions, such as child immunization, can be called strongly for the crucial role of local capacity in bringing the "programs." Because they are standardized, "programs" are developing world's poor out of poverty. perfectly well suited to the organizational structures of large bureaucracies, which enable resources to be carefully man- Cap~city and the nature of decision aged and controlled. Highly discretionary decisions with few makmg transactions, such as setting interest rates, can be defined as "policies." These are also well suited to modern bureaucra- WITHIN THE WORLD BANK, capacity building initiatives are cies. The problem is that we tend to believe that most develop - often designed as either conventional short courses or self- ment problems, especially those that address the plight of the contained training modules for sharing tools and disseminat - poor, can be solved by either "programs" or "policies." ing best practice. The focus is usually on developing technical The fourth decision- making area is defined as having high skills. Yet this concept of capacity building is so narrow as to discretion and many transactions. These include, for exam - miss out on what contributes most to bringing about change, ple, classroom teaching, curative health care, and agricultural particularly in those areas that most directly affect the poor extension. Each of these requires that clients and providers and marginaliied. The kind of capacity building needed for interact with each other over long periods of time. They can be improved service delivery to the poor themselves, for exam- called "practices," and they are very difficult for large organi- S E PTE M B E R 2 0 0 5 29 zations to undertake since they cannot be solved by formulaic context is important, but that the values, power dynamics, cul- or standard analysis. This realm of "practices" is an important ture, and informal and formal rules of the game dictate but often overlooked weak link in the long chain of activities whether positive social and economic change is possible. and decisions required to deliver services. Without it, the credibility, effectiveness, and responsiveness of the whole A stop and go process enterprise are threatened. THE ARGUMENT HERE points to a definition of capacity Practices vs. programs and policies enhancement as a process, and one that is riddled with false starts, mistakes, and a deCidedly un ~ uniform approach. It also PRACTICES REQUIRE what are called "adaptive" skills to be is extremely difficult to measure. Consider the theme of com- implemented, or those that require fundamental changes in munity-driven development (CDD) . In a paper by Stuart people's attitudes , perceptions, values, and behavior (Heifetz, Gillespie of the International Food Policy Research Institute, 1994). A further interpretation of adaptive problem solving is CDD is defined as a "process that recognizes that poor people to acknowledge that the answers to such problems are usually are prime actors in the development process, not targets of not knowable ex ante, and are compounded when data are externally designed poverty reduction efforts" (Gilllespie, imperfect or incomplete. Even if the answer is knowable, a ~004, p.l). Part of this process is not to push communities too solution arrived at through some form of" adaptive" process is fast- if proponents "drive for quick time -bound results that a qualitatively different answer to the same outcome arrived at compromise quality" he argues, capacity development through technical means alone because it is then endowed becomes "anathema to a true learning by doing approach" with a degree of ownership and legitimacy. Many problems in (Gillespie, ~004, p. 4~)· the social sphere, because of their very complexity and rela - These and other studies show that local capacity must be tional nature, require adaptive skills to be solved. sustained over a period of time and among a wide range of Engaging in adaptive problem- solving as identified here, stakeholder groups. Such capacity building must be targeted however, by its very nature relies on a fundamental under- and designed on the basis of current capacity and local knowl- standing of local context. If services are to be provided to the edge and skills. The South Asia Region's Social Development poor-and be sustainable once delivered-they must build on Strategy sums it up well: "In talking about social development local capacities, or on those who best understand the local we are talking about long-term processes of social change. context. Understanding, tapping into, and building on such This happens slowly because it involves changes in the norms local capacities, however, takes time and does not fit the stan- and values that underlie behavior." Generating and sustaining dardized systems often advocated by external policymakers. A these changes in behavior is necessarily a relationally inten- recent OED evaluation on social development points to the sive exercise. Corresponding capacity enhancement initia - finding that "learning about peoples' behavior and opinions tives need to reflect this . ~ in a continuous fashion is essential to ensuring that project objectives are relevant to peoples' needs, and that project Mary McNeil is Senior Operations Officer, Social Development, The implementation must take account of local realities" (World World Bank Institute Bank, ~003, p . ~l) . Michael Woolcoc k is Senior Social Scient ist, DEC Research Group, This approach was first tested in the early 1990S in the water The World Bank. and sanitation sector, where studies showed the failure of water supply services when implemented through mechanisms "in References which a universal need was met by a technical (supply) solu- Gillespie, Stuart (2004) "Scaling Up Community-Driven Development: A tion, and then implemented by an impersonal, rules - driven, Synthesis of Experience." FCND Discussion Paper No. 181. International Food Policy Research Institute, Washington, D.C. provider (Pritchett and Woolcock, ~004, p. 196) . This message was borne out by OED evaluations that found that "reliance on Guggenheim, Scott (forthcoming) "The Kecamatan Development Program, local knowledge and experience may result in higher upstream Indonesia." in Anthony Bebbington, Scott E. Guggenheim, Elisabeth Olson, and Michael Woolcock (eds.) The Search for Empowerment: Social Capital as costs (building in time for input, consultation, capacity build- Idea and Practice at the World Bank. Bloomfield, CT: Kumarian Press. ing' and conflict resolution), but determined that the Heifetz, Ronald (1994) Leadership Without Easy Answer.s, Cambridge, MA: improved sustainability of projects where stakeholders are Harvard University Press. sufficiently involved made up for this" (World Bank ~003, p. Pritchett, Lant and Michael Woolcock (2004) "Solutions when the solution is ~5) . A similar paper prepared by UK's Department for the problem : arraying the disarray in development" World Development International Development (DFID) also points to the need to 32(2):191-212. better understand local context before designing interven- Unsworth, Sue, and others. 2003. " Better Government for Poverty tions. Donors, the report argues, "should start with an analysis Reduction: More Effective Partnerships for Change." Draft . Department for of each country's particular context, not a specific list of poli- International Development, London. cies. Understanding the social, political and historical context World Bank (2003) "An OED Review Of Social Development In Bank will help identify the underlying factors which could promote Activities." Report No. 26482. Operations Evaluation Department, or inhibit pro -poor change" (Unsworth and others, ~003, p. 1). Washington, D.C. Social development argues not only that understanding local 30 Development Outreach WORLD BAN K I NSTITUTE BEYOND 2005 Changes in Donor Roles and Behavior BY RICHARD MANNING Gleneagles meeting, is clear: capacity development is one of the most critical issues for both donors and partner countries. THE YEAR 2005 has been seen by many as a "make or break" So we have both the resources and the pressure for results, year for accelerating progress towards the Millennium which represent possibly the best opportunity donors have Development Goals. We can already say that we have the clear ever had for helping developing countries address the long- prospect of very Significant increases of aid- possibly an addi- term challenge of capacity development. Capacity is not a tional $50 billion per year by ~01O and beyond. At the same fixed quantum, but to increase it will require more sensitive, time, one conclusion of the major reviews such as the coordinated and longer-term investment than donors have Commission for Africa, the Millennium Review, and the G8 often made in the past. WFP ( . ~ Programnlc ~ ~ Alimcntairc ~ iff Mondial --"?' - S E PTE M B E R 2 0 0 5 31 \ ' OICES FROl\1 TilE FIELI · Capacity Building and the Results Conundrum BY STEPHANIE NEILSON targets or outcome areas: individuals, organizations, net- AND CHARLES LUSTHAUS works, state, and societal (i.e., the users of the research) . Using these five levels of capacity targets or outcome areas THE INTERNATIONAL DEVELOPMENT RESEARCH CENTRE may provide donors and others alike a way to more fully (IDRC) , based in Canada, supplies funding and technical and systematically describe, and reflect on, who or in what assistance to researchers in developing countries to carry area they are trying to effect change. out applied research on the problems and issues that southern researchers and policymakers have identified as Capacity building and the dominant crucial to their communities. To operationalize this mis - approaches sion, and fundamental to its approach for development, one of the Centre's strategic goals is to "strengthen and MOST DONORS HAVE A WIDE ARRAY of modalities they help mobilize the local research capacity of developing use to engage in capacity building activities to build countries. " research capacities. The type of approach used seems to be IDRC has three broad programming areas-Social and determined by the set of circumstances linked to the con- Economic Policy, Environment and Natural Resource text, needs, donor, project designers and prevailing ideol- Management, and Information and Communication ogy. Some donors focus on themes and thus utilize Technologies for Development- which are operationalized approaches that can provide resources that are linked to through l~ Programming Initiatives providing the techni - help individuals , agencies, and networks improve the cal support and funding for applied research in Mrica, Asia capabilities of those working on the theme . Others focus on and Latin America. organizations or institutions and thus their major In ~oo4, IDRC initiated a strategic evaluation to gain a approaches are related to organizational and institutional deeper understanding of what the Centre means by" capac - development. Approaches come in and out of favor as well. ity building," and to examine the capacity results it has For example, a number of years back some donors stopped achieved, what works, what doesn't work, and what work funding scholarships to their country because they felt it remains to be done . In early ~oo5, IDRC commissioned contributed to the so - called "brain drain. " Also a few years Universalia Management Group, Ltd. (UMG) to carry out ago, donors preferred twinning arrangements between and three key pieces of this strategic evaluation. At the time of among research centers as a mode to build capacity. While this writing, UMG had completed the first piece, which was funders might have investment patterns, we have not an investigation into how IDRC staff and managers under- located any evidence that provides insight on what types of stand capacity building and how they ope rationalize that approaches work in what setting. The lessons thus far tend understanding in their work. to be quite context specific. Three primary targets or outcome areas of capacity building are: individual, organizational and systems level. lDRC's theory of action Data from our interviews suggest that IDRC primarily talks about these three targets or outcome areas; but the inter- IDRC FOCUSES ON CAPACITY BUILDING at five levels- view data as well as data from document reviews also sug- i.e., individual, organizational, network, state, societal, or gest that interventions occur through networks, and by the users of the research. But the entry point, or theory of state and society. This means, that there are essentially five change, for these outcome areas is the individual: they 34 Development Outreach WO RLD BANK INSTITUTE affect change through individual researchers, with the vant research. To do this requires a different set of activi- expectation that these "champions" will go on to affect ties to be put in place then for those projects where the change within their organization, network, etc. For exam- researchers need to build their capacity in basic research ple, in some of the Environment and Natural Resource skills, or carrying out research projects. Management projects carried out in Latin America, the emphasis tends to be more on the organization, since many Conclusion of the partner organizations IDRC works with in that par- ticular region are considered to be quite "mature." FOR lORe. AS FOR MOST DONORS. the diffiCulty lies in However, even though the outcome area is at the organiza- creating a deeper understanding of how to use the various tionallevel, the actual focus of the capacity building inter- tools and activities to create approaches for capacity build- vention is often at the individual level. As such, IDRC ing that are robust and sustainable for the context within focuses most of its investments on activities that support which they are operating. There is now a strong interest at building their individual capacities to carry out high quali- ID RC to explore the idea of carrying out research on differ- ty research and evaluation that can be used by others, ent approaches to capacity building and how these including policy and/ or decision makers (both inside and approaches can be linked to results. As we look towards the outside government, at various levels of government), by future of what capacity building interventions work or business and other private sector actors, by lobbyists and don't work, these are some of the most burning questions advocates, and by other researchers. It is through this indi- that we will need to explore further. ~ vidual work that IDRC expects to get at those capacities found in the other target or outcome areas . Stephanie Neilson and Charles Lusthaus, Universalia Management Groups, Ltd. , Ottawa, Canada IDRC's and the individual Universalia Management Group (UMG), Ltd, is a Canadian WHEN WE SPOKE TO PEOPLE at IDRC, most identified a management consulting firm that specializes in carrying out wide array of activities they use to build capacity; yet the monitoring and evaluation assignments, working with clients activities they choose as part of the intervention process to strengthen their M&E capacities, and implementing and are often quite random or "ad hoc": they select the activi - managing complex development projects. For more information, ties that they know and are comfortable with, but our study visit: www.idrc.org and www.umg.ca reveals that those choices are not necessarily theory-driv- en. Consistent with what we found in the literature, few Resources: people talked about a process (i.e., diagnosis -prescrip- Lusthaus, Charles, Adrien, Marie-Helene, Anderson, Gary, Carden, Fred, tion -reflection), or how they mixed and matched activities Montelvan, George. (2002) . Organizational Assessment: A Framework for Improving Performance, Inter-American Development Bank, Washington into a specific approach for helping to build research DC and I DRC, Ottawa Canada . capacities. Instead, most talked about their approach to capacity building as being a mixed bag of activities, often a Lusthaus, C., Adrien , M., Anderson, G., and Carden, F. (1999). Enhancing Organizational Performance: A Toolbox for Self-Assessment, combination of training coupled with hands on experi- IDRC, Ottawa. ence. Lusthaus, C. , Anderson, G. , and Murphy, E. (1995). Institutional Another key aspect to capacity building at IDRC has Assessment: A Framework for Strengthening Organizational Capacity for been its focus on formal training programs and awards, IDRC's Research Partners, I DRC, Ottawa. including Masters and PhD level training. During the Universalia. (2005). "Capacity Building at IDRC: Some Preliminary 199os, however, much of this programming was disman- Thoughts." Paper prepared for IDRC's Evaluation Unit, Ottawa , Canada. tled due to the international aid cutbacks that most donors Whyte, Anne. (2004). "Landscape Analysis of Donor Trends in and aid agencies had to endure. In our interviews, howev- International Development" . Paper prepared for Human and Institutional er, the need to re-establish a formal training program at Capacity Building: A Rockefeller Foundation Series, Issue 2, New York . IDRC was mentioned frequently. Many of these respon- dents mentioned this as a key bottleneck with their part- ners in Latin America, with a particular emphasis on PhD level training on natural resource management and gender issues and analysis. The issue in Latin America, however, is not so much on building basic research skills, but rather the need to strengthen researchers' abilities to contribute to IDRC's development results (for example, influencing public pol - icy) by strengthening their capacity to be policy relevant, to be close to the policy process and to articulate policy rele - S E PTE M B E R 2 0 0 5 35 B()O"SIIELF miniATLAS OF MILLENNIUM THE MARKET FOR AID, MichaeL KLein DEVELOPMENT GOALS: BUILDING and Tim Haiford. The World Bank, 2005. A BEnER WORLD, WorLd Bank, In an accessible style Michael Klein 2005. and Tim Harford argue that the aid The third volume in the miniAtlas industry is changing, old models of series is an at- a-glance guide to the aid are under pressure, and both world's most pressing problems and donors and recipients will ask more challenges. Illustrated in a clear and and more of aid agencies in the accessible format, the miniAtlas future. The chaos of competition and presents colorful world maps and the search for new ideas risk harming engaging graphics that provide a wealth of information for the people whom the industry is supposed to benefit. Yet over ~oo countries and territories on today's key global at the same time there is a tremendous opportunity to issues, from eradicating poverty and reducing child improve performance. Klein and Harford argue for mortality, to eliminating HIV/AlDS , and promoting rigorous methods of evaluation and creative use of the environmental sustainability. Specially designed to show private sector to produce a more effective aid industry in detailed information on a small scale, the miniAtLas of which new experiments are encouraged. MiLLennium DeveLopment GoaLs is a handy introduction and quick reference for better understanding the most GLOBAL CRISES, GLOBAL Bjorn Lomborg important issues facing our world today. SOLUTIONS, Bjorn Lomborg, ed. GLOBAL Cambridge University Press, 2004. ; s; GOVERNANCE MAnERS IV: GOVERNANCE INDICATORS GRISES, A unique publication exploring the FOR 1996-2004, D. KaufmannA. Kraay, andM. Mastruzzi. GLOBAL . opportunities for addressing ten of the The WorLd Bank, 2005. most serious challenges facing the This publication presents the latest update of the world today: Climate Change, estimates of six dimensions of governance covering ~09 Communicable Diseases, Conflicts, countries and territories for five time periods: 1996, 1998, Education, Financial Instability, ~ooo , ~OO~ and ~004 . These indicators are based on Corruption, Migration, Malnutrition and Hunger, Trade several hundred individual variables measuring Barriers, Access to Water. In a world fraught with perceptions of governance , drawn from 37 separate data problems and challenges, we need to gauge how to achieve sources constructed by 31 different organizations. The the greatest good with our money. GLobaL Crises, GLobal data, as well as a web -based graphical interface, are Solutions provides a rich set of arguments and data for available at www.worldbank.org/wbi/governance/govdatal. prioritizing our response most effectively. AFRICAN DEVELOPMENT COLLAPSE: HOW SOCIETIES INDICATORS 2005: FROM THE CHOOSE TO FAIL OR SUCCEED, WORLD BANK AFRICA DATABASE, Jared Diamond. Viking, 2004. The WorLd Bank, 2005. CoLLapse examines why ancient This book provides the most societies, including the Anasazi of the detailed collection of data on Africa American Southwest and the Viking available in one volume. It contains colonies of Greenland, as well as more than 500 macroeconomic, modern ones such as Rwanda, have sectoral, and social indicators, fallen apart. Not every collapse has an covering over 50 African countries with data from 1965- environmental origin, but an eco -meltdown is often the ~003 . The volume is designed to provide all those main catalyst, he argues , particularly when combined with interested in Africa with a focused and convenient set of society's response to (or disregard for) the coming data to monitor development programs and aid flows in disaster. Diamond provides well-reasoned historical the region, this is an invaluable reference tools for examples, making the case that many times economic and analysts and policymakers who want a better environmental concerns are one and the same. understanding of the economic and social developments occurring in Africa. 36 Development Outreach WOR L D BAN K I NST I TUTE BOO"SIIELF _ I .· ··C · .. ' , _ . . .... /. ' .''J~. .,.~.. " " ;~-'" IN DEFENSE OF GLOBALIZATION, PRIVATIZATION IN LATIN AMERICA: MYTHS AND Jagdish Bhagwati. Oxford University REALITY, Alberto Chong, Florencio Lopez de Silanes, eds. l~:~' Press, 2004. Stanford University Press, 2005. The author wants to dispelled the Privatization is under attack. Beginning in the 1980s, view that globalization has done thousands of failing state- owned enterprises worldwide little good for poor countries. He have been turned over to the private sector. But public supports his arguments with opinion has turned against privatization. The book is a In Defense of statistics from the Asian compilation of recent studies that provide a comprehensive Globalization Development Bank, which show analysis ofthe record of and accusations against that in China the policies that privatization, with important recommendations for the characterize globalization reduced future. Seven countries are investigated: Argentina, poverty from ~8% of the population in 1978 to 9% in Bolivia, Brazil, Chile, Colombia, Mexico, and Peru. 1998. Bhagwati recommends that continued globalization should be managed, highlighting poliCies he believes will CAPACITY FOR DEVELOPMENT: NEW SOLUTIONS TO strengthen and ensure its positive effects. OLD PROBLEMS, Sakiko Fukuda-Parr, Carlos Lopes, Khalid Malik. UNDP, 2002. The book contains a range of views from practitioners, 2004 ANNUAL REVIEW OF academics, and policy maker about what has gone right DEVELOPMENT EFFECTIVENESS: with technical cooperation in recent years, what has gone THE BANK'S CONTRIBUTIONS TO wrong and how to do it better and perhaps very differently. POVERTY REDUCTION, Christopher In so dOing, it focuses on the questions of indigenous D. Gerrard. The World Bank, 2005. capacity, ownership, civic engagement, and knowledge . This book looks at the recent growth and poverty reduction experience of CAPACITY BUILDING IN AFRICA, Catherine Cwin. client countries. It assesses the OEDlWorld Bank, 2005. extent to which Bank interventions This evaluation assesses Bank support for public sector have contributed to growth and poverty reduction and the capacity building in Africa over these past 10 years. It is effectiveness of different types of interventions. The based on six country studies, assessments of country review uses the key elements of the Bank's ~001 poverty strategies and operations across the Region, and review of reduction strategy to examine the extent to which these the work of the World Bank Institute, the Institutional elements respond to the needs of the poor, are actually Development Fund, and the Bank-supported African being carried out, and are having an impact. Capacity Building Foundation. INTERGOVERNMENTAL FINANCE IN HUNGARY: A INVOLVING THE COMMUNITY: A GUIDE TO DECADE OF EXPERIENCE 1990-2000, Mihaly Kopanyi , PARTICIPATORY DEVELOPMENT COMMUNICATION, Deborah Wetzel, Samir El Daher, eds. Open Society Guy Bessette. SouthboundlIDRC, 2004. Institute/Local Government and Public Service Refonn Initiative This guide it introduces participatory development and World Bank, 2005. communication concepts, discusses the effective two -way This book illustrates the decade - long transformation of communication approaches, and presents a methodology the Hungarian sub national system with a focus on to plan, develop, and evaluate communication strategies to sub national finance. It builds upon dozens of policy address the following questions: How can researchers and analyses prepared by local and international specialists practitioners improve communication with local and covers various aspects of municipal life, such as: communities and other stakeholders? How can two-way revenue and expenditure assignments, taxation, communication enhance community participation? How intergovernmental transfers, strategic planning, can researchers, community members, and development outsourcing, public -private partnership, utility practitioners improve their ability to effectively reach regulation, asset and liability management, municipal policymakers and promote change? enterprises, household arrears, project financing, borrowing, and insolvency resolution. S E I' T E M B E R 2 0 0 j 37 THE CAPACITY guidelines, case experiences, learning materials, expertise DEVELOPMENT and related sites. RESOURCE CENTER www.capacitywhoiswho.netlindex.cfm provides an overview of the literature, case studies, lessons learned , and good practices pertaining to capacity development. It also includes links to TECHNICAL ADVISORY international and local capacity development agencies and PANELS & NETWORKS other knowledge resources. The website is primarily (TAP-NETS) of the Mrican intended to support World Bank task teams and other Capacity Building development professionals who support country-led Foundation (ACBF) is a capacity development initiatives. network of highly www.worldbank.orglcapacity competent and experienced professionals, intellectuals, development practitioners, researchers, policymakers, civic leaders, captains of industry and commerce, among others. It focuses on a GOVERNANCE MATTERS IV wide range of topics that include financial management covers the Governance and accountability, public adlninistration, economic Indicators for 1996-~oo4 , policy and parliamentary institution. drafted by D. KaufmannA. www.acbf-pact.org/tapnetslindex.asp Kraay, and M. Mastruzzi. This is the latest update of the estimates of six dimensions of governance covering ~o9 countries and ELDIS is an internet based territories for five time periods: 1996, 1998, ~OOO, ~OO~ "'-"--::.=r"~ information service: --==='=.::::'.:1.- and ~oo4. These indicators are based on several hundred filtering, structuring and individual variables measuring perceptions of governance, presenting development drawn from 37 separate data sources constructed by 31 information via the web different organizations. The data, as well as a web - based and email. It maintains an graphical interface, are available at: ever- growing library of www.worldbank.orglwbi/governance/govdatal editorially selected and abstracted online documents, and an organizational directory of development-related internet services. www.eldis.org CAPACITY DEVELOPMENT .= -==.--- - - - -- - NETWORK (CDNET) is an open source virtual workspace providing THE IMPACT ALLIANCE - :=.-= opportunity for dialogue, is the first global capacity -~. exchange and learning on building network -::::---- -=--=-"'= capacity development. comlnitted to bringing the -=--===- Registered users can create - ::.=- know- how of hundreds of their own discussions, leading edge organizations working groups and libraries on CD topics of their from all sectors of choOSing. "Resource Corners" serve as managed development to your door. incubators for collective work around specific themes. This initiative is hosted by They include "Resource Guides" that will eventually offer PACT (see below) . Sign in syntheses of pertinent research and analysis, tools and to access high quality technical assistance, collaborate with 38 Development Outreach WORLD BAN K INS TI TUTE K:,\ () \\" L E J) (; E R I·: S () l R (: E S peers, or exchange ideas, tools, training curricula and field. Capacity.org aims to encourage perspectives and publications on capacity building. experiences from the South, to provide ease of access to www.impactalliance.org related materials and topics, and to promote a virtual platform for exchange. www.capacity.org PACT is a networked global organization that builds the capacity of local leaders INWENT -Internationale Weiterbildung und Entwicklung and organizations to meet (Capacity Building International, Germany) is pressing social needs in synonymous with human resources and organizational dozens of countries around development in international cooperation. It addresses the world . Its work is firmly rooted in the belief that local specialists, executives and decision-makers in industry, communities must be the driving force in ending poverty politics, administration and civil society. InWEnt works and injustice. with partners in developing countries, transition states, www.pactworld .org and industrialized nations. www.inwent.org THE AFRICAN CAPACITY BUILDING FOUNDATION AID WORKERS NETWORK (ACBF) is the leading links relief and Mrican institution in a development field staff to partnership to build share support, ideas and sustainable capacity for best practice. This web site good governance and is being developed by a poverty reduction in Mrica. Its objectives are to build and team of experienced aid workers to provide a strengthen sustainable human and institutional capacity in comprehensive resource for busy field workers needing the core public sector, in the sector's interface areas with practical advice and proven resources to help with their the private sector and civil society, in training and current work. The Aid Workers Network is a place to ask research institutions as well as within regional questions and find answers. This happens at the Aid organizations in order to spur economic growth, poverty Workers Forum and through the weekly email bulletin, reduction, good governance and effective participation by Aid Workers Exchange. Mrica in the global economy. www.aidworkers.net www.acbf-pact.org/index.asp INTERNATIONAL INSTITUTE FOR SUSTAINABLE CAPACITY.ORG is an DEVELOPMENT (IISD)'s capacity development work in initiative of the European the Measurement and Assessment area is focused on Centre for Development moving towards more policy- relevant sustainable Policy Management with development assessment, reporting and planning. the aim to look at policy In close cooperation with the Global Environment and practice of capacity Outlook (GEO) initiative ofthe United Nations development within Environment Programme (UNEP), IISD is spearheading international development cooperation. With a focus on the delivery and further development of a training both the "why" of capacity development - fostering debate program aimed primarily at developing and transitional on policy questions-and the "how" of capacity country audiences. development-learning from practical experiences in the www.iisd.org S E PTE M B E R 2 0 0 5 39 (: \ I, I·: '\ I) \ R SEPTEMBER 2005 17 International Day for the Eradication of Poverty UN Headquarters. NY, and worldwide 21 International Day of Peace http://www.un.org/ esa/ socdev/poverty/ Worldwide povertyjink3.htm www.internationaldayofpeace.org 2 4-25 World Bank and IMF ~oo5 Annual Meetings NOVEMBER 2005 Washington, DC www.imf.org/external/aml~oo5/index.htm 16-18 World Summit on the Information Society Tunis, Tunisia www.itu.int OCTOBER 2005 3 World Habitat Day DECEMBER 2005 United Nations, New York www.unhabitat.org 1 World AIDS Day habitat. press@Unhabitat.org www.worldbank.org/worldaidsday 13- 14 Child Survival Countdown to ~OlS 12 International Day for Disaster Reduction www.unisdr.org London, UK www.childsurvivalcountdown.com 15 World Rural Women's Day Geneva, Switzerland 13- 18 Sixth WTO Ministerial Conference www.rural -womens-day.org Hong Kong, China wwsf@vtxnet.ch http://www.wto.org/e nglishithewto_el minisLel mine 5-el minos_e. htm 16- 20 Labor Practices in the Footware, Leather, www.wto .org Textiles, and Clothing Industries Geneva, Switzerland www.ilo.org OiYireach Subscription Order Form SUBSCRIBERS FROM DEVELOPING NAME COUNTRIES WILL CONTINUE TO RECEIVE THE MAGAZIN E FREE OF CHARGE. TITLE ORGANIZATION SUBSCRIPTION FEE APPLIES TO READERS IN THE FOLLOWING DEVELOPED COUNTRIES: ADDRESS _______________________________________________________ Australia, Austria, Belgium, Canada, Denmark, Finland , France, Germany, Greece, Iceland, Ireland, Italy, Japan, Kuwa it , Luxembourg, CITY AND STATE OR PROVI NCE _________________________________________ Monaco, Netherlands, New Zealand, Norway, Oman, Portugal, Spain, Sweden, Switzerland, COUNTRY _______________________________________________________ United Arab Emirates, United Kingdom, United States, and Vatican City. ZIP I POSTAL CODE _________________________________________________ PHONE ________________________________________________________ FAX Please print or type all information E-MAIL ________________________________________________________ o YES, sign me up for Development Outreach Please do not send cash . Make checks payable to Development OUTREACH/WBI. for 2005 for just $ 18 o Check no.________ in the amount of $_____ is enclosed. (three issues per Mail order to: calendar year, January- Editor, Development OUTREACH December) The World Bank 1818 H Street, NW, Room J2-200 Washington, DC 20433 USA Nelson Mandela Institution for Knowledge Building and the Advancement of Science and Technology in Sub-Saharan Africa Goal: To address the growing knowledge gap in SSA by playing a direct and catalytic role in improving the understanding and application of science and technology in the development of the region. Vehicles: The African Institute of Science and Technology (AIST). and the Sub-Saharan African Learning Network (SSALN). Conceived and designed by African scientists and professionals. the NMI is rooted in a strong public-private and industry-academy partnership for long-term overall sustainability. http://www.nmiscience.org REDEFINE THE , ,"'D,eve,lop,me,nt Learning Network is a worldwide partnership of learning Affiliates) that offer the use of advanced information and communication GEOGRAPHY OF YO 1!I'..tI",,",'In<.iA" and specialized distance learning tools to conned people working in DEVELOPMENT BUSI GDLN Affiliates are located In over distance learning courses on development local knowledge and resources and to 60 countries worldwide. Their issues; development agencies seeking access the very best expertise in any facilities Include classrooms with dialogue with key partners; governments field, anywhere in the world. vldeoconferencing and high-speed discussing trade with other countries; and Internet resources such as email and non-governmental organizations planning II Mark your presence In local, regional, Instant messaging. These are joint activities with partners around the and global development dialogues. combined with facilitation and world_ Today, GDLN counts more than 70 learning techniques depending on Affiliates around the world, and an specific users' needs. Through these II Rethink capacity building and technical estimated 25,000 people participate in technologies and techniques, GDLN assistance. GDLN events every year. Dialogues and Affiliates enable organizations, Through GDLN, you can deliver learning learning exchanges among developing teams, and Individuals to and training activities directly to your countries have become a common feature. communicate across distances In a clients in the field at lower costs, and For example, development practitioners in timely and cost-effective way. participants can immediately apply new Africa, Asia, and Latin America use GDLN knowledge and skills in their work. to share experiences about education II Reach out to your counterparts and Leverage GDLN Affiliates' national and reform, HIVI AIDS prevention, clients quickly and cost-effectively. regional partner networks to mobilize community-driven development, and GDLN Affiliates can connect you with other key development issues. your development partners around the world for meetings, coordination, and knowledge sharing events. Our clients include academic institutions offering GDLN in action: Interactive video conferences with participants in Afghanistan and Latin America "India and the Knowledge Economy is a must read for those in government, the private sector and civil society commined to improving India s future in an increasingly competitive and demanding international environment. " Arun Maira, Chairman, Boston Consulting Group, India "India and the Knowledge Economy will be of interest not only to key stakeholders in India, but also to those interested in the tremendous power of knowledge and innovation as central elements of a country's development strategy. " Dr. R.A. Mashelkar, Director General, Council of Scientific and Industrial Research of India India and the Knowledge Economy: Leveraging Strengths And Opportunities Carl Dahlman and Anuja Utz In the global knowledge economy of the twenty-first century, But India can do more--much more-to leverage its strengths India's development policy challenges will require it to use and grasp today's opportunities. India and the Knowledge knowledge more effectively to raise the productivity of agricul- Economy assesses India's progress in becoming a knowledge ture, industry, and services and reduce poverty. India has economy and suggests actions to strengthen the economic made tremendous strides in its economic and social develop- and institutional regime, develop educated and skilled workers, ment in the past two decades. Its impressive growth in recent create an efficient innovation system, and build a dynamic years-8.2 percent in 2003--can be attributed to the far- information infrastructure. It highlights that to get the greatest reaching reforms embarked on in 1991 and to opening the benefits from the knowledge revolution, India will need to economy to global competition. In addition, India can count press on with the economic reform agenda that it put into on a number of strengths as it strives to transform itself into motion a decade ago and continue to implement the various a knowledge-based economy-availability of skilled human policy and institutional changes needed to accelerate growth. capital, a democratic system, widespread use of English, In so dOing, it will be able to improve its international competi- macroeconomic stability, a dynamic private sector, institutions tiveness and join the ranks of countries that are making a of a free market economy; a local market that is one of the successful transition to the knowledge economy. largest in the world; a well-developed financial sector; and a broad and diversified science and technology infrastructure, World Bank Institute Development Study. 2005. 210 pages. Stock no. 16207 (ISBN 0-8213-6207-0). Price: US$25. and global niches in IT. To Order: World Bank Publications P.O. Box 960, Herndon, VA 20172-0960, USA Telephone: 703-661-1580 or 800-645-7247 Fax: 703-661-1501 www.worldbank.org/publications AVAILABLE AT BETTER BOOKSTORES WORLD BANK Publications The reference of choice on development