`Capacity-building is now widely espoused as a new focus for development assistance. Despite the importance of its objectives, however, the concept of capacity-building runs several significant risks as a rubric for organising aid and its supportive infrastructure. First, its scope can appear so all-embracing as to lack utility. Second, it can amount to a re-branding of external assistance without a change in the services being offered. Third, because of its appeal, it risks becoming bureaucratised and subverted by vested interests. More positively, however, capacity-building draws attention to some long-standing and important principles of development assistance that too often have been overlooked.

What is unique about `capacity-building?

In practice, almost all the multifarious factors impinging on the development failures of African countries have been labelled a lack of capacity. This creates a fundamental difficulty in that, taken together, the factors described as incapacity can encompass the entire domain of development. It also renders largely illusory the apparent neatness and focus provided by repeated use of the capacity concept. Consequently, the problem is unlikely to be resolved by specifying different aspects of capacity and then setting up central and local infrastructures for building these identifiable attributes, or for emulating what other countries have done to build them.

The test of the utility of a concept is whether it makes clear what is excluded. The only thing capacity-building appears to exclude is development assistance, in kind or in money, that does not aim - over time - to help local people to do things themselves without external assistance. A capacity-building intervention is thus one that, in some way, makes a positive impact on local skills, attitudes and institutions. But this appears to be no different, in essence, from the rationales for `sustainable development, `teaching people to fish, local empowerment and self-sufficiency that have dominated aid thinking ever since it was recognised that the Marshall Plan approach would not work in developing countries.

How then can the case for capacity-building be distinguished from the wider reaction to the bad press received by international assistance as a result of the perceived failure of developmental policy prescriptions which relied on economic and fiscal restructuring? A more positive view is that capacity-building re-emphasises two important principles:

1.That what is being done by external donors should not only be project-focused, but should take account of the impact of the activity on the wider complexities of the society in question. It is an argument against a blinkered approach to project and sectoral development.

2.That donors should design their interventions with reference to what other donors are doing.

Stated thus, capacity-building is more than a mere re-branding of aid activities. Instead, it seeks to build a constituency to mobilise attention and resources towards limiting `bad aid.

A route to successful aid management?

Many development strategies, fostered by international agencies, have not succeeded because they failed to recognise three facts, namely that:

· societies are very different from each other, so that what works in one place might not work in another;
· societies are very complex, so that the people, systems and processes presenting themselves may not be as they seem - indeed, they may be at cross-purposes with the donors approach; and
· in practice, donor agencies, or their agents and employees, may have goals and incentives different from those that they formally espouse.

These same risks bedevil capacity-building initiatives. For example, activities directed at developing skills, streng-thening policy capability, giving voice to civil society and promoting local ownership of development programmes could work in one place, yet be unsuccessful in another. This raises the question whether successful capacity-building represents a `missing link in the aid agenda.

Development is a complex process, touching on deep issues of human behaviour: it involves working with, and changing, the underlying dynamics of a given society. To be successful, it must be driven by an internal leadership that is willing and able to leverage internal and external resources. It must also appeal sufficiently strongly to a set of deep and shared societal values. Those involved in the process need to be prepared to face the uncertainties, discomforts and even - in the case of some vested interests - dispossessions, that inevitably accompany significant social change. Those fostering change, therefore, must understand and deal with the real sources of power in a society.

Since the nature and determinants of behaviour differ from nation to nation, it is far from clear that calling a complex set of problems `incapacity, and then setting up a hierarchy of organisational structures to `build it, gets to the heart of the problem. The expectation that these units suddenly will be vested with insight and altruism, simply because they operate under the label of `capacity-building and give renewed emphasis to skills and organisational development, clearly is unrealistic. What new analytical models and intervention modes does the capability-building agenda offer that will ensure that the new mechanisms of development assistance will prove more effective than the multitude of other local co-ordination devices set up at the instigation of aid donors over the years?

Regrettably, there is no simple answer to the question of why development assistance is hard, complex and frustrating. Whatever its bureaucratic attractions, however, behaving as if there is an easy answer is counter-productive. The good things about the capacity-building movement are that it reinforces the need to think holistically about development, it emphasises the need for donor co-ordination, and it pays more attention to training and to local organisations. Insofar as it fosters the illusion that there is a coherent set of problems which can be managed by a set of building committees and units, however, the capacity-building approach is doomed to bureaucratisation, subversion and failure. In that case, it will run the risk of being replaced by yet another development fad in a few years time.

Making aid work better

In short, capacity-building emphasises some of the oldest lessons of development assistance Ð in particular, that donors should not focus on investment projects when the preconditions for their success do not exist; and that each donors interventions should take account of the actions of other donors. To these ends, there may be a few rules of thumb that can be applied:

· Gain as complete an understanding of the society as possible before intervening in it.
· Avoid perverse incentives for both donor and recipient officials.
· Make the connections between local decisions and local consequences transparent.
· Use external influence to discourage governance systems that support tyranny in any form.
· Make the most of opportunities and incentives for the empowerment of as wide a variety of enterprising community-, commerce- and nation-building individuals and institutions as possible.

Alex Matheson formerly ran a central agency policy unit dealing with reform issues in New Zealand. He is currently Special Adviser to the Commonwealth Secretariat, e-mail: amatheson@compuserve.com

Published with permission. The article was first published in the OPI Issues Notes, No.1: January 2000 of the Oxford Policy Institute.