In 2004, ADB adopted capacity development as one of its thematic priorities. In its approach to capacity development, ADB emphasizes the principles of local ownership and adaptation to local institutional realities; the strengthening of country systems; the achievement of clear targets over the medium to long term; use of appropriate incentive systems; and partnerships between governments, civil society and the private sector.

In 2007, ADB launched a Capacity Development Medium-Term Framework and Action Plan, which focuses on mainstreaming capacity development into country programs and operations as well as in its own internal support systems. In line with internationally established practices, the Medium-Term Framework identifies three dimensions of capacity development:

• institutional development (legal and regulatory frameworks, poverty reduction strategies, key features of the public administration, etc.)
• organizational development, including human resources
• networks and partnerships

The Action Plan was refined in 2010 to make it more focused, better monitorable and stronger aligned with ADB business processes.