A Growing Priority

Capacity development is a high priority for ADB, which has long supported the growing international consensus that the capacity of countries to manage their own affairs is vital to public sector performance and sustainable development.

Increased capacity in the DMCs creates opportunities for ADB to stimulate economic growth, and opens the door to supporting a broad, inclusive development agenda. Moreover, increased development capacities will improve the cost-effective delivery of public goods and services.

Making the most of development resources

By providing extensive support to developing member countries (DMCs) ADB enables their governments, institutions, organizations, societies and people to forge effective policies, reforms, and investments needed to realize development goals and reduce poverty. Loan approvals between 2007 and 2010 with capacity development as a theme included 133 programs and projects totaling $15.4 billion.

The context for ADB’s approach to capacity development comes from its endorsement of the 2005 “Paris Declaration on Aid Effectiveness”, which called for a commitment from member countries and development organizations to dramatically improve aid effectiveness. More specifically, the Paris Declaration (and its successor, the “Accra Agenda for Action”) called for a harmonization of approaches and an increased reliance on DMC systems for the implementation of programs and projects.

With regard to capacity development support, this required a shift from a short-term, project specific focus, to an approach that sought to strengthen existing in-country systems and procedures over the long term.

In line with this global development agenda, ADB adopted capacity development as a key aspect of its Reform Agenda in 2004. The same year, capacity development was also elevated to a new thematic priority for ADB lending and technical assistance (TA) operations. By doing so, ADB acknowledged that strengthened country capacity is not only a means to achieving public sector performance, but is an essential prerequisite for optimizing the impact and sustainability of development aid.

This emphasis on capacity development symbolizes a shift toward measures that enable national empowerment and a more balanced relationship among funding agencies, national governments, and other organizations. Effective capacity development is also essential if the Millennium Development Goals are to be achieved.

Today, almost all ADB support to DMCs, from road maintenance projects in Bhutan and Tonga to water and sanitation schemes in Pakistan and Sri Lanka, feature the principles of local ownership and adaptation to institutional realities.

ADB’s Capacity Development Framework and Action Plan

ADB integration of capacity development into its internal operations and DMCs partnership strategies is detailed in the Capacity Development Framework and Action Plan, which was adopted in 2007. The plan targets country-level programs and operations as well as ADB’s internal support systems for capacity development.

ADB's capacity development interventions aim to provide strategic and innovative support to enhance DMC capacities to formulate and implement policies, reforms, and investments needed for poverty reduction. Interventions target the national, sub-national, and sector levels in DMCs to develop institutional, organizational, and network/partnership capacities.

Rather than assuming a single concept of capacity development that can be indiscriminately applied across countries, the document offers a framework that can be adapted by regional departments to suit the individual needs of their client DMCs. The framework identifies three main dimensions of capacity development:

  • Organizations, including the individuals employed by those organizations. This dimension, which includes executing and implementing agencies, is the most immediate entry point for ADB capacity development support;
  • Institutions, which includes a country’s political economy and governance environment, its broad development agenda, legal and regulatory frameworks and key systems and procedures related to the public administration machinery; and
  • Inter-organizational and group relations, emphasizing the need for cooperation and collaboration between different segments of the institutional and organizational landscape (public sector, private sector and civil society).

In 2010, the Action Plan got slightly refined in light of ADB’s streamlined business processes. In its current form, the Action Plan comprises two outcomes, which are broken down by a number of results areas:

An overriding characteristic of ADB’s approach to capacity development is that support should always be focused on (i) strengthening a country’s public sector management and governance systems; and (ii)  the achievement of  specific sector and organizational objectives.

ADB also supports capacity development by developing and sharing new knowledge products, providing demand-driven advisory services, and by supporting investments aimed at building institutions and organizations that are accountable and effective in their operations and responsive to the needs of the poor. ADB also supports the Capacity Development for Development Effectiveness Facility For Asia-Pacific (CDDE).

In ADB’s approach, capacity development, public sector management and governance are positioned as directly linked and mutually reinforcing. Governance sets specific public sector management standards and capacity development is instrumental to achieving those standards. A good governance environment, in turn, is likely to be conducive to utilizing capacity and thus to the achievement of organizational objectives.

The Capacity Development Framework and Action Plan is accompanied by a toolkit – or “Practical Guide” – which includes a range of diagnostic tools and instruments that can be used in the design and implementation of capacity development support.