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Knowledge and Capacity Development


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  • 1. IFAD Workshop Balancing Hard and Soft Investments
    Knowledge and Capacity Development
    G. Alaerts
    The World Bank
    April 18, 2011
  • 2. Getting a grip on the issues
    “Hard investments” – works, equipment, surveys, technical designs, etc.
    “Soft investments” – any activity in the social and institutional spheres that increases (i) quality of the project prioritization, (ii) net development impact, and (iii) financial sustainability of investments and programs.
    Policy and strategic frameworks
    Institutional strengthening and reforms
    Knowledge and capacity development KCD (encompasses all the above …)
    For financier: Project design, program management, M&E, learning …
  • 3. World Bank and international approaches
    WB: has strong interest in
    quality of portfolio,
    development impact,
    sustainability  capable institutions  reforms
    Much work on Impact assessment, M&E
    Much work on Results in CPS and program design
    Comparatively little discussion on institutions and KCD
    ADB, UNDP, EU: More work on KCD and how to assess capacity and its improvement
  • 4. World Bank considerations
    Better investment prioritization, plus design and ownership, have in past decade led to better results
    Since mid-90s financing is no longer key impediment to sector development:
    Much observable need, but constrained internal demand
    Financiers (World Bank, ADB, IDB, …) often cannot achieve lending targets
    EU cannot disburse cohesion funds to member countries; absorption is around 10-20%
    WSS PPP failed partially, partly because it was expected that private partner can bring and help absorb funds
     Major leap in efficiency of institutions and absorption capacity required within next decade
  • 5. World Bank and international approaches
    WB: two-pronged approach
    70-80s: 5% of loans used for TA and training
    > 80s: more KCD
    Institutions: reforms through conditions, budget support and TA
    Challenge: tension between (i) short-term “results”-driven and budget-driven /accountable approaches, and (ii) longer-term adaptive approaches building C
    Hard to assess – the latter purported to be more robust; but the former arguably developing economy and providing the “marbles” to learn the “game”
    But clear that KCD without hardware doesn’t work well
  • 6. World Bank experience
    WB review of Africa capacity development(2006):
    TA and training ineffective to build sustainable public sector capacity.
    While some countries do well, average SSA govt capacity has stagnated …
  • 7. World Bank experience: Africa Region
    Is capacity included in the development objective?
    World Bank Institute desk study, 2008 (unpublished).
  • 8. World Bank experience: Africa Region
    Type of capacity development inputs in WB projects
    World Bank Institute desk study, 2008 (unpublished)
    But – no specific data about reforms, institutional strengthening, knowledge development, etc.
  • 9. Principles of KCD
    Two basic approaches:
    Capacity can be developed through inputs, leading in turn to better results positivist approach, assuming causal relations between input and output
    Capacity is emerging from complex interactions that are partly endogenous and partly exogenous  stresses non-plannable nature, prioritizes capacity not results, stresses need for adaptive management
    “What works” can be either, or a combination … depending on the situation, start position (path dependency) and objectives
  • 10. Principles of KCD
    Capacity is the “ability of people, organisations, and society as whole to manage their affairs successfully”
    OECD (2005)
    “Capacity is the ability of individuals, groups, institutions and organizations to identify and solve development problems over time”
    Morgan (1993), UNDP (1993)
     external partners cannot “do” CD of others. Partners can support and direct CD processes, but they cannot manage the actual CD of others  key criterion for success is that CD must be “owned” by those who develop their capacity
  • 11. KCD Principles
    “Capacity is the capability of an institution or society to
    identify and
    understand its development issues,
    act to address these, and
    learn from experience and accumulate knowledge for the future.”
    Alaerts (2009)
    This definition is more
    Linked with knowledge
    Allows to specify verifiable impacts
    “Extra” capacity for learning
  • 12. Principles of KCD
    Adaptive capacity:
    considers changes in external factors in a proactive manner to develop a systemic process for improving management policies and practices, with a central objective of increasing the adaptive capacity of the management regime in general, and the involved actors in particular. (Morgan, Pahl-Wostl)
    “Adaptive management is learning to manage by managing to learn.”
  • 13. Knowledge and capacity – levels diagram (Alaerts and Kaspersma 2010)
  • 14. Knowledge and capacity – measuring capacity
  • 15. KCD rationale
    Very few efforts to quantify ERR
    Indonesia Irrigation Improvement with Water User Associations (WUAs) empowerment (2003):
    Conventional rehabilitation ERR of 10 - 18 %
    Capacity development only  ERR of 20 – 30 %
    Rehab plus enhanced knowledge and capacity of the WUAs  ERR of 30 – 40 %
    Education: Long-run effect of 1 additional year of education in OECD area == 3 – 6% increment in GDP/cap.
  • 16. World Bank tools for results: (i) prioritization
    Country Partnership Strategy (with MoF, stakeholders)
    Country Poverty Reduction Strategy (with other donors)
    Sectoral policy and strategy studies (ESW and TA)
    Operational Risk Assessment Framework (ORAF)
    Quality-at-Entry and other peer-reviews
    Implementation Completion Report (ICR)
    Independent Evaluation Group (IEG) reviews and reports
  • 17. World Bank tools for results: (ii) Monitoring
    IDA Results Monitoring: with key indicators:
    Growth and poverty reduction
    Public financial management and investment climate
    Infrastructure and access to services
    Human development (education, health, equity, …)
    Quality and effectiveness of IDA program activities
    Regular sectoral policy and operational policy reviews
    Experience with Inspection Panel
  • 18. World Bank tools for results: (iii) investment tool kit
    IDA Poverty Reduction Support Credit
    Global Food Response Crisis Program
    Climate Change Mitigation and Adaptation programs
    HPIC and Fragile and Conflict-Affected States
    Global Floods and Disaster Response and Reduction
    GEF-supported projects for environmental sustainability
    Program for Results (P4R) (replaces SWAps, OBA etc)
    Development Policy Loans (budget support + reforms)
    Sectoral programs: Irrigation, agriculture, municipal development, WSS, flood management, health, etc.
  • 19. World Bank tools for results: (iv) in short …
    Two approaches are advocated:
    Focus on short-term tangible results, within set time frames and budgets, and with clear accountability / measurability …
    Focus on longer-term capacity development recognizing endogenous capacity growth, with lower measurability …
  • 20. World Bank tools for results: (iv) in short …
    WB takes pragmatic route 1 enhanced with:
    Priority for sustainable investments, meeting a demand and with demonstrated institutional readiness
    Design flexibility to allow learning-as-we-go (use of Additional Financing, APL and phased projects)
    Lower ambitions on Development Objectives
    Mix in institutional strengthening where opportunity seems to exist
    Use investment to improve economic outlook first
    Use investment to engage and prepare institutions
    No a priori inclusion or exclusion of KCD
  • 21. Diagnosis: multiple paths to a capable state(World Bank Institute 2007)
  • 22. From diagnosis to selection of intervention
  • 23. Other approaches in developing capacity
    OECD, UNDP, EuropeAid –
    stress the complexity nature of capacity and the adaptive management approach
    Manuals with laborious capacity assessment
    More geared for macro tasks
    UNDP (2007): Capacity Assessment Methodology:
    starting from Capacity assessment,
    then Desired future capacities,
    Capacity gap assessment,
    Work plan
    Mostly for sector-wide or governance areas
  • 24. Other approaches in developing capacity (ADB)
    ADB – Practical Guide to Capacity Development in Sector Context:
    Focuses on institutional change / reforms, and change management
    10 sections with tools for diagnosis, dialogue and planning
    Though the diagnosis and dialogue give good guidance, risk exists of over-analysis
  • 25. Other approaches in developing capacity (ADB)
  • 26. Balancing Soft and Hard investments: A way forward
    Main constraint to development is lack of institutional capacity  need major leap in institutional performance
    Fundamental decision: Positivist concept of development vs. constructivist concept:
    Planned mgmt vs. adaptive mgmt.
    What works best when?
    Flexible opportunistic approaches based on risk analysis and realistic objectives are probably best
    Short-term projects to support long-term program
    Projects prioritizing both capacity development and results are undermining effectiveness on both counts
    An opportunistic blend of H and S is probably best in short and long run
     Need stronger guidance framework & lessons
  • 27. “Soft investments”: A way forward in KCD
    We make advances on the diagnostics --
    need to understand better how KCD instruments work best, e.g.
    How to maintain engagement and facilitate change processes
    How to develop effective networks, formal and social ones
    How to make partnerships effective
    Tacit knowledge is more important than explicit knowledge  yet we know little about how tacit K works; and especially in developing countries education is geared to explicit K
    How to build on local K and endogenous capacity and preferences