- Working groups
- Civil society
- Technical cooperation
- Country systems capacity
- Enabling Environment
- Fragile situations
- Sector strategies
- Case stories
- Net search
Sector strategies: Evidence
- Executive summary
- Operational implications
- Messages for Busan
- Key resources
This Note has drawn on various sources obtained both through internet search, including the LenCD resource corner on sector approaches, as well as through key informants. Critical also has been the country level experience of the drafters and peer reviewers. While much has been written about sector content issues and increasingly on programme-based approaches and related aid modalities, there has been comparatively little written specifically on capacity development in a sector context. This paper has not therefore been able to benefit from an extensive on-going research base or policy discussions on the topic. Annex 1 provides a more complete bibliography of key written materials utilized.
Finding 1: Partner countries and donors are exploring ways to incorporate CD in sector plans and strategies - There are, however, few sector plans and strategies that address capacity development as an integral part of the plan/ strategy.
It is still rare to come across a sector strategy or plan that explicitly addresses capacity development. Ask sector managers if they have purposefully addressed capacity development in the formulation of their sector strategy, and it is likely the answer will be “not exactly”. Many will be unsure what in fact this should entail; an elaboration of staffing needs, a list of training workshops, a proposal to review organisational structures, or a procurement plan for tools and equipment? Staff of donor agencies might refer to pooled funds for technical cooperation that aim to align external support to a sector plan, but rarely to an explicit treatment of sector-wide capacity development challenges.
The situation is, however, changing, as donors and partner countries work together to better address issues of sector capacity within the framework of sector development plans and strategies. Partner countries are increasingly producing medium term sector development plans and budgets that specify sector outcomes and include a clear results framework. This is providing a more coherent basis around which external support can be harmonised and aligned.
The increasing use of programme-based approaches including SWAPs (see further below) is also helping to shift attention from individual project interventions to addressing broader sector needs. This also helps to reduce some of the de-capacitating effects of project fragmentation.
Having a sector development strategy in place is important in and of itself, and can provide a firmer base upon which to address sector CD concerns. However, explicit attention to CD is often absent. What tends to happen is that the sector strategy is used to negotiate external technical cooperation needs but without necessarily thinking through what the real CD challenges for the sector are. A number of external partners have begun to harmonise and align their technical cooperation support behind sector plans and budgets but not necessarily behind a clear analysis of the capacity situation, and formulated sector CD objectives. This can result in the following:
- In the absence of such formulations, responsibility for CD is abrogated to external partners who then guide and define the CD process. This risks undermining local ownership for CD, and can reinforce the perception that CD is something done by donors for country partners. As a consequence, sector stakeholders do not identify a clear role for themselves in leading the CD agenda. Moreover, the objectives of CD support provided by donors tend to respond to their own needs and priorities whether in terms of expediting implementation, risk mitigation or of addressing the needs of particular funding modalities such as sector budget support. The trend towards focusing CD support around planning, budgeting and public financial management can be seen as such a response.
- There is also a tendency is to regard external technical assistance from a gap-filling perspective. External resources and in particular TA are mobilised to fill the gap between actual and required capacity to meet sector objectives. The focus is then primarily on helping to implement sector objectives by mitigating risks, rather than on strengthening the capabilities of actors within the sector to achieve those objectives.
There are a number of examples of more deliberate efforts to integrate CD within sector development plans. As already noted, a key challenge is to ensure that CD is addressed as part and parcel of the plan or strategy preparation process and not as an afterthought, “bolted on” so to speak to address the gap between plan objectives and actual implementation capacity (see box below).
Box 2: Why it is important to treat CD as an integral part of a sector plan
Sector plans and strategies tend to focus on what is to be achieved in terms of outcomes and impacts and pay less attention to implementation and capacity issues - how things are to be achieved.
From the perspective of a results chain, sector plans (and indeed donor support) tend to look at the resource inputs required to meet sector outcomes (especially with SBS) missing out the critical element of translating inputs to outputs, which is where capacity needs to be taken account of.
The risk is that plans are prepared that simply cannot be implemented. This is why addressing capacity as part and parcel of sector planning is critical! It also helps to ensure that CD becomes institutionalised as part of the sector planning and budgeting process.
Capacity is thus not (another) “crosscutting” issue that has to be addressed as a matter of procedure after policy or programme targets have been identified. It is a core aspect that determines whether policies and programmes are unrealistic, whether they will end up producing only temporary and unsustainable results, or whether they reflect a healthy ambition level where it is feasible to balance growth in outcomes and capacity.
Inputs --> Sector Capacity --> Outputs --> Outcomes --> Impact
- In Cambodia, the Ministry of Education systematically assessed capacity development challenges related to each component and sub-component of its new education sector plan. This has resulted in specific paragraphs being dedicated to capacity needs and CD actions across the plan (FTI, 2008). While this is a promising development, it does not in itself guarantee that external support will be delivered in a more harmonised and aligned manner.
- In Rwanda, the government, together with donors have prepared a three-year Education National Institutional and Capacity Development Plan that is regarded as an integral part of a joint education sector support programme (JESS). In this case, a pooled fund provides funding for implementation of the CD plan, which is managed by the Ministry of Education (FTI, 2008).
- In Mali, the Ministry of Health has prepared a detailed national plan for human resources development that addresses all aspects of human resources management: pre and in-training, recruitment, career management and incentives for human resources for health (GoM, 2009).
- In Africa, NEPAD is initiating consultations with sector programmes it supports on ways to integrate capacity development more purposefully. This follows recognition of poor programme performance which has been attributed in large measure to an absence of any systematic attention to capacity development. NEPAD will use its recently launched Capacity Development Strategic Framework (CDSF), as entry point for exploring capacity issues. Guidelines will be developed to ensure purposeful attention to CD in future planning cycles.
- Countries applying for Global Fund financing now have the opportunity to include capacity development and system strengthening activities into their funding proposals. For example, applicants are encouraged to invest 5-10% of the grant budget into strengthening the M&E system but it is also at their liberty to request technical assistance or staff training. In their request, applicants are also expected to outline how the envisaged activities would strengthen the achievement of results.
Although the argument for integrating CD into sector plans and strategies may seem obvious if not self-evident, in practice doing so has proven to be quite challenging. This may be for a combination of reasons:
- Sector stakeholders may not regard capacity issues as a priority and there may be few incentives to give it the attention it deserves on top of day-to-day implementation concerns. Moreover, there remains a tendency to view capacity development in a more restricted sense as a training issue rather than as a more fundamental and strategic concern that is central to sector performance.
- Similarly sector experts working for donor agencies, concerned primarily with substantive sector policy issues, and under pressure to address immediate implementation needs, may not see longer-term capacity development as their priority.
- It is often difficult to know who should be responsible for providing leadership for capacity development at sector level. Typically, human resources and organisational issues are split between central agencies and units within a sector ministry, but these may not be sufficient if a sector-inclusive approach is desired that takes account of all actors within a sector, and that recognise the sector from a systems perspective (see further below).
- Capacity issues are complex and can be unwieldy, spanning the range of issues across often, complex sector systems; strengthening incentives to performance in and across individual organisations and units; enhancing competencies of individuals – in small groups or across professional specialisations. Approaches, tools, methods and processes cannot be the same across such a wide spectrum of challenges, nor can the role of donors and partners, respectively. Thus even though the sector provides a more focused intervention arena as compared to the national level, the challenges of CD can be daunting.
- While donors and partners may recognize the rationale for a “capacity-inclusive” approach, there are powerful incentives to focus on achieving quick and visible results, beyond what the existing capacity can deliver and beyond what CD support can promote in the short term. Climate change is an example: the funds currently envisaged for mitigation and adaptation in partner countries undoubtedly will easily surpass both current and “add-on” execution capacity, posing challenging dilemmas for donors and partners (Van Esch et al, 2010).
Recognising these various challenges to sector level CD work, efforts have been made by the international community and interested country partners to increase knowledge, facilitate learning and develop guidance around the practice of CD. For example, a number of donor agencies have sponsored learning events aimed at assisting sector stakeholders to better grasp the different dimensions of capacity affecting the performance of their sectors, and to prepare the ground for integrating CD into sector strategies.
- In Ethiopia, stakeholders in the transport sector were brought together to explore capacity challenges and to develop the outline of a CD sector plan. The workshop addressed ways to shift from what has been largely fragmented, supply driven capacity building support towards a more coherent, holistic approach that addresses both sector-wide issues and capacity building in individual organisations, in a sector with multiple national public and private actors, as well as multiple development partners (Boesen & Brand,2008).
- A similar exercise was conducted with Nepal’s education sector stakeholders, where a School Sector Reform Plan (SSRP) was recently launched. With the support of development partners, the Government of Nepal organised a five-day learning event for government officials and development partners from the education sector. The overall objective was to enable nationalstakeholders to prepare a sector-level capacity development framework with support as required from development partners. By July 2010 the MOE would develop a sector-wide framework for capacity development, based on which concerned agencies at various levels in the service delivery chain – including individual schools - will prepare annual implementation plans covering their own capacity development needs. The SSPR also calls for the establishment of a mechanism at the central level to co-ordinate and facilitate the preparation and implementation of capacity development plans down to the school level (training for Dev, 2009).
Both events demonstrated the real challenges of forging a common view with regard to capacity development strategy. It takes time to forge a consensus among different stakeholders over what constitutes a capacity challenge and the priorities to select. Disagreements were also encountered over how broadly to go, what to include and exclude, and where responsibility rests for taking the process forward. The challenge will be to find ways to mediate different points of view and develop an agenda for change that accommodates the interests and aspirations of both country partner and donor.
Various guidance notes on sector capacity development have/ are being prepared, as illustrated below:
- As earlier noted, NEPAD intends to prepare guidance on ways to integrate CD into sector programmes.
- EuropAID has in recent years developed specific guidance on supporting sector programmes and on addressing sector governance, both of which recognise capacity development as an integral part of any sector programme. These documents provide practical guidance on ensuring a CD perspective is taken in programme development and execution. Similar guidance has been prepared by the Asian Development Bank.
- Through the education Fast-Track Initiative (FTI), a task team of donors and country partners have developed guidelines for capacity development in the education sector. This includes step-by-step guidance for diagnosing capacity needs and for developing a CD intervention strategy.
- In the environment sector, UNDP developed, already some years ago, guidance on conducting capacity self-assessments for environment sector organisations. Under the auspices of the OECD/DAC, the Capacity Development in the Environment (CDE) programme has also produced guidance, which identifies capacity development as a key element for the management of environmental challenges and opportunities. In 2009 CDE produced a background document entitled: “Assessing Environmental Management Capacity: Towards A Common Reference Framework”, which builds on earlier guidance on capacity development in the environment sector, prepared as far back as 1994.
- In the health sector the Joint Assessment of National Health Plans and Strategies (JANS) developed by the IHP+ identifies assessment of capacity, and measures to build it, in key areas of the national health plans among the essential attributes for "sound national health strategies and plans". The JANS, because of its nature, does not make technical recommendations for addressing each area of capacity development where the analytical work that underpins the development of NHP has identified weaknesses. It however requires that National strategies and supporting documentation indicate what plans are in place for making progress towards achieving the needed level of capacity,including those beyond the narrow sectoral domain (IHP+ n.d.)
However, the real challenge remains for these to be used at country level. Concerns have been expressed that guidance produced by headquarters remains un-used, in some cases un-known and that a culture of “business as usual” prevails, with insufficient follow through on the part of headquarters to ensure that new practices are in fact adopted
The trend towards development of medium term sector development strategies offers an opportunity and an incentive to think about sector capacity development in a more strategic and purposeful way
Much greater effort is, however, required to ensure that CD issues are addressed as an integral part of any sector development strategy or plan
A CD strategy is more than a roadmap to define TC inputs, it should be at the heart of sector development, and define first and foremost what sector stakeholders will do to strengthen capacity
Developing a CD sector strategy is not easy. It requires recipient country leadership and needs to engage all sector stakeholders. At the same time it needs to avoid a sector narrow perspective and take account of capacity issues that go beyond the sector. It can benefit from facilitated discussions, learning events and knowledge sharing
Finding 2: The Aid Effectiveness Agenda is helping to raise the profile of sector capacity development by focusing on country ownership, systems and processes
Many of the provisions of the Paris Declaration, aimed at reforming donor behaviours and practices, can also help to promote partner capacity, simply by changing the way external assistance is delivered and managed. This is particularly the case in aid dependent countries, where the donor presence at sector level can be significant. In some cases, such changes in aid practices can contribute to enhancing partner capacity as significantly as any purposeful capacity development intervention. This is evident at the sector level where a number of donors are beginning to harmonise and align their financial and technical support behind sector strategies and systems.
- Aid that is better harmonised can help reduce the negative effects of excessive fragmentation, and in the process promote greater coherence and coordination, while reducing the perverse incentives associated with multiple uncoordinated projects, including topping-ups.
- Increased use of country systems can promote stronger sector ownership and accountability, as well as stimulate internal demand for system performance.
- Promotion of sector strategies helps reinforce local ownership for development results while creating an impetus for better alignment of external support and mutual accountability.
These actions may not be regarded, in the first instance, as capacity development measures, but their effect can be to legitimise and bolster sector-level policies, processes and systems and in so doing enable sector actors to better manage their own affairs, which is, after all, the prime aim of capacity development support.
A sector perspective forces both country partners and donors to confront rather than evade capacity deficiencies. Working with the system, and identifying ways to strengthen it then becomes the default – working outside the system, for reasons of expedience, becomes the exception rather than the rule. Capacity development is then key to sector development and to aid effectiveness. The following conclusions are drawn:
- Observance of the Paris Declaration principles supports the wider objective of capacity development, and can reduce the negative consequences of uncoordinated and fragmented aid.
- A focus on working through sector strategies, structures, systems and processes can help donors and country partners to identify capacity development priorities and to identify those areas where external support may be required.
- The specific Paris Declaration indicators on coordinated CD support and reduced use of parallel implementation units reinforces the wider commitment to working through country systems and aligning behind country priorities, and places a further premium on sectors articulating a CD strategy that goes beyond identification of external inputs.
- Even in situations where major CD may not be feasible or where a sector CD strategy is not available, harmonisation and elimination of distorting practices may in itself contribute to creating an enabling environment for subsequent CD efforts.
- At the same time, care is needed to avoid a narrow view of system capacity development that focuses exclusively on strengthening core functions such as planning and PFM, while overlooking equally important downstream front-line implementation capacity requirements.
- Observance of PD/ AAA principles can help to promote sector capacity by shifting donor and partner country practices and behaviours
- It can reduce many of the distortionary effects of fragmented aid, while the focus on working through country systems, places greater demand on local systems to perform. This needs to take account both of core functions such as planning and PFM as well as sector-specific front-line capacity challenges.
- It also creates an imperative to harmonise and align external CD support – however, the potential benefits of doing so can only be realised if a locally-prepared sector CD strategy is in place
Finding 3: Harmonisation and Alignment of Donor CD Support at Sector Level is still a work in progress
The extent to which specific donor support for CD at sector level is being harmonised and aligned behind sector strategies and systems varies substantially between countries, between sectors and between donors.
- As already noted, in the absence of specific sector CD strategies, external CD support even if harmonised and aligned, tends to be geared towards supporting immediate implementation of sector objectives or to respond to donors’ own priorities, rather than addressing underlying sector CD challenges (see box below).
Box 3: CD for Sector Performance or Aid Effectiveness?
There is presently a strong focus on aid modalities among donors, particularly on (sector) budget support. Despite all the development benefits derived from the harmonization and alignment agenda in general, the focus on getting the aid modalities right sometimes leads donors to see CD through the lenses of the choice of aid modality: CD support is defined with the purpose of making the aid modality effective and acceptable in terms of risks. This tends to put the cart before the horse, making the use of (sector) budget support an aim by itself. It risks diverting CD priorities from sector development challenges to aid effectiveness challenges. A particular effect of this trend may be the focus on important “upstream” capacity issues linked to planning, public financial management and procurement – but not paying sufficient attention to equally important front line implementation capacity issues and the realities on the ground that shape this capacity.
- While much technical cooperation provided at sector level is justified in terms of its contribution to capacity development, a considerable amount actually performs gap-filling/ implementation functions addressing shorter-term implementation and control/ risk management functions rather than longer-term sector CD.
- Progress in harmonising and aligning CD support tends to go hand-in-hand with progress in harmonisation and alignment of aid in general. However, there is a tendency for CD support – mainly in the form of technical cooperation - to lag behind financial assistance in terms of the degree of harmonisation and alignment. Thus while financial aid may be provided in the form of un-earmarked sector budget support, TC is separately earmarked and remains often under the control of the donor. Increasingly, however, pooled funds for TC, which may be managed either by the donors or partner country, or by both, sits side by side with sector budget support mechanisms (see box below).
Box 4: Steps in Harmonisation and Alignment of Sector CD support
The extent of harmonisation and alignment of external CD inputs can range from quite minimal to extensive/complete as summarised below:
- Sharing of information – at a minimum donors are encouraged to share information about their respective CD inputs, to identify ways of reducing fragmentation and to support partner efforts to improve sector coordination and coherence. Through working group arrangements, donors can on a voluntary basis, peer review technical cooperation proposals, conduct joint analytical work, including capacity assessments, evaluations, review CVs of proposed TA etc, even if they continue to supply support individually.
- “On plan” – where the country partner has formulated a coherent sector strategy or plan, whether with or without an explicit CD component, donors can at least ensure that whatever input is provided is aligned with sector objectives. Support is not necessarily fully harmonised but represents a step in the right direction. It is possible to combine various aid modalities that can complement one another, but it demands a high level of coordination on the part of the host institution.
- Pooled funds – Various donors have set up pooled funds for technical cooperation that combine the resources of various donors to address sector objectives. Depending on the degree of confidence in planning, budgeting and procurement systems of the partner, the pool fund can be managed by either a donor or partner or a combination of the two, and can be “on budget”. The advantage here is that funds are aligned to sector objectives, and are more closely harmonised. Pooled TC can still be coordinated together with non-pooled TC.
- Government led / sector budget support – where the partner has a coherent sector strategy in place and adequate PFM systems and public expenditure framework, then the final step is to use sector budget support providing full responsibility for management to the partner so that any CD support is “on plan” and “on budget”, subject to domestic accountability arrangements and managed by partner institutions. In this case, two possibilities exist – either provision for CD support is part and parcel of sector budget support or a component of the sector budget support is earmarked for CD. Dialogue and monitoring takes place around agreed performance indicators.
- Much technical cooperation continues to be provided and managed as discrete projects by donor agencies. Where such support is “on plan” even if “off budget”, there can be opportunities for synergy and complementarity building on the comparative advantages of different external partners and associated modalities. Even so, being “on plan” is no guarantee that support will not fragment unless adequate coordination arrangements are in place. But where it is “off plan”, then the risks of fragmentation are very real.
- There are concerns that aligning CD support fully within sector plans and budgets might reduce opportunities for innovation and experimentation. The argument is made to leave such spaces open provided they operate within an agreed country managed strategic framework and do not exacerbate problems associated with fragmentation (see further below).
Box 5:Balancing programmatic approaches with space for catalysing innovation and learning
In seeking to harmonise and align CD support behind country systems, care is needed to ensure that opportunities for innovation and learning are not lost. A niche role for donors can indeed be to create spaces as well as the flexibility needed to test out new modalities and techniques, which can eventually be taken to scale. The risk is that those opportunities are closed as funds are directed through government systems, which may be less able to accommodate such experiments. On the other hand, a “free for all” where donors run their own projects “off plan” and “off budget” is also a lost opportunity as the potentials for up-scaling and learning are lost while the risks of confusion, and undermining of agreed policy is increased. Innovation and learning should of course be approached as a joint responsibility between partners, and should preferably be carried out as part and parcel of a sector CD strategy, even if implemented through a project modality.
Such support can then usefully support and complement budget support arrangements by helping to feed policy with on the ground practice. Budget support can provide the necessary funding to enable going to scale, but it cannot provide the insights, which carefully designed projects are able to do. CSOs, think tanks and research organisations are often well placed to support innovation and learning, and in the process to challenge mainstream thinking.
In the Cambodian health sector for example, a number of agencies have been experimenting at sub-national level to test out alternative health funding and service delivery mechanisms at district level. These “projects” have offered opportunities for learning and innovation, and offer possibilities for scaling up and informing on-going discussions on health systems development. This has been made possible through the creation of health sector working groups and sub-groups and the existence of a health sector strategy, which includes an institutional development plan (Land, 2008).
- Programme-based approaches have tended to privilege government systems and processes and therefore, there has been a tendency for CD support to be directed towards strengthening government systems at the expense of other sector actors. However, current discussions on the role of non-state actors and decentralised government in the context of new aid modalities is helping to address this issue, as is the wider discussion on democratic ownership and multi-actor participation (see further sub-section 2.4. below).
- Evidence from various studies confirms that TC effectiveness is closely correlated with the level of partner’s practical ownership of and engagement in sector capacity development. The joint-donor study on TC effectiveness (Jica, 2008), prepared in advance of Accra, which commissioned a number of sector-level case studies, concluded that TC is most effective when:
- Integrated within a sector strategy and/or a country-led PBA/SWAP
- Informed by a comprehensive and phased CD strategy or plan, managed by country teams
- Complemented by other forms of support
- Adequate sector organizational capacity is in place to coordinate TC inputs particularly at local levels as demand for capacity improvement grows at district and community levels.
- There is a well-defined source of demand for organizational change, stemming from clients’ service dissatisfaction.
- There is willingness and capacity at political and managerial levels to lead and manage change.
- Harmonisation and alignment of technical cooperation tends to lag behind that of financial aid, and much TC continues to be donor-managed - but greater management responsibility (practical ownership) for CD is beginning to be given to country partners
- In the absence of local CD strategies, external CD support even if harmonized and aligned does not always address fundamental sector-wide CD challenges, and focuses instead on immediate implementation requirements
- Effectiveness of external CD support is contingent on local demand for CD and a willingness to drive the process. This places an emphasis on gauging the level of change readiness and practical ownership
Finding 4: A “governance” approach to sector capacity development avoids a “sector narrow” perspective and helps recognize the interests, contribution and interplay of different sector actors and stakeholders
As noted in the introduction, it is common for partner countries and donors to focus attention on the roles, interests and capacity needs of the line agency/ ministry responsible for a particular sector. This may be described as a “sector narrow” perspective.
A “governance” approach to sector CD helps avoid staying inside the “silo”, and to think carefully about the contribution other actors in and beyond the sector make to sector performance. In so doing, it can help to recognise the complex network of organisational stakeholders, both in the public sector, as well as across civil society and the private sector that contribute to sector performance, whether in terms of demanding, governing, overseeing, delivering, or accounting for a set of sector outputs and outcomes. This includes front-line service providers, other government departments and agencies including oversight institutions, local authorities and non-state actors.
The capacity of a sector to perform therefore involves far more than the capacity of the sector ministry, involving those actors and stakeholders that contribute to service delivery as well as those that participate in policy dialogue and accountability. The quality of the relationships that exist between these sector participants can be as important as their individual capacity and contribution. While in many countries, the government is the principal provider of services, and lead agency in terms of policy making, regulation and actual service delivery, there are many instances where non-state actors complement the role of the state as providers of services. In so doing, they are a major contributor to sector “capacity” (see box below).
Box 6: The Role of Churches in Education and Health Care Delivery
In PNG, churches have been providing about half of the country’s health services and – in partnership with government – have been co-managing some 40% of the primary and secondary education facilities. Churches also run two of the country’s six universities and are responsible for training many of the country’s teachers and health workers. In Africa, religious organisations have also played significant roles in education and health care provision. In Uganda for example, Lacor hospital in Northern Uganda, which began life as an isolated Catholic missionary hospital is today fully integrated into the Ugandan health system and is a leading provider of hospital based health care in the country. Key to its success has been a drive to develop a set of core organizational capabilities, as well as a willingness to interact with the wider health care system in terms of health systems development, and staff development (Baser et al, 2008)
Adopting a governance approach helps to highlight a number of strategic questions that need to be taken account of when preparing a sector CD strategy:
- Ownership and Change Readiness
- Whose capacity matters
- Joined Up Approaches
- Impact of Aid Modalities and Coherence of Donor Programming
Ownership and Change Readiness
Sectors are multi-stakeholder in character and the question “whose ownership matters” is of utmost importance. Often, sector CD work is addressed from a mainly technical point of view. However, CD is a form of change so addressing ownership needs to be tackled upfront. Ownership implies a commitment and willingness of sector stakeholders to engage in a change process.
Capacity development at the sector level is, therefore inherently political, affecting both organisational and individual interests and power relations.It requires change agents and leaders willing to guide the process, and to contend with resistance. It requires mobilizing stakeholder support and accommodating different points of view. Such leadership for change only emerges if there are sufficiently strong motives, and opportunities for change that outweigh the potential risks. These might includea clear policy framework to guide change, appropriate technical and financial resources to facilitate the change process, and demand-side pressures including expectations for performance improvement. Taking account of ownership and change readiness has implications for all actors:
- On the country partner side, it implies the need to build constituencies of support and to put in place an effective change management strategy that can see through the process. This includes scanning the environment to take account of enablers and constraints and determining what can be done in a given situation. This must be an integral part of any CD strategy. It also implies exercising leadership in discussions with external partners while remaining open to consideration of alternative strategies and approaches.
Box 7: The influence of context - capacity development for decentralized service delivery in Ethiopia and Pakistan
Two comparative case studies on capacity development for decentralized service delivery conducted in Ethiopia and Pakistan reveal the significance of contextual factors on the prospects for effective sector level capacity development.
- In the case of Ethiopia contextual factors were found to be generally favourable; a policy commitment to devolution; improved conditions within the public service especially at the local level and local accountability systems that worked. Communities were also making large contributions to education, creating strong ownership at community level.
- In Pakistan, contextual factors were found to be generally unfavourable. The bureaucracy was regarded as largely self-interested while representative democracy was dysfunctional in part because of collusion with the bureaucracy. Together, these posed formidable obstacles to improving performance.The government faced a real capacity building dilemma - an urgent need for effective and rapid development of capacities, but severe constraints on enhancing capacities to design and deliver programmes that could induce sustained behaviour change and more effective organisational performance.(Watson, 2006)
- For donors, it implies developing a greater sensitivity and awareness of the local context in order to understand how things work, judge what is feasible and what best approaches to follow. Joint sector capacity assessments or stakeholder analyses can help but of more importance is the need to engage in dialogue processes with sector stakeholders to build up relationships built on mutual trust, mutual accountability and respect, including an understanding of motives, incentives and constraints on both sides. In a multi-stakeholder environment, this requires playing a careful balancing act, maintaining a certain neutrality and creating space to broker engagement of different actors around a change process. It also means working with parliamentarians, organized social/economic groups; civil society. At the same time care is needed to avoid creating parallel lines of accountability and mechanisms for dialogue. Emphasis must be given to strengthening domestic policy processes rather than the narrow donor-government dialogue.
It also implies recognising the value of alternative change strategies. In situations of complexity, there can be value in pursuing more iterative strategies that start small and build on localised initiatives rather than going for grand-scale change processes, as illustrated in the box below.
Box 8:Organising for Large Scale System Change – the Case of ENACT in Jamaica
The Environmental Action (ENACT) Programme, a collaboration between Jamaica’s National Conservation Resources Agency and the Canadian International Development Agency, was mandated to work with Jamaican public, private and non-profit organisations to improve their capabilities to identify and solve national environmental problems. ENACT did not work in conventional ways to develop capacity, nor was it guided by a set of pre-conceived project activities. Instead it sought to respond to emerging demands and to reinforce existing initiatives driven by local organisations through a variety of means.
ENACT’s capacity development strategy combined four elements: a process approach based on responsive entrepreneurship, working across a wide spectrum of capacity development initiative, working with a wide variety of stakeholders and partners, and working at a variety of levels. The programme generated its effectiveness by achieving ‘fit’ both internally and with the conditions and demands of the surrounding environment. (Morgan, 2005)
- CD strategies at sector level need to be based on a thorough appreciation of stakeholders’ incentives for CD (UNDP, 2009, 2010). By implication, successful engagement in sector level change processes rarely comes about from a well-defined design alone but as a result of an on-going exchange and dialogue. This requires that both parties are willing to regard one another as legitimate partners, and to engage in a frank dialogue over intentions and strategies.
Whose capacity matters?
An inclusive sector approach requires that attention is given to the actual and potential capacity of all sector actors and stakeholders. It is not sufficient to review the core capabilities of the line ministry only. An assessment of constraints to sector performance would need to take account of the enabling environment for non-state actor participation including legal and regulatory provisions, mechanisms and processes as well as funding. It would need to identify specific organisational challenges that NSAs face in discharging their mandates or potential roles. It would be important to identify the actual or potential role that NSAs could play as sector capacity builders eg training teachers or health personnel, or participating in research and innovation. It should consider how far NSAs have an opportunity to engage with the state in discussing options and choices for sector capacity development as well as more broadly in the sector policy formulation and review process.
Joined up approaches
Sector performance and capacity can be facilitated or constrained by the policies, systems and processes of other parts of government. The impact of these can be significant although the scope for a sector to influence these may be quite limited. Of particular importance is the significance of major crosscutting or system-wide reforms.
- Therefore in thinking about sector capacity, there is need to take account of other central government reforms such as public financial management, and public service reforms including pay reform as well as other aspects of human resources management. Such reforms can have significant impact on sector performance, as well as on the willingness of donors to work within government systems.
- It is equally necessary to take account of and fully participate in any decentralisation reforms that may be taking place. These can have a major impact on sector performance whether in terms of policy formulation, service delivery or accountability arrangements, and often have the effect of transforming the role of central government agencies from implementers to coordinators. Decentralised service delivery is often regarded, by line ministries, as complicating service delivery arrangements and confusing lines of accountability. Particular challenges include managing the interface between vertical sector programmes and the role of sub-national government in financial and human resources management, and in planning and budgeting for service delivery.
Box 9: Beyond Sector Boundaries – Looking sideways and looking down
A study of the challenges of capacity development in the PNG health sector illustrates the virtue of joined up approaches. The study reveals the interplay of factors influencing sector capacity and performance. The case illustrates how the ability of individual organisations to develop their own capacity is determined in part by their relationships and the roles they play within complex networks and systems. For the National Department of Health, it needed to look both horizontally to take account of public sector wide influences and dysfunctions including HR and public financial management issues that impacted on the department. Equally it needed to take account of the new organic law on decentralisation, which had transferred significant implementation responsibilities to sub-national levels of government (Bolger et al, 2005).
- The recognition of the strong link between sector performance and the effectiveness of country systems which perform essential functions – such as planning, PFM, procurement, or monitoring and evaluation, including statistics – or other agencies that can contribute to sector outcomes through their own activities is raising attention on using a broader, country system approach to support capacity development at the sector level. Such approach calls for developing the capacities of country systems and other relevant agencies to mainstream key sector issues into their planning and implementation processes, in addition to support capacities of sector agencies. Ethiopia’s National Strategy for the Development of Statistics is one such example of a country-system reform process that recognizes the critical role to be played by sector stakeholders, in complementing the function of a central statistics agency in both building up a national statistics capability as well as contribute to sector-level performance (AfCop, 2010).
Impact of Aid Modalities and Coherence of Donor Programming
Donor practices can shape and influence patterns of sector governance, either helping to reinforce multi-actor participation or distorting relationships and opportunities. New aid modalities such as sector budget support or related forms of programme-based assistance can have recentralising tendencies as was earlier mentioned. Donors can have an important role to play in mitigating those risks by creating spaces for non-state actor participation in policy dialogue, implementation and monitoring and review. They also have a role to play in encouraging the development of sector CD strategies that are indeed multi-actor and that explore ways to reinforce mechanisms of consultation and engagement, as well as addressing the capacity development requirements of NSAs.
A key challenge for donors is to ensure coherence both within their own agencies and across donor agencies at country level. It is not unusual for a donor to separately fund sector programmes, central government reforms and decentralisation without ensuring policy coherence between these. Such practices can undermine country efforts to work in more joined up ways and makes it difficult to ensure a common approach to working with and through country systems. It requires that donors themselves have a clearer picture of the different elements of the system and the impact of their programmes on different parts of the system.
A governance approach helps recognize the role and contribution of all actors to sector performance and to ensure that CD support addresses the complete sector, thereby avoiding a sector-narrow approach
It can help reveal political aspects of sector capacity development including patterns of ownership, as well as the drivers of and impediments to change
Particular attention needs to be paid to the role of sub-national government and non-state actors in the delivery of sector goods and services and to their rights and responsibilities in the policy formulation and accountability chain
Sector agencies form part of a more complex public service system and attention also needs to be given of the impact of that wider system on sector performance. This demands more joined up approaches both on the part of domestic stakeholders as well as within/across development partners
Context matters, and what can be achieved varies from country to country and context to context. Fragile countries present particular challenges for sector development, where pre-conditions for effective external support are less likely to be in place
 The guidelines recently prepared by the EC on Sector Governanceelaborate on approaches and techniques for exploring the contribution of different sector actors and stakeholders.