Sector strategies: Introduction


In November 2011, the global community will meet in Busan, South Korea, to review progress on implementation of the Paris Declaration and Accra Agenda for Action. Through the Working Party on Aid Effectiveness (WP-EFF), preparations are under way to take stock of progress made by donors and partner countries in implementation of joint commitments.

The OECD/DAC definition of capacity and capacity development is adopted as a default: Capacity is the ability of people, organisations and society as a whole to manage their affairs successfully. Capacity development is the process whereby people, organisations and society as a whole unleash, strengthen, create, adapt and maintain capacity over time. 

These definitions remain quite general and call for further precision in order to be operationally useful (see box).

Box 1: Discussing Capacity Development

Different organisations and institutional networks view capacity development in a variety of ways, for example:

  • UNDP concentrates on four strategic priorities: institutional arrangements and incentives, leadership, knowledge and accountability.
  • NEPAD’s Capacity Development Strategic Framework has six cornerstones: leadership transformation; citizen transformation; knowledge and innovation; using African potential, skills, and resources; capacity of capacity builders; integrated planning and implementation.
  • The ECDPM capacity study distinguishes five core capabilities: to commit and engage; to carry out technical, service delivery and logistical tasks; to relate and attract resources and support; to adapt and self-renew; and to balance coherence and diversity.
  • The Accra Agenda for Action’s strategic priorities are: civil society and private sector engagement, country systems, enabling environments and incentives, capacity development in fragile situations, integrating capacity development in national and sector strategies, relevance, quality, and choice of capacity development support.

It is difficult to discuss “capacity development” without first determining what kind of capacity is needed and what it should look like in operation.  Without this clarity, discussions on capacity development tend to become general exchanges on what makes for good development practice.  Regardless of which of these or other approaches is used, it is critical for practitioners to understand what they are seeking in terms of capacity and to use this as the basis for identifying activities which will help to encourage its development, rather than assuming that certain mechanisms will automatically enhance capacity.

This series of Perspective Notes was prepared by a professional drafting team assembled by the OECD/DAC and LenCD. The team included James Hradsky, Nils Boesen, Anthony Land, Heather Baser, Silvia Guizzardi and Mia Sorgenfrei. Anthony Land led in drafting this Perspectives Note on Sector Capacity Development, which subsequently benefitted from comments from the rest of the team, from peer review by Abby Riddell, and a wider electronic vetting process through the LenCD global network. All comments from those involved that have helped contribute to a sound paper are acknowledged with thanks.

These Perspectives Notes do not reflect an official position of either the OECD/DAC or LenCD. The many contributors may not endorse every viewpoint in the note and they bear no responsibility for any remaining errors or omissions.


This Perspectives Note discusses opportunities for and challenges of capacity development in a sector context. Departing from the aid effectiveness agenda and recommendations for action contained in the Paris Declaration and Accra Agenda for Action, it considers the progress that has been made by partner countries and donors to integrate capacity development at the sector level.

In focusing on sectors, the Note deliberately attempts to examine the challenges of capacity development in sectors from an endogenous vantage point. Sectors are thus regarded first and foremost as frameworks for organizing the design and implementation of domestic development policies, rather than as instruments for structuring the delivery of aid. This then is not primarily a discussion of programme-based approaches or related aid modalities, such as sector budget support. However, the endogenous perspective is used to consider how external support for capacity development at sector level can be effectively provided, as an adjunct to locally driven processes.  

What is a “sector”?

There is no official definition of a sector. It is generally understood as encompassing a discrete domain of development policy, institutions, actors, stakeholders and resources, such as transport, education, health, or agriculture. Some sectors, such as the environment are inherently multi-sector in nature. In fact, most sectors are composed of sub-sectors and depend on other sectors to achieve desired policy outcomes. Sectors are sometimes defined in terms of developmental themes such as gender, poverty or even capacity development, and decentralisation. In this sense, it is convenient to link this analysis to the related concept of “country systems”, as CD conclusions for both are similar. From a donor perspective, most aid-supported country system improvements (public financial management; procurement; statistics; evaluation) are addressed as if they were effectively “sectors” of intervention.

Government bureaucracies, ministerial portfolios and associated planning and budgeting frameworks are typically structured around sectors, likewise development objectives are usually defined in sector terms. While it is useful to use the structure of government to define a sector, a more holistic view is required that takes account of all actors and stakeholders involved in sector affairs. A multi-actor/stakeholder perspective recognises the contribution of different groups to sector performance. Thus, while a government department may have formal responsibility for setting and implementing sector policy, other government agencies, as well as non-state actors (NGOs, private sector, research institutes, community groups etc.) form a complex of actors and stakeholders that constitute a sector.  The character of, and development challenges associated with sectors differ vastly, and so too therefore, the capacity challenges that arise. 

Sectors and capacity development

Capacity development should be regarded as an integral part of any sector plan or strategy. It cannot be treated as an annex, or after-thought that is dealt with once sector policies, programmes and results frameworks have been developed. Any sector plan or strategy should consider existing sector capacity as a point of departure. Ideally, it should include provisions to ensure that appropriate capacity is in place to enable implementation of sector objectives as well as to ensure that the sector is able to both adapt and respond to a changing context and to future needs. Capacity development should therefore be at the heart of sector development; capacity for policy making, for public financial management, for front-line delivery, for interaction and co-ordination between multiple state and non-state stakeholders, monitoring, etc.

The sector, which sits between the national level (macro perspective) and the community / project level (micro perspective) offers a practical arena for applying capacity development good practice principles. Indeed, it is where most of the challenges and dimensions of capacity development, discussed in the other perspectives papers, come together.

What the Paris Declaration and Accra Agenda for Action say about CD in sectors

“Developing countries will systematically identify areas where there is a need to strengthen the capacity to perform and deliver services at all levels – national, sub-national, sectoral, and thematic – and design strategies to address them” (AAA 2008).

Both the Paris Declaration (PD) and Accra Agenda for Action (AAA) implicitly regard the sector as a key entry point for organising capacity development support and for implementing the aid effectiveness agenda. The sector offers opportunities to:

  • Promote the development of locally prepared development plans and strategies that enjoy ownership among sector stakeholders
  • Encourage the development and use of country systems (planning, budgeting, monitoring, service delivery etc.) and in so doing reduce the use of parallel implementation units (PIUs) and technical assistance personnel
  • Harmonise external support for capacity development and align behind plans and strategies that focus on enhancing overall sector performance rather than meeting the implementation requirements of discrete donor-funded projects
  • Define results, including those for capacity development, in terms of overall sector objectives, and promote domestic accountability  

Working at the sector level can help shift the focus of attention away from discrete project interventions that are disconnected from wider sector objectives and systems. In so doing it encourages the use of programme-based approaches including Sector-Wide Approaches (SWAPS) that are more strategic in nature and which facilitate greater coherence and coordination.  In relation to aid, working at the sector level allows the use of a mix of complementary aid modalities, from fully aligned, un-targeted budget support to project funding which can, when “on budget” and “on plan”, serve for experimenting, temporary by-passing of bottlenecks and support to non-state partners.

The sector approach makes development challenges relatively manageable. It allows attention to details which national level approaches cannot handle or afford, while keeping a holistic perspective that is easily lost in project-type, narrowly localized interventions.  It is easier to monitor progress at sector level, and easier to learn from experiences. In addition lessons learned at sector level can have a larger impact compared to project results. 

Potential pitfalls and limitations of working through sectors

While the advantages of working at the sector level are clear, there are also pitfalls and limitations, which need to be kept in mind when addressing sector capacity development. 

  • Most serious is the “silo” trap, where inadequate account is taken of the interactions and interdependencies that exist between sectors, as well as broader public sector wide constraints that impact on sector performance.
  • An increasing number of development challenges demand cross-sector responses and cannot be defined simply in sector terms. The environment is the most obvious as indeed issues related to climate change, trade and poverty more generally.
  • There is a tendency to associate sectors with sector ministries and to structure support around their mandated roles and responsibilities. Often, this comes at the expense of other critical actors and stakeholders including sub-national governments and non-state actors, who can be disempowered.
  • Sectors can sometimes be a too large a unit to deal with meaningfully and really need to be broken down into sub-sector components to be operational. The health and agriculture sectors are two such examples.

The approach to sector work has often been excessively technocratic and formal, based on the assumption that formal policies, plans and indicators combined with financial resources can translate into efficient and effective implementation. The key actors have either not had or brought into play their understanding of the drivers and inhibitors of sector development, including those related to politics, norms and values and the informal mechanisms, which are active behind the fa├žade.