Human and Institutional Capacity Development:

1. Human and Institutional CapacityDevelopment: Challenges Implementing Performance Improvement in Developing Country Public Sector Ministries.

2. Overview of Presentation • USAID is implementing HICD with an adapted ISPI approach. • What are the challenges of implementing approach given: • The Paris Declaration on AID Effectiveness. • The Bruntland Report and current emphasis on sustainability. • The current donor emphasis on capacity development. • Critique of donor approaches to capacity development and institution building. • Problem-Driven Iterative Adaptation Approach by Matt Andrews at Harvard’s Kennedy School. • What do developments in foreign aid, donor-recipient relationships, capacity building experience, and critique’s of donor approaches mean for applying ISPI’s approach to performance improvement. • What is the role of the consultant? • Discuss our experiences and our lessons learned.

3. Challenges of Capacity Development • Capability traps: Countries appear to make reforms but these are superficial and serve to attract donor funding not change the way they do business. • Capability traps emerge under specific conditions which yield interventions that (a) aim to reproduce particular external solutions considered ‘best practice’ in dominant agendas, (b) through pre-determined linear processes, (c) that inform tight monitoring of inputs and compliance to ‘the plan’, and (d) are driven from the top down, assuming that implementation largely happens by edict • The Limits of Institutional Reform in Development: Changing Rules for Realistic Solutions by Matt Andrews, Kennedy School, Harvard University

4. HICD Practiced since the Marshall Plan. • Capacity Building, Capacity Development, Institution Strengthening, Organization Development, and Human Capacity Building has been part of the international development since the Marshall Plan. • Much debate about the meaning of “institution” versus “organization” and about the meaning of “capacity” and how to measure it. • Early approaches modeled institutions in the developing world on Western institutions via a partnering model with Technical Advisors working in the institutions. • NGO development and emphasis on developing organizations so that they would be grant-worthy. • Renewed interest after the Paris Declaration and the Accra Accord and after USAID/Forward

5. Approaches to HICD 1960 - 2005 • 1960’s: Institutional building. Help design and establish functioning public sector institutions, focusing on individual institutions and using models transplanted from the North. Long-term training in northern universities resulting in “brain drain.” • 1960’s – 1970’s: Institutional strengthening/development. Shift to strengthening by providing tools to improve performance rather than establishing still focusing on individual organizations. Training in the North. • 1970s: Development management/administration. Reach neglected target groups and improve delivery systems and public programs to reach target groups.

6. Approaches to HICD 1960-2005 • 1970s – 1980s: Human resource development. Development is about people and need to focus on education, health, and population above all. People-centered development emerges as a concept. • Schumacher’s “Small is Beautiful: A Study of Economics as if People Mattered”(1973) established the appropriate technology movement thought to better empower people in the Third World. • Energy crisis and emergence of globalization. • U.S. Private Voluntary Organizations (PVOs) became important actors in development.

7. Approaches to HICD 1960 – 2005 • 1980’s – 1990’s: New Institutionalism. Structural adjustment, policy reform, governance paradigm. Capacity building broadened to sector level (government, NGOs, private). New focus on networks. More attention to external environment and national economic behavior and shift from project to program focus. Concern with sustainability of capacity building efforts. • 1983: World Bank published a highly influential report written by economist Elliot Berg titled Accelerated Development in Sub-Saharan Africa. Berg argued that “in few areas of policy are the costs of inaction more far reaching…Almost everyone acknowledge the ineffectiveness of technical cooperation in what is and ought to be its major objective: achievement of greater self-reliance in the recipient countries by building institutions and strengthening local capacities in national economic management.”

8. The Bruntland Report: Our Common Future 1987 • UN World Commission on Environment and Development (WCED) Report published a comprehensive report highlighting the need for sustainability development. • Sustainable Development means meeting the needs of the present without compromising the ability future generations to meet their own needs. • Focused on population, human resources development, food security, energy, urbanization, industry, and managing common resources. • Led to the series of Environmental Meetings Rio+ 1 - 20.

9. Approaches to HICD 1960 - 2005 • 1990s: Capacity development. Reassessment of technical cooperation and beginning of donor discussions on capacity building. Coalescing of different ideas around capacity building and emergence of local ownership. Participatory approaches seen as key. Short term participant training, sometimes en masse, as in Russia and Central and Eastern Europe. Privatization. Victory of Capitalism. • 1992: UN Earth Charter: Outlines a just, sustainable and peaceful society for the 21st Century. • Agenda 21: Action Plan for sustainable development.

10. Approaches to HICD 1960 to 2005 • 2000s: Capacity development/Knowledge networks. Millennium Development Goals became key driver. • Increased participation in capacity building. • Spread of ICT-based knowledge networks. • Emphasis on ongoing learning and adaptation. • Systems approaches and emerging talk of complex systems. • Balancing results-based management and long-term sustainability. • More emphasis on needs assessment/analysis and donor coordination and long-term donor investments. • ”.

11. Approaches to HICD 1960 - 2005 • 2001 Universal Declaration on Cultural Diversity:  "... cultural diversity is as necessary for humankind as biodiversity is for nature”; it becomes “one of the roots of development understood not simply in terms of economic growth, but also as a means to achieve a more satisfactory intellectual, emotional, moral and spiritual existence. • After 9/11: Democratization becomes major focus and is part of the U.S. National Security Strategy.

12. Millennium Challenge Goals 2000 – 2015 • Commitment made by 189 Nations to achieve by 2015: • Eradicatingextreme poverty and hunger, • Achieving universal primary education, • Promoting gender equality and empowering women, • Reducing child mortality rates, • Improving maternal health, • Combating HIV/AIDS, malaria, and other diseases, • Ensuring environmental sustainability, and • Developing a global partnership for development. • In 2005, G8 (Canada, France, Germany, Italy, Japan, Russia, the United Kingdom, and the United States) accelerated funding.

13. HICD since 2005 • Donors Issued Policies and Approaches to HICD for country-led development. • USAID issued HICD Handbook in 2010. • Focus on Democratization, Basic Education, Health reform and addressing challenges of HIV/AIDs, TB, and other major diseases. • Fpcus on Sector Development, Evidence-Based programming, indicators, M&E.

14. UN Statement Regarding Need for Capacity Development 2003 • Capacity building required to attain the Millennium Challenge Goals is linked to national ownership because only if there is adequate domestic capacity can those development objectives be achieved and remain sustainable. If domestic capacity is not adequate that national ownership is just not possible or is only apparent. Development processes cannot be owned if there are not enough capacities at the national level to conceive, design, formulate, implement, monitor, and evaluate development policies and the corresponding operational activities (programs and projects).

15. Rome Declaration on Harmonization 2003 • First High-Level Forum on Aid Effectiveness. • Donors and developing countries agreed that the latter should lead their own development efforts and that donors should focus on building their capacity. • Key elements are country-based strategies, reliance on local systems and processes, and coordination with civil society and the private sector.

16. Paris Declaration of Aid Effectiveness 2005 • 100 Countries, including the U.S. agreed to emphasize: • Ownership: Developing countries commit to lead their own development and donors commit to respect the countries’ leads. • Alignment: Donors commit to supporting the developing countries national development strategies, institutions, and procedures; to collaborative planning; and to use countries’ systems. • Harmonization: Donors agree to work together to harmonize their development strategies. • Managing Results: Donors and developing countries agree to manage development for measurable results. • Mutual Accountability: Donors and partners are mutually accountable for achieving results and for working transparently.

17. Accra Agenda for Action 2008 • Donors and developing countries met again and determined that progress toward implementation of the Paris Declaration was insufficient and recommitted to its principles. They emphasized that: • 1. Country ownership is key. • 2. That they needed to Build more effective and inclusive partnerships. • 3. That achieving development results – and openly accounting for them – must be at the heart of all we do.

18. Capacity Development from Accra Agenda for Action 2008 • Capacity development in the context of national, sector, and thematic strategies. • Country systems: assessing, strengthening and promoting the use of country systems. • Enabling environment. • Technical co-operation demand driven • Civil society and private sector role. • Fragile situations: tailoring, phasing and coordinating capacity building and development.

19. Towards Effective and Inclusive Development Partnerships Bogota 2010 • High level event on South-South Cooperation (SSC) and capacity building. • Established goal to achieve Accra Accord objectives relying more on SSC. • Emphasized importance of SSC along with North-South Cooperation. • Emphasized developing countries’ lead in their development efforts.

20. Partnership for Effectiveness Development Cooperation Busan 2011 • Drafted first framework for development cooperation that embraces traditional donors, South-South cooperators, BRICS (Brazil, Russia, India, China, South Africa), civil society organizations, and private funders.

21. Rio + 20 in 2012: The Future We All Want • Put the world on a new path. • Go beyond economic growth as the only measure of progress. • Social inclusion, economic growth, and a clean and secure environment go hand in hand. • Meeting the needs of today and assuring that we meet those of generations to come. • Equal opportunity, safe drinking food, equality for all, sufficient food, quality health care, education, access to energy for all. • Post-2015 sustainable development agenda.

22. Human Development Report 2013 • Rise of the South and human progress and shift in Global Dynamics. • Brazil, China, and India are producing nearly the same output as Europe and North America and by 2020 they will surpass those traditional industrial powers. • By 2030, 80% of the world’s middle class will live in the South. • Shaking up traditional global institutions, producing new ones, and establishing new forms of South-South collaboration • Three drivers of development: (1) proactive developmental state; (2) tapping global markets; and (3) determined social policies. • Poverty reduction, women’s empowerment, and technology have contributed to the change. • Need to expand employment and education and deal with climate change and sustainability.

23. OECD DAC Statement • Until recently, capacity development was viewed mainly as a technical process, involving the simple transfer of knowledge or organizational models from North to South. Not enough thought was given to the broader political and social context within which capacity development efforts take place. This led to an overemphasis on what were seen as “right answers” as opposed to approaches that best fit the country circumstances and the needs of the particular situation. For related reasons, there was insufficient appreciation of the importance of country awareness of capacity development initiatives. Capacity development is a necessarily endogenous process, strongly led from within the country, with donors playing a supporting role. The Challenge of Capacity Development: Working Towards Good Practice, OECD, 2006

24. OECD DAC Definition of Capacity Development 2006 • Capacity is not only about skills and procedures; it is also about incentives and governance. • Capacity: The ability of people, organizations, and society as a whole to manage their affairs successfully. • Capacity Development: The process whereby people, organizations, and society as a whole unleash, strengthen, create, adapt, and maintain capacity over time. • Capacity development denotes country-owned and country-led development and change processes.

25. OECD DAC Three Tier Approach • Enabling Environment: • Organizational Level: • Individual Level: • Need to understand the international and country contexts • Need to identify and support sources of country-owned change. • Need to deliver support • Need to learn from experience and share lessons.

26. UN Definition of Capacity Development • Capacity development is the process through which individuals, organizations, and societies obtain, strengthen, and maintain the capabilities to set and achieve their own development objectives over time. • Capacity is “the ability of individuals, institutions, and societies to perform functions, solve problems, and set and achieve objectives in a sustainable manner.” • Capacity development is the how of making development work better and is about making institutions better able to deliver and promote human development.

27. UN Three Levels of Capacity Development • The individual level - For societies and organizations to transform and grow, they need individuals with skills, knowledge and experience. • At the individual level capacity development takes place through demand-driven processes of learning and knowledge acquisition and sharing, experiencing, participation in communities of practice, south-south learning initiatives, on-the-job training, mentoring and coaching and other learning techniques that empower and place the individual in a central and active position. • This new approach to capacity development moves away from the traditional technical assistance, mostly based on supply-driven technical training and workshops.

28. UN Three Levels of Capacity Development • The organizational/institutional level - As individuals make up the tissues of organizations and institutions, the sharing of skills, knowledge, experience and values amongst individuals belonging to a group or organization translates, over time, into the very organization’s capacity, consisting of procedures, systems, policies and culture. • However, while the collective set of capacities of individuals ultimately translates into the organizational and institutional capacity, the latter by far exceeds the sum of the capacities of their members. • Developing organizations or institutions’ capacity means fostering change within their complex system of policies, systems, procedures, regulations and organizational culture; a process, the latter, which is endogenous and voluntary, fully owned and controlled by the organizations and institutions that are undertaking change.

29. Horizontal Capacity Development • The capacity to engage with stakeholders and create consensus around a policy, a bill or a plan; the capacity to articulate the mandate of a new institution or to vision the trajectory of an organization or even a society; the capacity to develop a strategy, translate it into a plan and prepare a budget; the capacity to implement a program or a policy and the capacity to monitor its implementation and evaluate results are all fundamental capacities that organizations, institutions and societies need in order to be effective and function well. • These capacities transcend sectors and unit size; they are common to ministries of education and ministries of environment and natural resources, parliaments and human right commissions, small local government units and offices of the auditor general alike.

30. UN Three Levels of Capacity Development • The societal level - This third level has been long neglected in development theory and considered an externality to the capacity development process, which has traditionally focused on the individual and the organizational level. • Transformation and change that happens at the societal level overhauls and, at the same time, is driven by that which takes place within individuals and organizations that make that society. • In turn, the values system of a society, its customs, body of laws and policies, the system of governance are all elements that impinge on the ability of individuals and organizations to develop further their capacity and transform. • Change in capacity at the societal level is a long process, which is difficult to control and steer; however, it is not to be considered an externality or a variable that cannot be controlled for.

31. UNDP Capacity Measurement Framework • Impact: Change in people’s well-being – Country Development Goals • Outcome: Change in institutional performance, stability, and adaptability of National Institutions. Institutions that can formulate effective policies, that can deliver services efficiently, that can sustain a high level of performance over time, and that can weather shocks, external and internal make the most significant contribution to human development. • Output: Product produced or service provided based on capacity development core issues (institutional arrangements, leadership, knowledge, and accountability).

32. UNDP Capacity Measurement Framework • Measuring Institutional Performance: • Effectiveness: The degree to which the institution’s objectives are achieved. • Efficiency: A comparison of what is produced or achieved and resources used (money, time, labor, etc.). • Measuring Institutional Stability • Institutionalization of performance standards decreases volatility and unpredictability of resource utilization. • Risk mitigation for risks such as corruption, lack of stakeholder or public participation, natural and human-made threats or disruptions such as funds, fraud, political interference, external supply disruptions, etc.

33. UNDP Capacity Measurement Framework • Measuring Institutional Adaptability: • Investments in Innovation: seek leading edge changes to policies, processes, practices, and behavior that will lead to better performance that is sustainable over time. • Continuous Improvement to adapt to new needs, standards, and environments. Need built-in mechanism for continuous improvement such that an institution’s effectiveness and efficiency are examined, redefined, and realigned continuously in response to changing realities.

34. World Bank Capacity Development Results Framework (CDRF) • Capacity for Development: the availability of resources and the efficiency and effectiveness with which societies deploy those resources to identify and pursue their development goals on a sustainable basis. • Capacity Development: a locally driven process of learning by leaders, coalitions, and other agents of change that brings about changes in sociopolitical, policy-related, and organizational factors to enhance local ownership for and the effectiveness and efficiency of efforts to achieve a development goal

35. World Bank CDFR • Objective is to design and implement transformational learning interventions to bring about locally owned changes in sociopolitical, policy-related, and organizational factors to advance particular development goals. • Individuals and groups of individuals are seen as agents of change who act on these sociopolitical, policy-related, and organizational factors. • Different instruments can support the changes processes: policy-based loans, investment projects, analytical studies, impact and other evaluations, technical assistance, and training. • Key is to design and implement the embedded learning interventions strategically to engage with and help drive local change processes.

36. Standard Set of CDRF Indicators • The conduciveness of the sociopolitical environment to achievement of the goals. • The efficiency of the policy instruments and other formal means by which the society guides action to achieve the goals. • The effectiveness of the organizational arrangements that stakeholder in government and outside government adopt to achieve the goals.

37. CDRF Structure to Connect Programs to Observable Results • Clearly specified development goal or set of goals that motivate the capacity development effort. • Three capacity factors that determine the extent of local ownership: • Conduciveness of the sociopolitical environment • Efficiency of policy instruments • Effectiveness of the organizational arrangement • A change process that leads to improvements in the targeted capacity factors at the hands of agents of change empowered through learning. • Activities and instruments designed to achieve the necessary learning outcomes for the agents of change.

38. USAID Capacity Development • HICD is a USAID model of structured and integrated processes designed to identify root causes of performance gaps in host country partner institutions address those gaps through a wide array of performance solutions in the context of all human performance factors, and enable cyclical processes of continuous performance improvement through the establishment of performance monitoring systems.

39. USAID Approach to Capacity Development • Approach Adapted from Human Performance Technology.A systematic combination of three fundamental processes: performance analysis, cause analysis, and intervention selection, and can be applied to individuals, small groups, and large organizations • Employs a systems approach and organizations as interconnected complex of functionally related components. The effectiveness of each unit depends on how it fits into the whole and the effectiveness of the whole depends on the way each unit functions. • A systems approach considers the larger environment that impacts processes and other work. The environment includes inputs, but more importantly, it includes pressures, expectations, constraints, and consequences.

40. USAID Approach to Capacity Development • Employs a systematic methodology that describes the desired performance state and compares it to the organization’s current performance in a specified are, defining and quantifying the performance gap between the two. The gap is then analyzed from the perspective of six primary factors that affect performance to arrive at recommendations for performance solutions to close the gap. • Since the goal of HICD is to produce performance improvement results, performance measures must be established for all levels of performance within the organization and constantly monitored to ensure that the organization’s work is successful. • HICD promotes the integration of performance scorecards into its activity designs that enable organizations to establish benchmarks for current performance and institute a continuous performance improvement cycle by monitoring performance through the measures established in the scorecard

41. USAID Approach

42. Problem-Driven Iterative Adaptation Approach (PDIA) Four Core Principles: • (1) Focuses on solving locally nominated and defined problems in performance instead of transplanting preconceived and best practice solutions.(2) It seeks to create an authorizing environment for decision-making that encourages positive deviance and experimentation as opposed to designing projects and expecting stakeholders to implement as designed. • (3) It imbeds this experimentation in tight feedback loops that facilitate rapid experiential learning as opposed to ex-post learning. • (4) It actively engages broad sets of agents to ensure that reforms are viable, legitimate, relevant, and supportable.

43. Seven Levels/Factors • (1) Ecological • (2) Societal • (3) Institutional • (4) Public and private sector environment and linkages between organizations • (5) Organizational • (6) Individual • (7) Material

44. Seven Levels/Factors • (1) Ecological Ecosystem and Environmental Interaction • (2) Societal Factors: include the structure and functioning of the nation-state and its form of government; the decision making authority of the executive, legislative, and judicial branches; the laws related to the structure and functioning of government and non-government organizations and the private sector; natural and human resources; social and ethnic structures; education structure and level; demographic changes; economic, political, and social status of the population, including health; the country’s role in geopolitics, global trade and investment regimes, as well as migration, and urbanization; the performance of organizations with whom the target organization interacts; among others.

45. Seven Levels/Factors • (3) Institutional: denotes “resilient social structures formed by norms and regulations which provide solidity and meaning to social life” (European Union, 2005, p. 12). Institutions can be formal or informal and include such factors as norms for exertion of power and authority, norms for acceptable actions of government authorities; status and rank of individuals with public authority; norms governing reciprocity in exchanges such as favors and gifts; norms regarding how official laws and rules are used in comparison to informal sets of rules; among others.

46. Seven Levels/Factors • (4) The public or private sector environment and linkages between organizations include the specific laws, regulations and policies relating to either public or private for-profit and not-for-profit organizations; the civil service system; the hiring procedures; budgetary support and availability of loans and grants; and how the networks between organizations function, and the nature of formal and informal interactions among them.

47. Seven Levels/Factors • (5) The organizational level includes such systems and processes as: the conceptual framework and understanding of its relationship to the world; vision, mission, values, goals, and strategies; quality and dynamism of the leadership; management structure; financial viability; financial and resource management systems; management information systems; logistics management; roles and responsibilities of work groups and individuals; management practices; gender issues; human resource management systems; incentive systems; monitoring and evaluation systems; information about key personnel; communication systems and work flows; informal relationships, communication, and information sharing between staff; delegation of responsibility; relationship with satellite offices, service delivery systems, other organizations both working together or competitively in the sector, and government organizations.

48. Seven Levels/Factors • (6) The individual level includes such factors as relevant knowledge, skills, and abilities; personal interests and agendas; connections with elites, social classes, or ethnic groups; motivation and commitment; access to information; communication; leadership; internal politics; and others. All of these factors can impact human and institutional capacity and their development and can also impact whether or not the intended donor program will have its anticipated impact. • (7) The material resources level includes such things as finances, equipment, work space, and so on.

49. Consultant’s Role • How to help organization define what changes it wants to make. • Reconcile the organization’s perspective with the donor’s. • Help to conduct the analysis to present before the organization’s stakeholder group. • Consultant needs to understand the perspective of the organization and “see” reality in the same way that key stakeholders do. Is this possible? • Select an appropriate participatory approach.

50. Possible Steps Consultant Can Take • Step One: Understand the Development Context and the Donor Strategy • Step Two: Agree upon HICD Approach and Team. • Step Three: Understand the Objectives and Approach of Other Donors Working with the Organization. • Determine Organizational Champions, Change Agents, and Stakeholder Group and their desired changes. • Draw Preliminary Map of Organizational Ecosystem and seven levels/Factors. • Develop an Action Plan in Collaboration with the organization’s stakeholders. • Implement the Action Plan and Revise as Feedback Informs and Challenges Arise.