Capacity building is best understood within the context of sustainable development. However, like sustainable development, the concept variously referred to as "capacity building" or "capacity development" is broad, and therefore difficult to define with precision.
The term still creates the sort of confusion that comes with a catchall phrase that attempts to encapsulate an approach intended to reorient human activities toward approaches that maintain environmental integrity, improve economic and social justice, and allow cultural affirmation. Basic questions that flow from efforts to build capacity are: (1) What is to be built or developed? (2) Who does the building or developing? (3) How is it done? (4) Where is it done? (5) Why is it done?
The United Nations Development Programme has described capacity building as a process to nurture, enhance, and utilize the skills and capabilities of individuals, groups, organizations, institutions, and societies to: "(1) perform core functions, solve problems, define and achieve objectives; and (2) understand and deal with their development needs in a broad context and in a sustainable manner" (United Nations Development Programme, 1997).
In other words, capacity building develops the tools necessary to allow individuals, groups, organizations, institutions, and societies to meet challenges and resolve problems. The term "capacity building" emerged in the 1990s to signal a new approach, which was designed to be a more holistic and systematic process to address the shortcomings of traditional developmental assistance efforts. Capacity building is intended to marshal, enhance, and utilize various forms of capital in sustainable ways. Forms of capital include: natural capital such as renewable, nonrenewable, and replenishable resources; human capital provided by educated, skilled, and experienced individuals and groups; social capital that includes organizations and institutions, communities and societies, and the processes, structures, values, and norms that guide them; human-made capital such as infrastructure, equipment, machinery, and other forms of technology; and financial capital.
Among the tools used to fashion these forms of capital into tangible results are:
• improving individual health, literacy, and other skills required to adapt to differing and changing circumstances;
• integrating laws, policies, and strategies that encourage sustainable development;
• improving management practices and techniques;
• fostering institutions that facilitate and support partnerships and cooperative arrangements;
• developing appropriate infrastructure and technology to support sustainable development;
• identifying and promoting sustainable financing mechanisms; and
• building knowledge bases and awareness that facilitates better decision-making.
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