Making urban sector lending work; lessons from a capacity building programme in Karnataka, India

Abstract

This article presents experiences with human resource development and `capacity building programmes’ in urban sector lending by multilateral agencies. The article first reviews the history of `capacity building’ and provides a view on its meaning. The experiences with a capacity building programme, part of an infrastructure loan to the state of Karnataka in India, are subsequently elaborated as an illustration. The article seeks to identify the factors determining the success of capacity building programmes which are part of urban lending. It concludes first that Terms of Reference, drafted in a bottom–up and demand-driven fashion are a better guarantee for ownership, commitment and positive results. Secondly, capacity building activities need to be tailored to the ability of the towns to make changes in their operation. Finally, capacity building at local government level can only be effective if reciprocated by supportive measures of state governments. The paper also argues that Technical Assistance (TA) as a component of capacity building should be more strongly integrated in the loan component activities and continue throughout the project period.