Public institutions, private organizations and non-government organizations play very important roles in the development of social, economic and other aspects of the world. But they cannot play their roles desirably due to many reasons including a lack of capacity, which is often mentioned in development contexts. Institutional capacity leads to effective policy-making, the success of organizations in terms of the achievement of their goals and social improvement while a lack of institutional capacity leads to poor outcomes for organizations, social injustice and many other negative impacts. Consequently, institutional capacity building that aims to enhance the capacity of governments, businesses, non-governmental groups and communities to plan, manage and perform activities has become an important area of focus in many countries.
Many government, private, non-government and other organizations lack the capability to set and achieve organizational, economic and social goals through knowledge, skills and systems in many countries. Both micro and macro level organizations lack the institutional capacity as is desired. But government and other organizations lack institutional capacity in less resourceful countries more because of a lack of financial and other resources, political influence and a few other causes. But there is a lack of effort to build organizational capacity in many organizations. Even if there are capacity building measures among organizations, these are not enough for the needed capacity of organizations to desirably function and play their roles in society. Moreover, there is a range policy related, resource based, operational and other barriers to building institutional capacity.
Unplanned policy or inadequate organizational policy making, limited budgeting and misuse of budgets, a lack of organizational oversight and a lack of human resources put significant barriers to capacity building. Financial barriers are important barriers to capacity building for many organizations including government organizations. A lack of political and organizational commitment, a lack of adsorptive capability to exploit knowledge, limited infrastructures and inadequate technical capacities also put hindrances to capacity building. No less important is that corruption, a lack of transparency and accountability and political influence may put barriers to institutional capacity building. These are the cases especially in authoritarian or less democratic countries that prefer institutes to remain under their control and are less willing to invest resources needed for improved organizational capacity.
To help organizations address problems and challenges and achieve their objectives, institutional capacity development is vital through addressing resource based and other barriers. But the capacity of both micro and macro level organizations needs to be developed. The emphasis needs to be given to capacity development plans, mobilization and management of financial and human resources, management and operation of organizations and organizational sustainability. Moreover, the assessment of capacity needs and gaps, training and information sharing need to be strengthened to support organizations to achieve their goals. Improving technical and adaptive capacities can improve the institutional capacity of many organizations. Cooperation among organizations is important especially for achieving shared objectives. But mechanisms and networks need to be developed for effective interaction and cooperation.
No less important is that assistance from international organizations, addressing political causes and improving transparency are very important. Assistance is needed from donors, international governmental organizations and international non-government organizations to build institutional capacity. This is the case especially for public and private organizations in less resourceful countries. Along with the efforts of governments in less resourceful countries, international assistance in policy development, technical assistance and other sorts of organizational assistance are important. International organizations’ support could facilitate conducting useful training programs for the development of institutional capacity. Of course, accountability and transparency are important for the increased capacity of organizations. Also, political influence needs to be reduced to let organizations function based on their goals.
