Abstract: This paper explores the meaning of the term "capacity building", its inter-relationship with institutional arrangements, and the implications for extension and adult education. It is based on work commissioned in 2002 by the Capacity Building for Innovation in Rural Industries Co-operative Venture (CV). The argument presented is that capacity building goes beyond the acquisition of new knowledge, skills and attitudes (human capital), and the building of better relationships (social capital). It means the people whose attributes and relationships are improved utilise the existing stock of physical, financial and natural capital to improve their situation and the overall stock of capital. Communities of practice are the building blocks of capacity building. They include those who are often referred to as ‘users’ but also those who are usually seen as ‘providers’ - all are seen as participants in and beneficiaries of capacity building. Capacity building requires the taking of action - anything that encourages or inhibits action-taking, or influences what is done and how, is significant. Institutional arrangements fall into this category, as do mind-sets and the values and beliefs underpinning them. Continuous improvement in the alignment within and between capacity building initiatives, institutional arrangements and mind-sets is the key to on-going improvement in the stock of capital. Extension and/or adult education programs are commonly equated with capacity building but the argument developed calls this into question. The implications are highlighted through a consideration of five related propositions and the conclusions drawn relative to each.

Media Summary

Capacity building requires the taking of action - anything that encourages or inhibits action-taking, or influences what is done and how, is significant. Institutional arrangements fall into this category. When they are instrumental in building capacity the people who benefit are empowered to challenge shortcomings they then see in the institutional arrangements.

Key Words

learning; leadership; diversity; commitment; facilitation; reflective practice

Introduction

This paper explores the meaning of the term "capacity building", its inter-relationship with institutional arrangements, and the implications for extension. It is based on work commissioned in 2002 by the Capacity Building for Innovation in Rural Industries Co-operative Venture (CV). It is a response to a field of enquiry characterised by a 'mess' of unresolved questions and ideas.

The Cooperative Venture (CV) group has as its members: Agriculture, Fisheries and Forestry Australia; the Murray Darling Basin Commission; and eight Rural Research and Development Corporations (DRDC, GWRDC, GRDC, MLA, LWA, AWI, RIRDC, and SRDC). Its aim is “to provide, through a coordinated program, the R&D basis to ensure an effective rural industries extension, learning and education system”.

The three projects commissioned were:

Project A: A National Extension/Education Review – What Works and Why?
Project B: Fostering Involvement in Rural Industry and Government Extension.
Project C: Improving Institutional Support Arrangements for Rural Capacity Building.

The authors undertook Project C and this paper draws heavily on their project report¹.

The Underlying Argument. The project report (Macadam et al, 2003) is propositional in nature. The argument presented there emerged from successive iterations of enquiry, reflection and debate. It is a response to a field of enquiry characterised by a 'mess' of unresolved questions and ideas. It is summarised here and pursued in more detail in the rest of the paper.

Capacity building goes beyond the acquisition of new knowledge, skills and attitudes (human capital), and the building of better relationships (social capital). It means the people whose attributes and relationships are improved utilise the existing stock of physical, financial and natural capital to improve their situation and the overall stock of capital.

Communities of practice are the building blocks of capacity building. They include those who are often referred to as ‘users’ but also those who are usually seen as ‘providers’. They are all seen as participants in and beneficiaries of capacity building.

Capacity building requires the taking of action. Anything that encourages or inhibits action-taking, or influences what is done and how, is significant. Institutional arrangements fall into this category, as do mind-sets and the values and beliefs underpinning them.

Continuous improvement in the alignment within and between capacity building initiatives, institutional arrangements and mind-sets is the key to on-going improvement in the stock of human, social, financial, physical and natural capital.

The argument is further developed through a consideration of five related propositions:

(1) Effective capacity building maintains a focus on outcomes as improvements in the stock of capital sought by stakeholders. Effective capacity building strives for consistency between the outcomes sought and the nature, design and conduct of interventions.

(2) Effective capacity building defines and engages the relevant communities of practice. In doing so it encompasses a diversity of interests and world-views, and avoids the losses associated with marginalisation of potentially significant people.

(3) Effective capacity building builds a common agenda and a willingness to collaborate among the members of the relevant communities of practice.

(4) Effective capacity building depends on political and institutional commitment to the goal of capacity building programs, and the alignment with it of strategically important organisations.

(5) Continuous enhancement of capacity building depends on availability of skilled practitioners, on their reflective practice, and on research into all its aspects.

The structure of the paper.

The next section of the paper presents a 4 part conceptual framework:

(1) a consideration of what is meant by rural capacity building, what it involves, and who should be involved;

(2) a review of what is meant by institutional arrangements, and of factors that impinge on them;

(3) a discussion of the reciprocal nature of the relationship between capacity building and institutional arrangements, and the significance of this for a process of continuous improvement in both; and

(4) a summary of the conceptual framework developed through sub-sections 1-3.

This is followed by a summary of the conclusions reached relative to each of the 5 propositions outlined above.

The Conceptual Framework

1. Capacity Building

What is capacity building?

The need to argue a definition of capacity building is the starting point for this section.

The need is evident in the literature related to it. Ryan and Rudland (2002) for example maintain that: “For all of the rhetoric that is bandied about in federal, state and community development arenas, it is unclear what is meant by ‘capacity’. Nor is it clear how you ‘build’ it, demonstrate it and measure it”. This uncertainty is echoed in the international arena: “Capacity development is for the most part an amorphous concept. It is still unclear what capacity looks like, what its components are, how it develops and what outsiders can do to encourage its development (European Centre for Development Policy Management, 2003)".

Land (2000), after reviewing some case studies, notes that “…thinking on capacity and capacity building remains fluid, yet fertile, influenced by different intellectual traditions, contexts, vantage points and experiences. Clearly there is no single right answer.” He reminds us that “…where concepts lack precision, and meanings are implicit rather than explicit, there is a risk of creating misunderstanding as well as of raising different expectations among stakeholders.”

Mindful of the latter's admonition the authors undertook a survey of concepts and terminology in recent usage.

Emerging from the review is the notion that capacity building refers to: intervention, consequent enhancement of human and social capital plus increased motivation or commitment to act or empowerment to act independently, and the expectation of an outcome in the form of an improvement of some kind.

"What constitutes an improvement?" then becomes a key question. The rural situation reviewed in the report suggests a common interest in improving:

• business profitability and sustainability;
• industry profitability and sustainability;
• the ecological health of catchments;
• the well-being of residents; and of their communities.

This suggests that the expected outcome of capacity building can be construed as an improvement in the stock of capital. This extends beyond human (attributes of individuals) and social capital (the quality of their relationships). It also includes physical (infrastructure), financial and natural capital. All are involved to a more or less extent in the interventions people make to improve problematic situations, and all are involved to a more or less extent in the improvements sought.

Different categories of capital can substitute for others. : If we don’t have the knowledge we need we use financial capital to buy it. If natural capital in the form of soil fertility is deficient we use financial capital to buy fertiliser. If community relationships are poor we can we build a community centre (physical capital) to stimulate interaction. This notion of substitution of forms of capital underlines the importance of an ethical dimension. There is for example a groundswell of concern about the way exploitation of the natural environment has been translated into financial capital.

When people act to improve a situation they are not thinking in abstractions like 'improvements in the stock of capital' but it is nonetheless a useful way of conceptualising the outcomes of capacity building. It highlights the developmental nature of capacity building - increases in the stock of capital are the basis for further increases. It also highlights the systemic nature of capacity building and the fallacies inherent in over-reliance on utilising and building any one category of capital. It points up for example the limitations of education programs as a way of effecting improvements in complex problematic situations, and thereby the stock of capital.

Thomson and Pepperdine (2003) capture an essential aspect of capacity building: "it aims to do more than build a stock of static capital: use of that capital is clearly intended". An illustrative implication is that unless an education program focused on a particular stock of knowledge incorporates utilisation of the knowledge to improve a 'real-world' problematic situation (i.e. an improvement in the stock of capital) it is not a capacity building program.

Conversely a situation improving initiative is not a capacity building one unless it is conceptualised as such. It is only when problem-solving or situation-improving is conceptualised as capacity building that it can be managed, monitored and evaluated as a learning project, and learning is a fundamental aspect of capacity building.

The authors' definition: Capacity building is construed as externally or internally initiated processes designed to help individuals and groups associated with rural Australia to appreciate and manage their changing circumstances, with the objective of improving the stock of human, social, financial, physical and natural capita in an ethically defensible way.

Where does capacity building occur, and who does it involve?

Given the definition of capacity building above it follows that a capacity building strategy must address the issues of who should be involved, and for what purpose. Given also that the definition above incorporates the notion of Capacity Building for Innovation in Rural Industries Co-operative Venture "enhancement of human and social capital and empowerment to act independently". Kingma's (2000) review of related empirical research is highly relevant. He contends on the basis of this review that that we should focus on:

• re-orienting policy strategies towards community capacity building,
• establishing how a new form of enabling leadership can be fostered, and
• facilitating the growth and development of learning communities that are flexible and responsive to changes in community values, changing labour market requirements and environmental stewardship.

He maintains that this focus is the key to building human capital (the attributes of individuals) and social capital (the quality of relationships) and highlights the connections between social cohesion, civic and economic wellbeing and the social processes which contribute to such beneficial outcomes. Central to this are processes of consultation, communication and decision-making that are participatory and inclusive (The authors contend that this focus is also the key to improving the stock of physical, natural and financial capital in an ethically defensible way).

Kingma’s review sees these processes and activities set in a regional context. Engaging a broad cross-section of the community enables reciprocal trust to be forged and reinforced while resolving conflict in a way that builds rather than depletes social capital and trust. These activities create a learning community that has agile responsiveness to changes, and can respond to the emerging need for, for example, new skills for new industries.

Rural, region and community. The notion of a regional focus for capacity building brings into question the meaning of the terms ‘rural’, 'region' and 'community'.

The authors contend that the term ‘rural’ encompasses the people and activities that impinge on the welfare of rural regions - a 'value chain' or a health initiative for example. These processes extend beyond rural as a place. A 'region' is also usually construed as a place, but the activities at stake and the people involved will often be drawn from beyond it too. The marketing of agricultural outputs and inputs is a case in point, as is the impact of funding decisions made by urban-based staff of rural research and development corporations.

The critical issue is the one taken up by Kingma (ibid) – the relevant community has to become a learning community that is agile in responding to change, and this means drawing into its deliberations people who live outside the region but whose activities impinge on it. Their capacity to contribute to the welfare of the people of the region may be critical. For capacity building purposes they should be ‘swept in’. Their welfare is also enhanced to the extent that the region prospers. They are stakeholders and potential actors and beneficiaries.

Boundary setting. In systems terminology the issue at stake is where to place the boundary of a rural capacity building system (An underlying assumption here is that a system is a mental construct, not a physical reality. Defining a human activity system involves stating its purpose, actors, beneficiaries, owners, the worldview underpinning it, and the constraints acting on it). Midgley (1995) makes the point that the boundary of a human activity system is a mental construct that defines who will be included. He goes on to discuss the ethical dimensions of the boundary setting decision. Who makes it, and on what grounds?

Given that the intent of capacity building is to utilise existing capital to effect an improvement in the required stock of capital it follows that those whose practices and access to capital are integral to improving the problematic situation outcome should be involved. The boundary depends on the situation to be improved. Wenger’s (2000) concept of communities of practice (of dentistry, farming, professional cricket or applied agronomic research for example) is useful here. The relevant communities of practice should be involved. An explanation of the concept of communities of practice and their significance is provided in Box 1.

Box 1. Communities of practice, social learning systems and capacity building

Some extracts from a recent paper by Wenger (2000) help explain the concept of communities of practice:

... Since the beginning of history human beings have formed communities that share cultural practices reflecting their collective learning; from a tribe around a cave fire, to a medieval guild, to a group of nurses in a ward, to a street gang, to a community of engineers interested in brake design.

... (They) are the basic building blocks of a social learning system because they are the social 'containers' of the competences that make up the system.

... (They) cannot be romanticised. They are born of learning, but they can learn not to learn. They are the cradles of the human spirit, but they can also be its cages.

... the boundaries of organizational units are usually more fluid (than those of organisations). That these boundaries are often unspoken does not make them less significant. Sit for lunch by a group of high-energy particle physicists and you know about boundary, not because they intend to exclude you but because you cannot figure out what they are talking about. Shared practice by its very nature creates boundaries.

... Communities of practice depend on internal leadership.

Communities of practice as the building blocks of learning organisations and communities. Viewing capacity building as the work of a social learning system whose sub-systems are communities of practice highlights the importance of a generative tension within it. Achieving this according to Wenger (ibid) requires:

• something to interact about, some intersection of interest, some activity;
• open engagement with real differences (between and within communities of practice ) as well as common ground;
• commitment to suspend judgement in order to see the competence of another community of practice, in its terms;
• ways to bridge the distance and lack of connection between different communities of practice and facilitate interaction between them.

Within organisations and the wider community the members of various communities of practice contribute their competence by participating in cross-functional projects and teams that combine their knowledge and practice to get something done. This simultaneous participation in a community of practice and a project team creates learning loops that combine application to improve the project situation with capability development of participants. The learning and innovation accruing from the project is disseminated through the members of the home communities of practice. This new knowledge can then be expanded in new projects involving other communities of practice. An organisation that encourages and supports cross-functional projects of this nature merits the "learning organisation" descriptor, and a community that does likewise that of a "learning community".

What does capacity building involve?

The definition of capacity building above postulates that capacity building occurs when relevant communities of practice utilise their stock of human and social capital and their access to financial, physical and natural capital to improve problematic situations, and effect improvements in the stock of capital in the process.

The stock of human and social capital is developed through learning. It is central to the capacity building process, as are the related ones of developing personal autonomy and interdependence, and facilitative leadership. The meaning attached to these terms is pursued in this section.

Learning. Studies on learning emphasise the apparently disordered way in which adults learn. Their learning projects are not time-tabled in an orderly manner and there is an emphasis on informal learning and the role of a wide range of enquiry processes and sources of information. The work of Tough (1971) and Salmon and Underwood (1980) revealed an underlying pattern in the learners’ use of these processes and resources, and the logic of their sequence. Although long recognised this is still largely ignored in educational practice.

Educational programs continue to be criticised because they do not coincide with this natural order. There has instead been a ‘one size fits all’ approach, an apparent lack of relevance to potential participants, and rigidity in terms of what is offered, its form and timing (Anon). This situation has stimulated a number of related educational responses, including self-directed learning (Knowles 1975), experiential learning (Kolb, 1984), problem-based learning (Boud and Feletti, 1991), and action learning (Zuber-Skerritt, 1996).

These responses constitute variations on the theme of integrating educational methodology with the natural learning process, and addressing institutional constraints inhibiting this. They are central to a consideration of capacity building.

The theme is well developed in Kolb’s (1984) model of experiential learning. His basic proposition, as developed by Bawden (1990), is that learning is an iterative process of “finding out” about problematic situations we are experiencing (awareness, exploration and analysis) “making sense” of the data generated in terms of what can be done to improve the situation (discernment and design), and “taking action’ to effect an improvement in the situation (implementation, monitoring and evaluation).

Translating development as a learner into the context of building capacity to manage change takes learning beyond simply learning how to undertake the tasks that result in technical competence. The literature on learning and cognitive development identifies three levels of learning related to the required characteristics, and suggests the conditions that enable their acquisition (Kitchener 1983, Salner 1986). They are:

• Learning how to do something - the capacity to practice something e.g. to manage a business more efficiently;
• Learning how to learn - the capacity to observe and reflect on the process of learning, and to generalise this to other situations e.g. to recognise one’s own ways of learning, its advantages and disadvantages, and ways of learning more effectively (e.g. Schon, 1990);
• Learning how to critically evaluate the basic assumptions underpinning what is learned, and how it is learned - the capacity to discern and critique strategic assumptions (of self and others) e.g. to appreciate how one’s own basic beliefs and worldviews influence one’s decisions and actions, as well as what lies behind the words and actions of others, and be able to critically assess their ongoing relevance (e.g. Brookfield, 1987).

Each of these categories of learning can be construed as a cycle of experiential learning i.e. finding out/making sense/taking action. Learning that develops capacity to manage complex uncertainty incorporates all three categories. Ison et al's (2000) description of it as triple loop learning is based on Bawden's (1995) distinction between learning, meta-learning and epistemic learning.

Personal autonomy and interdependence. Hand-in-hand with development as a learner is development of personal autonomy and interdependence. These are the basis of effective relationships, i.e. of social capital.

This development is characterised by movement from dependence on others – for what is learned and how - to interdependence. Interdependence means taking responsibility for one’s own learning. This is also a hall-mark of independence, but interdependence adds another dimension. It is characterised by a willingness to engage in critical discourse that draws on the knowledge and wisdom of others.

The movement from dependence to interdependence is often accompanied by phases of counter-dependence and counter-independence .The former is characterised by ‘rebellion’ against the people and institutional arrangements the learner is depending on, and the latter by hostility to those who then offer freedom to learn, even if it is accompanied by their support. Parents who have raised teenage children will probably identify with these phases.

Common observation suggests people are often ‘stuck’ in stages that fall short of interdependence. Once again there is a substantial body of literature on the conditions that enable movement from dependence to interdependence (Tuckman 1965, Reid 1965, Boud 1981). It is often linked to the literature on cognitive development and the concept of levels of learning (Salner, 1986).

Facilitative leadership. Leadership for capacity building is facilitative rather than instructive and enables others to develop as interdependent learners. It is both an input into and an outcome of capacity building. It enables people on farms and in rural organisations and communities for example to understand the inter-connected and dynamic nature of (a) the issues they are facing; (b) their farm, organisation or community; (c) the environmental forces acting on it, and (d) the processes of learning and development. It enables them to ‘see’ their situation through this prism, and challenges and supports them to act to improve it.

Who builds capacity?

Who is responsible for and competent to build capacity? If capacity building is about interdependent learners operating as self-improving systems it follows that all members of the relevant communities of practice are potentially responsible and competent to build capacity. A major implication of this is that defining some as providers (of capacity building services) and others as users (of the services) is counter-productive. All are co-learners in the process, though bringing different attributes, and driven by different forces. The implications for the interplay of institutional arrangements and capacity building, and the reform of both, are discussed later in the paper.

The conventional answer to the question above is probably the "educators and extension workers" who are seen as having institutionally bestowed rights to the title and, thereby, the competence to practice. A more appropriate answer is that competence is better defined by personal qualities and social context rather than institutionally defined role. The term facilitative leader or capacity builder captures this better than say extension worker, teacher or educator, and extends the role to anyone (and potentially everyone) in the relevant communities of practice.

Those normally designated as capacity builders may or may not have the needed qualities, while community members or commercial agents may. Expectations based on institutionally defined roles are however a powerful shaper of behaviour. They determine for example perceptions of who is eligible to participate in professional development programs aimed at upgrading facilitative leadership skills: extension officer – yes; farmer with tertiary qualifications – probably; farmer without qualifications – unlikely.

Nevertheless, educational and RD&E organisations have institutionally defined obligations to play a leadership role in capacity building and are resourced accordingly. The issue at stake is whether the institutional arrangements in place promote this. The next section explores what is meant by 'institutional arrangements', and factors that impinge on them.

2. Institutional Arrangements

Capacity building as defined earlier necessitates the utilisation of existing capital to improve a problematic situation and effect an improvement in the stock of capital, i.e. it requires the taking of action. Anything that encourages or inhibits action-taking, or influences what is done and how, is significant. Institutional arrangements fall into this category, as do mind-sets and the values underpinning them. They are primary determinants of behaviour (practice).

George Kelly was an eminent psychologist and the founder of personal construct theory (Bannister and Fransella 1971). His fundamental premise is that people act on expectations of the consequences of their actions, and the significance for them as individuals. In his view we are constantly hypothesising about the link between what we do and the consequences, and that we act accordingly.

The result is infinite variety in the way individuals behave. There are however predictable patterns within this diversity. This predictability reflects the institutional arrangements individuals are embedded in and their perception of what is expected of them. It is also a reflection of their world-views and the judgements we subsequently make about what is observed.

The authors' definition: For the purposes of this project institutional arrangements are regarded as the complex of laws, customs, markets, norms and associated organisations that channel our energy toward social goals and the way we relate to others (after Gleeson and Piper 2002).

The definition is based on the assumption that what is practised within a culture is regulated by its institutional arrangements, and by the mindsets of the players. The former are taken to be (a) gazetted laws and regulations, (b) commonly accepted but not legally binding rules and guidelines, and (c) organisations established by the culture. Institutional arrangements are based on customs and traditions, and moderated by prevailing belief systems and values.

Hall et al (2000) highlight the practical significance of institutional arrangements in their description of institutional learning: "At its simplest the concept recognises that innovations emerge from systems of actors. These systems are embedded in an institutional context which shapes how individual actors behave and how they interact with other elements of the system".

Beliefs, values, world-views and mind-sets

The terms world-view, mindset, perspective, values and beliefs tend to be used almost interchangeably.

The authors position: Beliefs and values are reflected in worldviews that mediate discourse about what should be done, why and how. Mindsets are strongly influenced by world-views but incorporate a more immediate pre-disposition to respond to a situation that incorporates other factors e.g. emotional state.

Burrell and Morgan (1979) maintain worldviews are grounded in sets of beliefs about:

• The nature of reality e.g. whether the world is flat or round.
• The nature of knowledge and the relationship between knowledge and truth e.g whether only objective knowledge can be ‘true’, or whether myth, legend and spirituality play a part.
• Human nature, and the values humans hold e.g. whether an action is morally right or wrong, or whether ‘it depends’ on the context.
• How the preceding sets of assumptions are put into practices that reflect them.

Institutional arrangements are both stable and dynamic. Dynamism is reflected in the richness and complexity of the way beliefs are incorporated into the world-views that dominate political discourse and decisions. Stability is apparent in time-lags associated with translating changes in prevailing world-views into institutional arrangements - the phenomenon of institutional inertia. Pusey (2003) accelerated usage of the term 'economic rationalism' with his analysis of the impact of neo-liberal economics on Australian government policy and practice. His most recent research indicates that the majority of 'middle Australians' are dissatisfied with the outcome. Does this presage a shift in prevailing mind-sets, and ultimately in institutional arrangements and practice? Figure 1 below illustrates the interplay between mid-sets, institutional arrangements and behaviour. An illustrative example is presented in Box 2.

Figure 1. The interactive relationship between mindsets, institutional arrangements and behavior.

Triple loop learning as described earlier has as its third loop epistemic learning, i.e. learning to appreciate how our basic beliefs and worldviews influence our decisions and actions, as well as what lies behind the words and actions of others, and being able to critically assess their ongoing relevance. Unless and until learners progress to this level they are captives to what Hugh Mackay refers to as the "cage of prejudice" (see Box 3).

Box 2. Attitudes, Behaviour and Institutional Arrangements

Reflecting on the introduction of random breath testing (RBT) brings into focus the commonly held belief that attitude change is the key to behaviour change. It may be the other way round, with institutional arrangements and political decisions playing a critical role.

Prior to the introduction of RBT and in the absence of the political will to do so the strategy to counter drink driving was centred on persuasive communication campaigns. They failed and the incidence of drink driving and road fatalities continued to rise. The prevailing attitude, particularly among young males – the principal offenders, was one of bravado.

Drink drivers did not expect to be involved in an accident, nor to be apprehended by police. They behaved accordingly and maintained an attitude that supported this. The latter was reinforced by peer support and social norms. When the political decision to introduce RBT was taken a publicity campaign created the expectation that RBT would be so frequent and pervasive that apprehension was a near certainty. The effect was a dramatic change in behaviour. This led in a relatively short space of time to an equally dramatic change in social attitudes and norms. Whereas previously an offender might have been viewed with amused tolerance the new view was that he was a fool.

Recent media reports highlight a perceived need to concentrate police resources in rural areas to counter the rising incidence of road fatalities there.

Communities of practice

Wenger’s (2000) concept of communities of practice (highlighted earlier in the section on capacity building) is an institutional arrangement of particular relevance, given his observation that they define what constitutes competence for the people who belong to them, and hence what is expected of them. Competence here means understanding the community of practice well enough to contribute to it, engaging with it in establishing norms and mutual relationships, and having access to its communal resources and using them appropriately. He includes language, routines, sensibilities, artifacts, tools, stories and styles as communal resources.

A community of practice is innately conservative, but is constantly challenged because members are often members also of other communities with their own expectations and belief systems. The tension between these is a stimulus for intra-community change, as well as for the emergence of new communities of practice. Examples of this abound in the disciplines and professions where new variants within, and new hybrids across them are always emerging.

The need for variety

Ashby’s (1956) law of requisite variety proposes that the variety within a system be commensurate with the variety of challenges it has to respond to. Effective rural capacity building will usually necessitate interaction between private, public and community sector organisations and an array of communities of practice; and will be diminished by insularity (the ‘silo’ syndrome). Capacity building challenges the latter and may generate resistance from those who see themselves as benefiting from the current arrangements, and who are unable or unwilling to see their limitations. Capacity building for catchment improvement will generate different outcomes depending on whether or not 'greens' are included; and capacity building for industry development will generate different outcomes according to whether or not 'ethnics' or international marketers or consumers are involved.

3. The Inter-play of Institutional Arrangements and Capacity Building

Institutional arrangements can foster dependence on authority figures and institutions. They can also however stimulate the development of interdependent, critical learners and facilitative leaders. When the former conditions prevail there is little challenge to power relations within the institutional arrangements, and institutional inertia means these arrangements are slow to change, even where there is a pressing need for it.

When institutional arrangements are instrumental in building capacity the people who benefit are empowered to challenge shortcomings they then see in the institutional arrangements. How people within the organisations so challenged respond largely depends on their own development as learners and how this is reflected in the strategy and operations of the organisation – particularly its openness to alternative views and ways of doing things. Facilitative leadership plays a key role in enabling this.

The implication of this reciprocity is that the organisations that fund capacity building services are as much a target for capacity building as are the rural communities they see as their client base. The authors are familiar with a situation where DRDC’s Regional R&D Program was instrumental in developing the capacity of dairy farmers in the Murray-Goulburn Region to a point where they staged a persistent and well-argued case for greater autonomy in the management and expenditure of research funds. The initial response within DRDC was resistance but the challenge stimulated a debate that led to a change in procedures and devolution of authority, which fuelled further capacity development and further challenges.

The reciprocal nature of institutional arrangements and capacity building is illustrated by media reports on the debate about the well-being of indigenous people on Cape York. Noel Pearson and his colleagues contend that existing arrangements have generated dependence and incapacity and are maintained by a coalition of a welfare lobby (which points to the incapacity of the people to manage to carry its argument), and the local indigenous population (which sees welfare as its means of survival). Breaking out of this, and developing new and effective institutional arrangements, will be a capacity building exercise of monumental proportions. It is going to cause heartache and pain, but Pearson et al maintain not breaking out will be worse. Peter Yu, another prominent indigenous activist, presents a similar argument (Yu, 2000).

4. The Conceptual Framework in Summary

• Capacity building occurs when relevant communities of practice utilise their stock of human and social capital and their access to financial, physical and natural capital to improve a problematic situation, and effect an improvement in the stock of capital in the process.
• Those whose practices and access to capital are integral to improving the problematic situation should be involved, i.e. the relevant communities of practice.
• The stock of human and social capital is developed through learning.
• Defining some communities of practice as providers and others as users is counter-productive. All are co-learners.
• Capacity building requires the taking of action. Anything that encourages or inhibits action-taking, or influences what is done and how, is significant.
• Institutional arrangements mind-sets and the values and beliefs underpinning are primary determinants of behaviour.
• Institutional arrangements within a culture are taken to be (a) gazetted laws and regulations, (b) commonly accepted but not legally binding rules and guidelines, and (c) and organisations established by the culture. Institutional arrangements are based on customs and traditions, and mediated by the belief systems and values apparent in world-views.
• When institutional arrangements are instrumental in building capacity the people who benefit are empowered to challenge shortcomings they then see in the institutional arrangements.

Extension, Adult Education and Capacity Building

Extension and/or education programs are commonly equated with capacity building. The definition of capacity building developed in the conceptual framework

calls this into question. Mackay's (1994) overview of the communication process (see Box 3) provides a framework for pursuing this further. Some implications:

• Extension and education programs per se are unlikely to stimulate action unless they complement existing action intentions;
• action is more likely to be stimulated by expectations within a person's communities of practice than by external ones, e.g. for a farmer those within his communities of practice, and for a commercial or government agent those she belongs to;
• programs based on a provider/user perspective are inherently unequal in terms of power relations, and likely to distort mutual perceptions and expectations;
• the initial goals of action-taking to improve a problematic situation will vary between stakeholders, e.g. an increase in financial capital for commercial agents, physical and financial capital for farmers, social capital for community groups, human capital for educators;
• participation in capacity building is likely to be stimulated by incentives tailored to meet the initial goals of different stake-holders, e.g. a tax incentive or access to infrastructure funds for those seeking an increase in physical or financial capital;
• participation with other stakeholders in a joint effort to improve a problematic situation provides a context for generating shared increases in the stock of human, social, financial, physical and natural capital;
• leadership is the key to initiation of joint efforts to improve problematic situations and may come from within any one or more of the stakeholder groups;
• facilitative leadership is essential for building and maintaining a pattern of reflective practice among stakeholders in a joint effort to improve a problematic situation;
• "providers" are best seen as providing access to the resources needed to improve a problematic situation.

Box 3. Communication and Behaviour

A model of the communication process presented by psychologist Hugh Mackay (1994) is based on a description of barriers to effective communication. Effective communication is assumed to have occurred when persons A and B reach common ground on an issue at stake, and this is apparent in the flow of feed-back between them. If the initial purpose of the communication is taken into account however the model extends to the action taken in response to the communication.

Extension and public education programs are undertaken with a view to persuading the target audience to behave in a certain way, e.g. adopt a farming practice, or give up smoking. Let us assume then that person A (an extension/education operative) has initiated the communication with the intention getting B to behave in the desired way - the goal of the program. If this happens A will be meeting expectations generated within his institutional context e.g. those of his employing agency.

According to the model the barriers to communication between A and B are:

Translation - the ability of A to translate a complex 'mess' of internalised emotions and knowledge into a communicable message.

The medium - the ideal is intimate face-to-face contact that allows maximum feedback and interaction. The medium otherwise constrains communication in terms of its relative remoteness (telephone is less remote than radio), and its compatibility with the message (TV for emotions, print for facts).

The "cage of prejudice" - B is prejudiced, i.e. set to pre-judge on the basis of her world-view, values etc, and will accept/avoid messages and/or selectively interpret them.

A can address these barriers by (a) finding out as much as possible about B's pre-disposition and design a message/program and its delivery accordingly, and (b) seek constant feed-back and adapt the message/program in response.

If we assume that A and B do manage to communicate effectively the next question is does B go on to behave in the way A expects. This is unlikely unless what A expects is consistent with the complex of real-world factors impinging on what B does, e.g. the expectations of her family and/or peers and/or employer and their demands on her time; her financial situation; access to resources; etc.

A can work to make his message/program more effective by finding out as much as possible not only about B's pre-disposition to accept his message/program, but also the real-world context she is embedded in. If he does he is likely to find that B has a "message" for him, and would like him to behave in a way that meets her expectations, i.e. that communication is a two-way street, or worse - is not interested in him or his message.

If the real-world situation of B is markedly different to that of A (e.g. B is set in the institutional context of a farming community and A in a government agency) it may be a case of 'ne-er the twain shall meet' - unless a new set of arrangements that accommodates the needs of both can be established.

Propositions

Given the background provided by the argument presented above the authors utilised the 5 propositions listed in the Introduction to guide a review of (a) a preferred future situation regarding capacity building and related institutional arrangements, (b) the current situation, and (c) needed action to bridge the gap. The details of this review a feature of the Project Report. A summary of the conclusions reached relative to each proposition is as follows.

Proposition 1: Effective capacity building maintains a focus on outcomes as improvements in the stock of capital sought by stakeholders. Effective capacity building strives for consistency between the outcomes sought and the nature, design and conduct of interventions.

Conclusions: Within a capacity building program the scope and purpose of an individual’s learning projects are not pre-ordained by the educator or the educational and training organisation.

Programs based on a learning paradigm will utilise two complementary sets of methods to support capacity building. One set relates to Learning Facilitation, the other to Learning Support.

Monitoring and evaluation should focus on achievement of sought after socio-economic and environmental outcomes (improvements in the stock of capital), and the emergence of the patterns of behaviour considered to be the stepping-stones to doing so.

Evaluation based on a ‘provider - user' perspective is too often dominated by accountability issues and a concern with inputs and participant satisfaction.

Critiques of rural extension consistently highlight the continuing dominance of the technology transfer model in institutional arrangements related to RD&E.

Many existing extension/education programs are potential complements to capacity building - given an over-arching agreement on what constitutes capacity building, and utilisation of a monitoring and evaluation system that stimulates it.

Proposition 2: Effective capacity building defines and engages the relevant communities of practice. In doing so it encompasses a diversity of interests and world-views, and avoids the losses associated with marginalisation of potentially significant people.

Conclusions: Basic needs for successful capacity building by communities of practice are leadership, diversity and resources.

There is institutional support for developing rural leadership potential but it tends to focus on the development of executive rather than facilitative leadership.

Facilitative leadership is more likely to be a product of effective capacity building programs themselves (than of conventional 'leadership programs').

Rural Australia is rapidly diversifying, so enlarging the available range of knowledge, skills, attitudes and worldviews.

With the likely exception of long-term projects, substantial resources are potentially available to support capacity building. Their effective utilisation is however inhibited by lack of appreciation of the nature of capacity building and misalignment of resources with needs.

Proposition 3: Effective capacity building builds a common agenda and a willingness to collaborate among the members of the relevant communities of practice.

Conclusions: Research cited highlights the importance of involving participants in establishing project goals and design; involving a wide cross-section of the community; aligning institutional factors from outside the region with the aspirations and capabilities of individuals and institutions within it; giving freedom to project leaders; and ensuring duration of funding is sufficient to enable the project to succeed or fail.

A preliminary set of criteria to guide the design, conduct, monitoring and evaluation of capacity building initiatives is proposed as follows:

• Diverse and relevant communities of practice collaborating in creating a shared agenda.
• A systemic approach to situation improvement i.e. inter-related strategies that encompass all aspects of capital improvement.
• Stated assumptions that reflect a collaborative learning paradigm
• Scope for continuous improvement is offered by consistency between desired outcomes, methodology, and the monitoring and evaluation strategy.
• Provision for and access to the full range of resources needed for success.
• Improvements in the stock of physical, financial, natural, social and human capital generated through participation in situation-improving activities, and related learning activities.

Programs that meet these criteria are becoming more commonplace but remain the exception rather than the rule. Institutional reasons include: (a) structures and processes outside the region are incompatible with holistic community-led processes at the regional level; and (b) state and federal government arrangements are not aligned to capture and strengthen the benefits of enhanced capacity at the regional level.

Proposition 4: Effective capacity building depends on political and institutional commitment to the goal of capacity building programs, and the alignment with it of strategically important organisations.

Conclusions: Capacity building as defined in this Report is not sustainable without alignment of institutional arrangements to support it. There is growing appreciation of this at the political level, within the complex of strategically important organisations, and at the community level.

The alignment nexus depends to a large extent on the establishment at the regional level of co-ordinating and regulatory mechanisms that enable a partnership between community based organisations and communities of practice, and those within the complex of strategically important organisations. Effective action by these partnerships requires a reallocation of resources and authority from the centre to the regions.

The needed re-alignment is inhibited by institutional inertia within strategically important organisations where closed organisational boundaries and a command and control management style based on a compartmentalised worldview are perceived as holding sway.

Support for leadership and expertise critical of the status quo will play a large part in achieving the alignments needed for capacity building.

Proposition 5: Continuous enhancement of capacity building depends on availability of skilled practitioners, on their reflective practice, and on research into all its aspects.

Conclusions: The underpinnings of new fields of practice are provided through centres of research and education, usually in universities. Currently there are a few small centres, a few widely dispersed researchers, and little support from funders and the universities themselves.

The development of most capacity builders is probably going to occur mainly as adult education, and as needs emerge. A variety of avenues offer potential as providers and facilitators, including ACE, universities and professional bodies such as APEN and ALARPM. This potential is under-utilised, and support does not always endure for the duration of need.

Reflective practice is little practised or encouraged. Its use depends on modelling by educational institutions, self-discipline on the part of capacity builders, and encouragement from funding and employing organizations.

A substantial body of research questions is apparent concerning aspects of capacity building. The Cooperative Venture offers potential to develop a research agenda, and fund a network of researchers for that purpose.

Conclusion

Capacity building is a relatively new concept whose terminology is clouded with confusion. There is sufficient in common in most definitions to lead to a view that it offers a sound approach to supporting rural Australia to manage the effects of change.

The potential for this will be enhanced if:

• Relevant organisations and people are challenged to ponder the likely operating environment for rural Australians, and consider its implications for the ways in which they might be supported.
• A widespread dialogue about capacity building and related mindsets and institutional arrangements is initiated among all interested and relevant people and organisations, using the project report this paper is based on as a basis.
• Organisations and people are encouraged to identify and reflect on the mindsets and institutional arrangements which impinge on their work within rural communities, and how they might be modified to stimulate capacity building.

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