A couple of points: (i) Capable bright people with equipment does not necessarily mean high performing organisations. In short - turning individual competence into organisatuional capacity requires institutional change. This includes the incentive structure Anand is talking about, as well as the broader political economy challenge that in many LICs political elites do not view the bureaucracy as a developmental instrument. It is a vehicle for patronage. (ii) Development time does not match political time. When elites want some for m of change they need it in the short-term - not in the years talked about by us developmental types. (iii) And actually there is lots known about capacity development, starting with Arturo Israel in 1987. Trouble is, as Sam notes, nobody bothers to inject the term with much meaning. Along with 'political will' it is the most over-used and least understood area in development.