Capacity development is a major challenge. Technical Cooperation and various forms of capacity building have absorbed substantial funds over many decades. While a few countries have done well, donor efforts in many countries have produced little to show in terms of sustainable country capacity. This contrast between the importance of the challenge and the difficulty of meeting it is what stimulated the preparation of this paper. The paper draws on a large volume of documented experience provided by bilateral and multilateral donors and academic specialists. It is mainly concerned with capacity and performance in the public sector, but private sector experience is drawn on where relevant.