The new local governance and capacity-building: a strategic approach: examples from Africa, Asia, and Latin America

International aid agencies nowadays tend to emphasise good governance as a condition for their investment in developing countries. Putting the concept into practice is a daunting challenge for local governments in these countries. This article points out that even when good governance is highlighted in government and public administration, it will not occur unless and until local governments are committed to the principle and have improved their capacity for governance. Both governance and capacity-building concepts are discussed and examples are offered of how local governments have tackled problems such as those relating to decentralisation and local accountability, governance structures, leadership, and participation of stakeholders. Addressing the concern for local capacity, it argues that strategic planning and management (SP/SM) are potential tools because they hold the key to capacity-building for sound governance. Local governments go through a learning process in undertaking SP/SM. SP enables local governments to manage the organisation and its future direction in relation to its environment and the demands of external stakeholders. SM guides local governments in developing and managing the organisation's capacity to assess and adjust the fit between its mission, environment and operations.