Governance and Capacity Building are closely related to each other. Indeed, well-established State regulatory institutions are the pre-requisite for a sustainable and pro-poor growth. Privatisation, deregulation and trade liberalisation by themselves cannot guarantee economic development while maintaining adequate standards of social protection for the most vulnerable groups. Therefore, efficient and transparent political institutions are generally recognised as a crucial condition for achieving positive outcomes in both social and economic development. One of the reasons for poor institutional management is the lack of technical capacity and specific training. Thus, provision of resources and technical assistance is fundamental to enable institutions to perform effectively by aligning national practices with relevant international standards. Consequently, capacity-building and governance-related targeted investments represent important focus areas both for Ethiopia and the donors’ community.
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