To what extent can external technical assistance develop the capacity of counterparts, whether in government or in local nongovernmental organizations (LNGOs) in an aid-dependent economy? Cambodia's experience since 1993 suggests that most projects in such a situation are donor-driven in their identification, design and implementation, to the detriment of capacity development. Connected with this is the chronic underfunding of government in such an economy, which hinders implementation of projects and threatens post-project financial sustainability. Unless donors develop a coherent strategy (rather than competitive, project-related salary supplementation) to deal with this situation, the record of technical assistance in developing capacity will continue to be disappointing, and an escape from aid dependence will be postponed.
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