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Capacity development, that is “the process whereby people, organisations and society as a whole unleash, strengthen, create, adapt and maintain capacity over time” (OECD 2005) has been a key aim of international aid programs. However, capacity development efforts have not met with resounding success despite approximately 25%, or USD15 billion a year, being spent by donors in recent years on technical assistance1 which has predominantly been aimed at developing capacity. A 1998 review by the World Bank (World Bank 1998) found that the success rate for capacity development efforts was between 30 – 40%. The Commission for Africa (2005) noted in 2005 that achievements were below expectations. The OECD (2007) sees capacity development as being one of the areas which are least responsive to development assistance and therefore one of the greatest challenges. This paper proposes that development practitioners and donors could benefit from taking an evaluative inquiry-type of approach to the design, implementation and monitoring and evaluation of capacity development programs. An alternative approach, “adaptive management”, is proposed. Adaptive management moves away from a rational linear A + B = C approach to capacity development towards constructing and testing theories of change2 for knowledge generation, adaptation and program improvement.