Description: This paper is one of the Theme Papers emerging from the ECDPM Study on Capacity, Performance and Change. It reviews the donor and practitioner literature, and innovations in M&E aspects of public sector and NGO capacity and capacity building in developing countries from both results-based management (RBM) and systems thinking perspectives. It synthesises evidence from most of the cases prepared to date, and relates this evidence to the literature. It then draws conclusions and raises questions.