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Many capacity development interventions have been driven by the needs of technological innovation rather than the needs of institutional innovation. However, this article argues that the global challenges of the twenty-first century call for institutional innovation that entails a very different dynamic of the relations within society. Changing institutions, be it related to societal norms and values, government policies, market incentives, political systems or organisational processes, requires the 'soft' capacities of communication, trust building, diplomacy, networking, making sense of messy social situations, political advocacy and leadership. The article concludes by outlining four specific capabilities required for institutional innovation: navigating complexity, learning collaboratively, engaging politically and being self-reflective. 47In other words, it is about 'governance' -the ability of a society to organise itself and manage its affairs for the greater collective good. And this requires institutional innovation. The article will explore institutions, not as organisations, but as the formal and informal social rules that structure social relations (Giddens 1984;Hodgson 2006; North 1990: 3; Ostrom 2005: 3). The argument here is that our modern societies have become much better at technological innovation than at institutional innovation, and environmental sustainability, social justice and coping with the massive demographic change the world is experiencing, hinge on rapid institutional transformation (Held 2004;Milbraith 1989). Governance is the mechanism for deliberate institutional reform. Hence, institutional innovation becomes critical to a wider understanding of capacity development and its link with governance.Thus, capacity development becomes a political exercise. Further, difficulties with effective governance mechanisms and limited attention for institutional innovation are far from just an issue for the 'poor South'. They are critical issues for global development in the broadest sense (Beck 1997;Giddens 1990Giddens , 1994 Goldblatt 1996). Whether we look at climate change, natural resource degradation, poverty, terrorism, unsustainable food systems or health issues, the early part of the twenty-first century will have to be a time of fundamentally reassessing how, as nations and a global community, we govern ourselves. Consequently, the first part of this article will look at capacity development from a broader perspective of global development.Social systems and the institutions they embody are inherently complex. Essentially, people and their organisations are not predictable in the way that natural phenomena are. If we are to talk about developing capacities for better governance and for changing outmoded, unjust or unsustainable social institutions, we have to come to terms with complexity. The third section will provide a framework for understanding complexity and will discuss the implications for capacity development.Finally, the article will look at four areas of capaci...

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The future wellbeing of billions of rural people is interconnected with transforming food systems for equity, nutrition, environmental sustainability, and resilience. This article tackles three blind spots in the understanding of rural poverty and vulnerability: the narrow focus on extreme poverty and hunger that hides a much wider set of inequalities and vulnerabilities, insufficient recognition of the diversity of rural households, and an inadequate appreciation of the impact of rapid structural changes in markets, the physical environment, and the political economic context. A better understanding of these areas is necessary for imagining a new policy landscape that can align progress on rural poverty alleviation with a wider transformation of food systems. The article provides a framework for assessing the dynamics of rural wellbeing and food systems change. It looks at the viability of small-scale farming and the diversification of livelihood options needed to overcome rural poverty and inequality. The analysis suggests that the future prosperity of rural areas will depend on policy reforms to address market failures in the food system, which currently work against equity, good nutrition and sustainability. Investments will also be needed to enable rural economies to capture greater value from the food system, particularly in the midstream of food distribution, processing and services. The likely future scale and nature of rural poverty and inequality is such that improved social protection and humanitarian relief schemes that support those in crisis or being left behind will still be essential.