Increasingly, we live in a world of networks. This is having a profound impact on the way we organize at local, national and international levels (Church et al, 2002). The growth of networks as an organizational form is widely seen as a response to an increasingly complex and inter-connected world which has spawned an array of arrangements for collaboration among actors with similar or shared interests. The network revolution has been fuelled by rapid advances in information and communications technology (ICTs) which has opened up new possibilities for information sharing and cooperation. The impact of these changes has been felt in many domains, including the field of international development where networks have become a significant force, bringing together diverse actors to address a range of development challenges. With this revolution comes the task of developing new ways of thinking and new tools to better understand and deal with the opportunities and challenges associated with networks as an organizational form. Networks have existed for millennia, bringing together the poor and marginalized, agriculturalists, political groups, academics and researchers, among others. Their existence has served to underpin and strengthen relationships in societies and promote social capital. In contemporary society, networks exist in diverse forms linking individuals and organizations with a shared interest in exchanging ideas, generating knowledge or mobilizing capacity for collective action. Development practitioners have increasingly recognized the value of connecting actors through networks, or other types of collaborative arrangements, as a way of addressing development issues. This is reflected in the growing literature on development networks and on related themes such as partnerships, program-based approaches and governing by networks1 . What has been much less explored in the development literature is the link between capacity issues and networks. Much of the enthusiasm about networks in civil society organizations, governments and international development agencies is rooted in a belief that the capacity of networks is somehow greater than the sum of its parts. The basic assumption is that networks can mobilize or generate capacity and have an impact on change processes which is greater than that which could be achieved by individuals or organizations acting alone. The suggestion, in other words, is that in networks 1+1> 2. Despite this prevailing enthusiasm about networks, there is a concern that the conceptual frameworks and approaches used to analyze and support capacity development in networks, which are drawn substantially from the organizational development literature, are inadequate for understanding and making choices about intervention strategies and for evaluating capacity in networks. The purpose of this paper is to: (1) contribute to the conceptual understanding of capacity and capacity development in relation to networks: what distinguishes networks from other organizational forms; what capabilities are needed to make networks work effectively, and how these capabilities develop over time. (2) explore some of the implications for addressing capacity issues in networks, including choices of intervention strategies. This is one of five theme papers prepared under the European Centre for Development Policy Management’s (ECDPM) study on Capacity, Change and Performance2 . A draft of this paper was prepared drawing on the existing literature on networks and capacity development, as well as several case studies of successful network experiences undertaken in the context of the broader ECDPM study. The draft paper was then presented as a discussion document at an ECDPM workshop, co-sponsored by SNV and UNDP, in The Hague (September 20, 2005). The workshop brought together practitioners with a broad range of network experiences in different contexts and with an interest in capacity issues.3 The authors are indebted to the workshop participants whose insights and feedback contributed to enriching this paper conceptually and in making it relevant to practitioners.