This article examines the availableevidence about training as an instrument of capacitydevelopment and asks whether it works and under whichconditions it is most optimally pursued. The first part ofthe paper considers evidence from the World Bank and otherinternational donors, which spend considerable sums ontraining in developing countries. The second part of thepaper looks at the record of private sector firms to seewhat can be learned from company training programs, whichhave tended to be better documented and followed from acost-effectiveness standpoint. The article then considerswhat conclusions from the private sector can help us towarda better understanding of the optimal conditions fortraining in a development context.