Organization building and institution building are often used interchangeably because their boundaries blur. Institution building involves broader capacity activities that attempt to address how organizations function within society, how they identify and solve problems, how they encourage changes in patterns of behaviour and values in society, and how they build support for their priorities and concerns, in other words, promoting social change. Institution building eventually took over from organization building as the dominant term, and capacity building is now starting to take over as the umbrella which describes them both. Up to the 1970s, there was a slight change in terminology from institutional building to institutional development. Building implied there was nothing there in the first place, and by failing to acknowledge existing systems, infrastructure, and ways of doing things, was seen as insulting and arrogant.
Development implies improving existing structures.
In sum, up to the 1980s, technical cooperation was aid agencies dominant contribution to institution building, and most of it was really only organizational development. The dominant model for technical cooperation was the expert-counterpart model. Generally, this approach failed. It was expensive and the salary differentials caused resentment and tension. Despite the mission to train and hand-over, the level of training was too abstract for new skills to be retained once external guidance had ceased.