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This working paper reflects on the context in which KSI is working and provides a ‘benchmark’ against which to measure progress. It focuses on four areas: the capacity of policy research institutes (PRI) (especially 16 that were selected on the basis of organisational and research capacity); the capacity of policy makers to acquire and use research knowledge; systemic factors that shape the production and use of research knowledge; and the level of engagement in certain ‘knowledge communities’ (namely village development, research and higher education, and bureaucratic reform).