We know what works in capacity development: a succession of studies from official agencies, academics and NGO practitioners have all highlighted similar principles of good practice. But the evidence also suggests that there is a distressing dissonance between what international development agencies know about capacity development and what they implement. This article explores the reasons for this failure. It highlights constraints that arise from the changing aid context and from a lack of resources and skills. Ultimately, however, it concludes that capacity development is driven more by self‐interest than by knowledge of what works. Until agencies' pride, greed and self‐interest can be restrained, much capacity development will continue to be disappointing and ineffective. But if agencies combine existing professional knowledge with virtues of humility, patience and a genuine commitment to others, then capacity development becomes something that can bring transformation.