This examines three aspects of institutional capacity: (a) institutional capacity to manage risk effectively and build resilience at multiple scales, (b) the circumstances under which political will is created and policy reform takes place and (c) different types of risk governance regimes in the region. In some countries and places, risk management programmes have been effective in building capacities that help to increase community resilience (UNISDR 2004), but many fail to deliver expected benefits due to lack of commitment and resources and/or a focus on elite interest groups rather than the broader community, often at the expense of its most vulnerable members (Lavell 1994; Maskrey 1994; Rossi et al. 1982). Major disasters can promote reform, by exposing the failures of existing risk management policies, although these ‘policy windows' can also be opened up by other events and processes, such as political reform and convincing evidence (Birkland 1997, 2006; Kingdon 1995). Little is known however about the circumstances under which this occurs in the context of managing disaster risks and whether lessons learned and policy changes are sustained. This makes it difficult to promote appropriate institutional reforms and policies to build resilience. Institutional capacity can be divided into and measured at three different levels: micro, meso and macro. The micro level refers to the capabilities of individuals within a group or organisation; the meso level, to organisational aspects such as management systems; and the macro level, to the broader economic, political and social context within which organisations operate (Rosas 2008).

Key research questions guiding work on institutional capacity include:

On the institutional capacity to manage risk effectively and build resilience at multiple scales in the context of volcanic risks: (a) What are the ingredients of institutional capacity for managing volcanic risk at micro, meso and macro scales? (b) What are most effective indicators of institutional capacity recognising that volcanoes can present a range of hazards with complex magnitudes and frequencies? On the drivers of policy change and how policy windows open and are used to invest in resilience building (a) In the absence of a disaster, what combination of factors may allow a policy window to open and political will to be created, presenting opportunities for resilience building to reduce disaster risk?(c) What institutional capacities need to be in place to enable major advances in resilience building when policy windows open? On types of risk governance regimes: (a) How do (power) relationships between scales of governance vary across the case studies and how does this affect different aspects of risk? (d)What type(s) of governance regime(s) are most conducive to building resilience?

Work Package 4 uses a political economy perspective to analyse existing institutional capacities and incentives to build resilience. It looks at the interaction of political and economic processes in society, including the distribution of power and wealth between different groups, and the processes that create, sustain and transform these relationships over time (Collinson 2003). The analysis will take place at different scales, adopting a ‘bottom-up' approach that seeks to link local capacities and processes to the wider political and economic environment at provincial, national and international levels. These institutional relationships and processes will then be compared across the three case studies to explain variance and find patterns and relationships (Øyen 1990).