This article addresses the linkages between administrative capacity and local government reform. Administrative capacity is essential to the reform and state functioning, but it is only part of this complex vision and can not by itself deliver the expected results from a modern administration perspective. The goal of administrative capacity building at local government level is to improve management in local government by substantiating resource planning, setting goals, activities and procedures that ultimately provide citizens with services and utilities to quality standards and facilitate local economic and social development processes.