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Shocks and stresses often manifest in complex ways and across a range of local, regional, national and international levels. The abilities of people, households, communities, and institutions to manage the impacts of shocks and stresses are underpinned by several factors. In order to promote development gains under uncertain, high-risk conditions, it is important to consider which of these factors matter, for whom, and at what level.

Resilience capacities represent the potential for proactive measures to be taken in order to deal with shocks or stresses. In a resilience Theory of Change (ToC), capacities can be represented at the output level. As shown in Figure 1, capacities can be developed, supported or strengthened by program activities, and then contribute to effective responses to shocks and stresses. If the ToC holds true, then these responses enable people and institutions to achieve and maintain gains in well-being, despite exposure to shocks and stresses.