Heat the olive oil in a wide pot over medium-high heat. Once hot, add the chicken and diced shallot. Season with salt and pepper. Sauté for 12–15 minutes, breaking it up periodically while cooking. Once the chicken is cooked through, add the garlic powder and thyme and toss to coat.
Fry the capers:
Move the chicken to one side of the pot. Add another teaspoon of olive oil to the empty side of the pot. Add the capers and crushed red pepper, stir into the hot oil, and allow the capers to sizzle for about 30 seconds.
Toss to combine the chicken and capers.
Make the sauce:
Turn the heat to high. Once the chicken begins to sizzle, pour in the water or wine and lift anything stuck to the bottom of the pot. Add the tomatoes, balsamic vinegar, and sugar once the liquid begins to boil in the pot.
Reduce heat to low and simmer uncovered for 20–25 minutes, breaking up the tomatoes with your spoon as they cook. Taste and add salt, pepper, and more crushed red pepper to taste. Add a pinch more sugar if needed.
Cook the pasta:
Bring a pot of water to a boil. Once boiling, add a generous pinch of salt and the orzo. Cook according to package directions. Scoop out ½ cup of water and drain the pasta.
Finish the sauce:
Taste the sauce and add more salt and pepper if needed. Add the cooked orzo, basil leaves, and lemon juice and toss to coat for 1–2 minutes, adding pasta water as needed until the sauce is glossy and the pasta is well-coated. Taste and season. Turn off the heat.
To serve:
Spoon the pasta onto a large serving platter and garnish with more basil leaves. Enjoy!