Why does Political Economy Analysis Matter?

Understanding who the stakeholders are, what they have to gain or lose, and how to engage them in the development process all matter in making an intervention successful.

Evaluation is often known as a way to determine what has worked and what has not, and, of course, for the ratings that follow from such an analysis. Evaluation is also key to finding explanations as to why things are happening, or not. That is how evaluation can inspire learning and signal when course corrections are necessary. 카지노사이트

So what does this have to do with political economy analyses?

Regular readers of our evaluations will have noticed that political economy plays an incredibly important role in our search to explain why things are working or not. In simple terms, political economy takes into account the roles played by different stakeholders; specifically, their interest in­­- and political power over- decisions. The effects can be far-reaching and undermine development efforts and their outcomes.

In a recent paper, we reviewed whether and how political economy analyses affected the outcomes of policy lending. The positive effects were clear: understanding who the stakeholders are, what they have to gain or lose, and how to engage them in the development process all mattered in making an intervention successful.

More often than not, analytical work done at the planning stage tends to focus on technical issues. These are incredibly important, but they are not sufficient. A reform proposal can make technical sense, but if it is perceived to threaten the interests of a particular group- or does not take into account the needs of another- the most technically-sound proposal might falter. For instance, from our work on the financial viability of the electricity sector, it was obvious that setting tariffs at cost-recovery levels is essential for the sector to function, but this course of action is politically sensitive and hard to implement. Understanding the political economy (together with the distributional effects of such changes) can make or break the success of the intervention. 안전한카지노사이트

Political economy analyses can also provide a platform for dialogue among stakeholders. The most successful cases involve broad-based consensus building through transparent processes. They build ownership where different points of view are understood and the best possible shared solution is developed. In successful cases, political economy analysis can make implementation easier, because the potential bottlenecks are anticipated and addressed ahead of time. This is particularly so if the analysis provided the aforesaid platform for dialogue and it was used to build broad-based ownership.

An important shift is needed when undertaking political economy analyses to focus specifically to the set of intended interventions. More often than not, analyses are generic for a country as a whole, but not tailored to the situation, issues, and stakeholders that will be concerned with the intervention. Once the specifics are understood, the key to success lies in understanding how the alliances among stakeholders – that already exist or that can be forged from common interests – can support the needed policy changes. For instance, in another review we did on environmental policy loans we found examples where government and industry interests could be brought together around the need to provide greater clarity of regulations rather than lower the bar for environmental standards.

On the other hand, political economy analyses can be highly sensitive. When a few influential stakeholders have strong interests, undertaking or publishing a political economy analysis can be difficult- if not impossible- and potentially counterproductive. In these situations, informal analyses are better suited to help make informed decisions. For instance, we have seen projects that have been stopped, as under these circumstances the necessary reforms would not have been possible. 카지노사이트 추천

The ultimate question – which we have not answered in full – is why are political economy analyses not used more often, if they are a key driver of success and failure? It has been a question on my mind in particular in situations of conflict and fragility. Years ago in another role I was associated with an evaluation that highlighted the many political economy analyses that had been done for Southern Sudan (before it became an independent country) and that had gone unused. When strife broke out, it was in the same areas that had been flagged in both the political economy analyses and the evaluation. Could tragedy have been prevented if our analytical work had been heeded?

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