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Putting Politics in the Picture

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published
11 January 2010

Jan VanheukelomTo maximise the benefits from aid and minimise the risk of doing harm, donors need to understand and take into account the partner country’s political and economic realities. To do this, a number of donors have decided to invest more energy in governance and political economy analysis, writes Jan Vanheukelom from the European Centre for Development Policy Management.

Why governance and political economy analysis?

Development is fundamentally a political process. It involves balancing interests, the distribution of power, the control over resources and so forth. Donors know that. But this knowledge is far too anecdotal, too intuitive.

A number of donors are investing time and energy in developing models to better assess or understand the feasibility of policy change and institutional reforms. That way, they hope to move from the intuitive and the anecdotal to deeper knowledge about the type of support that is likely to contribute to feasible change and longer-term development. They have started doing so at a country level, and gradually also at sector and sub-sector levels.

The European Commission, at the invitation of the UK’s Department for International Development and together with other donors active in this field, took stock of experiences on sector governance and political economy analysis at a recent London workshop. Participants explored opportunities for more effective cooperation and compared notes, analytical tools or frameworks and experiences. They looked for ways to make the governance and political analyses more operationally relevant. The Overseas Development Institute produced a comprehensive report with all relevant studies, PowerPoint presentations, tools and cases that were presented.

An over-view of the workshop can be found here. To access the related documents and download all the workshop presentations, follow this link.

Though governance and political economy analysis is a fairly young ‘discipline’ among donors, it is gradually demonstrating its relevance to aid practitioners. Some have experience with analysis of governance and political economy at country level. These include, for example, DFID’s Drivers of Change and the Dutch Strategic Governance and Corruption Analysis. Such country assessments cover the ground, and contribute to a better understanding of the political context in which donors operate. Yet, these countrywide diagnostics triggered new questions, often about their operational relevance. In order to solve these questions, the attention shifted from the country level to the level of a particular sector, and to specific problem areas.

The emerging set of governance and political economy frameworks and approaches all have similar characteristics. All try to capture the rationale behind the nature of power and political behaviour in partner countries, in a particular sector or sub-sector. In order to do so, they map key stakeholders, and study their interests and the incentives that influence their decisions. The analysis frameworks also look behind the surface of formal institutions (elections, rule of law, norms, etc.) and the political rhetoric (about democracy, development, growth, etc.). They focus on less formalised and visible arenas because that is where political, economic and social influence and power often play out. A deeper understanding of values, ideology, religion and cultural beliefs can also be highly relevant. These factors often help identify factors and actors that may determine the fate of drivers or obstructers of reforms. Donors involved in this work also share a concern to make these frameworks as operationally relevant as possible. So they focus on how the analyses and assessments can address strategic and operational concerns in the field.

Experiences so far

Governance Workshop, Jan VanheukelomGovernance and political economy analyses have already demonstrated their added value. They have helped explain why specific reforms have worked or have not succeeded. In certain countries such diagnostics have informed the (re-)design of donor country or sector strategies. Indeed, they can help to identify what strategies are more likely to work. The insights such work generates may inform donors on the choice of aid modalities and the partners to engage with. Typically, such diagnostics provide information about key stakeholders that influence sector performance, on the power they hold, and the constraints and incentives that drive their policy choices. Political economy analysis can help appreciate the risks of using (or not using) country systems, but also can help understand what type of flanking measures may strengthen checks and balance institutions or may create incentives for collective action by demand side actors. Political economy diagnostics is used to inform and calibrate the policy and political dialogue with partner governments.

The case of the Urban Bus Operations in Dhaka, Bangladesh, illustrates well the shifts in donor approach that such an analysis may inform and trigger. The political economy analysis of transport in Dhaka clearly pointed to the risks involved in disproportionate investments in hardware such as busses. Subsequently, this component was scaled down. The forces in support of the status quo (poor services, corruption, connivance between political elites, bus owners and their association) were simply too strong. Therefore the donor programme shifted its attention to institutional strengthening and consensus building components, as well as to new stakeholders such as civil society and media. From a supply driven and technocratic orientation, the support programme shifted to a more politically informed disposition with a stronger emphasis on process ingredients (such as facilitation, brokering, information sharing, and consensus building) and emphasis on demand-side stakeholders (civil society organisations including watchdog organisations, media, etc.).

The tools presented at the workshop all include the analysis of regional and global drivers for poor governance. Such influences have to be understood in order to tackle or mitigate their impact (through initiatives such as Extractive Industries Transparency Initiative, Forest Law Enforcement and Governance Trade Action Plan Transparency, UNCAC, etc.). All frameworks point to the need to look into how donors affect domestic accountability relations – in either positive or restrictive ways. In that respect, it matters that external actors do not simply produce a once-off product, but that they conceive of such analysis as a process to continuously sharpen and broaden the governance and political economy knowledge base.

‘So what?’ – Difficulties to overcome and the way forward

The analytical tools and the practices may have proven their usefulness. Still, new questions and challenges arise. To development practitioners and sector specialists, the usefulness of such additional analysis is not always clear. They often fear that such analysis adds a layer of complexity and reflection, rather than solving practical problems and leading to action. Moreover, the dominant business model in the aid industry usually does not recognize the central place of politics in development. The donor push for demonstrable results and visibility does not sit easily with a process approach that focuses on feasibility rather than on blueprint ideals. Hence, proponents of a better understanding of governance mechanisms and political economy will have a hard time to demonstrate the added value of this work. It will also be difficult since some of the findings of the research are counterintuitive, only visible over time, and sometimes about doing less with more human resources.

In undertaking such research, external actors have by and large made use of their own human resources, expertise or sub-contracted the work to specialised organisations in donor countries. Participants at the workshop agreed on the need to strengthen domestic capacity and to ensure a shift in ownership of planning and undertaking such governance and political economy diagnostics. The DAC guidelines on assessing governance point in that direction. These guidelines encourage donors to build on and strengthen domestic capacities for assessing and debating governance issues (typically involving a range of actors including civil society, watchdog organisations, media, academia, and checks and balance institutions).

The London workshop participants agreed to:

  • share operational guidance and knowledge and strengthen the evidence base
  • strengthen the ‘community of practice’: expand training and on the job support with a focus on in country learning and sharing
  • expand the experience in sectors and agencies

EuropeAid is exploring ways to translate and ‘operationalise’ its generic governance analysis framework to specific sectors. It also seeks to integrate the model and experiences in learning/training events, and to strengthen the ‘community of practice’. Such training is already taking place within and among donors. Professional advisors and programme managers for DFID and other development agencies participated in two well balanced and practice oriented workshops in Mozambique and in Nepal. The course providers are Policy Practice (www.thepolicypractice.com) and Overseas Development Institute (www.odi.org). And more training will take place in 2010.

Political Economy Tools and Guidance

There are three recent how-to publications that underpin the interest in political economy analysis. The EC’s Reference Document 2008 on Analysing and Addressing Governance in Sector Operations fits in this expanding list of sector specific tools. Capacity4dev.eu has already presented the EC analysis framework on sector governance.

  1. Problem-Driven Governance And Political Economy Analysis. Good Practice Framework. September 2009, The World Bank, PREM, Verena Fritz, Kai Kaiser, Brian Levy

    The authors start by admitting that for a long time, the World Bank has been uneasy with politics and political economy diagnostics. Yet, there is now a stronger emphasis on the need to understand and analyse the political economy context of reforms. The Good Practice Framework synthesises the lessons and experiences in its diagnostic work on corruption, governance and political economy analyses. This framework seeks to contribute to develop tools and practices in support of smarter, more realistic and gradual reforms in developing countries. While directed primarily at the bank, the good practice framework is useful beyond this audience, and the tools are largely in line with or complementary to the ones the EC developed.

    The Good Practice Framework also presents an overview of key concepts, and deals with the following questions in a nuanced and accessible way:

  • How can analysis be translated into action?

  • What level to choose for the problem driven governance and political economy analysis? The country level, the sector or the project level?

  • How to build stronger evidence and case material?

  • How to get the process for analysing and addressing governance and PE right?

  1. In its series of How to Notes, DFID has produced a special Political Economy Analysis issue which summarises well the main experiences of conducting political economy analysis within DFID, and their main tools and approaches.

  2. Analysing and managing the political dynamics of sector reforms: a sourcebook on sector-level political economy approaches, David Edelmann, Working Paper 309, November 2009, ODI

This sourcebook provides a user-friendly overview of most sector-level political economy approaches and the tools itself, including the EC’s sector governance framework. It also provides some comments on strengths and weaknesses. For those who want to take the sector-level political economy forward, there is an overview of theories that can be helpful. The sourcebook ends by providing ten recommendations on how to improve the sector-level political economy approaches.

 

DISCLAIMER: This information is provided in the interests of knowledge sharing and capacity development and should not be interpreted as the official view of the European Commission, or any other organisation.

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