Document Library

Key Text Making the New Political Economy Perspective more operationally relevant for development agencies

Author: G. Williams, A. Duncan, P. Landell-Mills
Date: 2007
Size: 7 pages (131 KB)

Access full text: available online

Summary

How can donors more effectively put into practice the principles of the New Political Economy Perspective (NPEP)? This policy brief from The Policy Practice addresses questions of donor legitimacy, underlying principles, and aid programming in relation to this new analytical tool. Rather then seeking to influence governments directly, donors should help to strengthen the accountability of governments to their own citizens. Donors therefore need to address the system of incentives and restraints that affects key change agents.

While donors have tried to avoid the appearance of interfering in domestic political processes, the influence that development assistance brings is unavoidable and, in many cases, necessary for ensuring aid effectiveness. Rather than seeking to sidestep these ethical issues, donors should embrace the need for constructive engagement with their recipients.

The most appropriate role for donors is to help create an environment for constructive state-society relations. Previous efforts to directly influence government through financial leverage and conditionality have largely proven ineffective. Donors should therefore concentrate their efforts on influencing citizens and interest groups to effect change through four main activities:

Make information available and promote greater transparency in government
Strengthen vertical accountability mechanisms by working to improve the effectiveness of parliaments and civil society organisations
Strengthen horizontal accountability mechanisms by working to improve the effectiveness of judiciaries, parliaments, and audit agencies
Strengthen democratic processes, such as elections, to ensure voice and accountability

Embracing the principles of the NPEP requires donors to be less dogmatic in their approach to reform and more willing to adopt a long-term perspective for development. Donors must also recognise that each context requires a different approach, requiring knowledge of the political economy of the recipient country. Incorporating NPEP into aid policy will require some key shifts in approach:

Conditionality in aid has in the past been inconsistently applied and often counterproductive. Donors should change to a more flexible policy of adjusting aid levels according to progress in governance reforms.
Donors should move away from their preference for direct government aid and focus instead on 'change agents' such as civil society organisations, the media, and diaspora communities.
Poverty reduction strategies should also involve non-poor actors, who can be instrumental in opening political space and promoting reforms.
Regional organisations should receive more support for their efforts to construct mutual accountability mechanisms.
Aid instruments should be selected based on context-specific information, reducing the likelihood of unintended political effects.

If aid is to be effective, there is no alternative to a careful and long-term approach to development, based on in-depth understanding of the political context and incentive structures of the actors involved. Donors must work together, share analysis, and jointly support initiatives to strengthen governance and accountability worldwide.

Access full text: available online

Source: Williams, G., Duncan, A., and Landell-Mills, P., 2007, 'Making the New Political Economy Perspective More Operationally Relevant for Development Agencies', The Policy Practice, London
Author: Gareth Williams , gareth.williams[at]thepolicypractice.com
The Policy Practice, http://www.thepolicypractice.com/