Political economy analysis

Political economy analysis


Examples of political economy analysis

Page contents:

Examples of political economy analysis

Wilkinson, E., 2012, 'Transforming Disaster Risk Management: A Political Economy Approach', ODI Background Note Series, Overseas Development Institute, London
This paper examines recent work by disaster researchers on the complex role of institutional arrangements in shaping policy decisions. It identifies incentive structures, information gaps and intra-governmental relations as key factors affecting the decisions of national and local authorities. It recommends more interdisciplinary research on political processes and policy change to develop a clearer theoretical focus for Disaster Risk Management, so as to help promote the necessary institutional transformation.
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Kent Eaton, Kai Kaiser, and Paul Smoke, 2010, 'The Political Economy of Decentralization Reforms: Implications for Aid Effectiveness', World Bank, Washington, D.C.
The analytical framework presented in this report offers a systematic approach to conceptualizing and examining the motives that drive politicians to transfer resources and functions to lower levels of government and lead bureaucrats to support or oppose reform throughout the implementation process. The framework aims to provide input into developing more suitable and attainable service delivery and poverty reduction objectives that take into account political and institutional obstacles and opportunities.
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Utomi, P, Duncan, A and Williams, G., 2007, ‘Nigeria - The Political Economy of Reform - Strengthening Incentives for Economic Growth’, The Policy Practice, London
How does reform take place within the constraints of political and economic processes? What has driven recent policy and institutional reforms in Nigeria, and how can Nigeria's reform process be sustained and extended? This briefing paper from the Policy Practice argues that the failure to achieve sustainable economic growth and poverty reduction in Nigeria is linked to institutional and incentive problems. Efforts are needed to strengthen incentives for economic growth and public accountability in Nigeria. All stakeholders must recognise the realities and risks to sustainable reform, as well as the long time-scale required.
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World Bank, 2008, 'The Political Economy of Policy Reform: Issues and Implications for Policy Dialogue and Development Operations', World Bank, Washington
How can donors improve the effectiveness of policy reform processes? This study from the World Bank addresses the political economy of sector reform in agricultural marketing, and water supply and sanitation. It uses a social analysis perspective to analyse stakeholder interests, incentives, institutions, risks and opportunities. Development agencies should undertake timely political economy analysis and establish a sustainable process for building broad coalitions. They should also promote transformative institutional change that includes empowering forms of bottom-up accountability.
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Jones, S., 2010, 'Policymaking During Political Transition in Nepal', Working Paper 3, Oxford Policy Management, Oxford
What lessons can be learned from political economy analyses of Nepal to inform a) donor strategies in that country and b) future political economy analysis in any context? This paper examines political economy studies, commissioned by DFID, on Nepal's agricultural, energy, health and police sectors. It finds that, while the short-term scope for donor influence on policy and institutional reform is likely to be limited, donors can act as a counterweight to rent-seeking and short-term political pressures. In addition, political economy analysis is most useful when it can inform specific decisions and existing processes, especially joint donor analysis and action.
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Fjeldstad, O.-H., 2009, 'The Pursuit of Integrity in Customs: Experiences from Sub-Saharan Africa', Chr. Michelsen Institute, Norway
Why have many anti-corruption reforms in customs in sub-Saharan Africa apparently not succeeded? This paper argues that the reforms have been too focused on formal institutions, and have paid too little attention to political economy issues and the role of informal institutions. Customs officers are often torn between compliance with abstract bureaucratic norms and the concrete expectations of their networks of social belonging. Accordingly, policy initiatives should focus more on reducing the possibility or attraction of favouritism versus acting in the public interest. This calls for anti-corruption efforts based on thorough political economy analysis.
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Hodges, T. and Tibana, R., 2004, 'The Political Economy of the Budget Process in Mozambique', Oxford Policy Management, Oxford
This paper examines the nature of the budget process in a highly aid-dependent developing country with weak institutions. It examines how the almost complete absence of domestic demand for improvements in the budget is due to deeply rooted structural features in the Mozambican context.
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Keefer, P., 2007, ‘Political Economy’, Section 4 in: Ghana: Meeting the Challenge of Accelerated and Shared Growth,  Country Economic Memorandum Ghana, Volume III: Background Papers, World Bank, Washington
What hinders growth-supporting policy reform in Ghana, and how can these obstacles be addressed? In recent years, Ghana has experienced relative macroeconomic stability and growth. However, accelerating and sustaining growth requires significant policy change across a range of areas. This extract from the World Bank’s Country Economic Memorandum of Ghana examines the political incentives of policymakers to pursue such change. Clientelism undermines progress in pro-growth reforms. Reform should focus on: education; improving the collection of and access to government information; and ensuring that policy does not favour particular ethnic groups.
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Hickey, S., 2006, ‘The Politics of What Works in Reducing Chronic Poverty’, CPRC Working Paper 91, University of Manchester
What forms of politics are most likely to reduce chronic poverty in developing countries? This working paper, published by the Chronic Poverty Research Centre, uses comparative case-study analysis to argue that a shift is needed in donor policy. Greater attention should be paid to political instead of civil society, to the link between political discourse and poverty analysis rather than simply to poverty data, and to the importance of political contracts in sustaining pro-poor policies.
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Mezzera, M. and Aftab, S., 2009, ‘Pakistan State-Society Analysis’, Democratisation and Transitional Justice Cluster, Initiative for Peacebuilding and the Netherlands Institute of International Relations, Clingendael, The Netherlands
What is the impact of deep structures, formal and informal institutions, and current events on the nature of the state in Pakistan and its relations with society? This report from The Initiative for Peacebuilding analyses the causes of weak state-society relations in Pakistan and explores the complex power dynamics that underpin them. Despite the bleak picture that emerges, a better understanding of the context can help the international community to engage with Pakistan on a constructive and long-term basis, with the overall objective of supporting genuine democratisation and building substantive citizenship.
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Sundet, G., and Moen, E., 2009, ‘Political Economy Analysis of Kenya’, Discussion Report No. 19, NORAD, Oslo
How can donors contribute to governance reform in Kenya? What role can they play in strengthening state-society relations in particular? This report makes recommendations for Norway’s strategic approach to governance in Kenya based on a political economy analysis of the country. More focus on state-society relations is needed, particularly at local government level. Systematic learning, analysis and social dialogue should also be emphasised.
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Kelsall, T., 2009, ‘Game-theoretic Models, Social Mechanisms, and Public Goods: A Methodological Discussion’, Africa Power and Politics Programme Discussion Paper No. 7, Overseas Development Institute, London
How can empirical research be used to build policy-relevant theory about governance and development? This paper reflects on the Africa Power and Politics Research Programme (APPP), arguing that contextually modified concepts from game theory can help explain development outcomes. There is little in the literature or initial fieldwork results to suggest that mix of governance modes itself is a key driver of better and worse public goods provision. The drivers seem instead to include: (1) game-like mechanisms; and (2) structural-institutional factors. Pre-fieldwork theoretical reflection should be combined with intense periods of empirical observation, analytical modelling and cross-case comparative theory building.
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Further resources:

Drivers of change country studies