POLITICAL ECONOMY ANALYSIS Tilitonse Guidance Session GoC 2 Dr. Henry Chingaipe Institute for Policy Research & Social Empowerment (IPRSE) henrychingaipe@yahoo.co.uk iprse2011@gmail.com
Session Outline Defining political economy analysis Key elements in PEA for project formulation Levels of PEA The importance of PEA in development interventions Stakeholder Analysis
PEA: What is it? An approach for analysing development problems and formulating development interventions that recognises the primacy of politics and the significance of economics in shaping development outcomes successes and failures. PEA situates development interventions (your projects) within a framework of the prevailing political and economic processes in society It focuses on power, resources and opportunities - how they are distributed and contested in different country and sector contexts, and the resulting implications for development outcomes It is concerned with incentives, relationships, distribution and contestation between different groups and individuals all of which greatly impact on development outcomes.
Elements of PEA Distribution of power, wealth and opportunities between different groups and individuals, duty bearers and rights holders that are involved or affected by a programme or policy Political processes i.e. cooperation, bargaining, and conflict that create, sustain and transform relationships over time and allocate resources, rights and obligations. Institutions i.e. rules, formal and informal and values that underlie the distribution pattern and the political process.
Elements of PEA Cont d The resources at stake for which inclusion, accountability and responsiveness are necessary The actors involved (both on the supply and demand sides) of the development problem targeted The interests of the various groups or actors and whether they will be for or against change. Strategies for building developmental or reform coalitions, identifying change agents and forging political settlements
Politics Should not be narrowly understood as ndale i.e. Kutcherana. Politics should be understood as all the activities of cooperation, negotiation and conflict, within and between groups of people or societies, whereby people go about organising the use, production or distribution of resources to further their own interest Thus, what is political concerns the distribution, exercise and consequences of power which is at the core of cooperation, negotiation and conflict-making or conflict resolution processes. Achieving inclusion, accountability and responsiveness entails a redistribution of power through institutional change
Institutions In PEA institutions are understood as rules of the game or the ways of doing things in society Conceptually different from organisations Institutions are understood as rules created by people to govern their regular political, economic and social interactions. These institutions underlie the distribution pattern and they structure incentives for actors in political, social or economic activities
Institutions a typology Institutions can be formal and explicit i.e. rules and procedures that are created, communicated and enforced through channels that are widely accepted as official e.g. Constitutional provisions, Acts of Parliament, Public Appointment guidelines, Programme Rules such as LDF, CDF etc. Institutions can be informal and implicit i.e. rules that are socially shared, usually unwritten, and are created, communicated and enforced outside officially sanctioned channels.
Institutions a typology cont d They include traditions and customs, values, cultural practices and other norms of behaviour that are treated as accepted ways of doing things Big finger appointments versus democratic elections Bulangete la a mfumu, Chamlomo Cultural values of equity versus programme rules e.g. LDF, FISP
Examples Rules guiding district allocation of LDF resources Formal: according to need, teacher/ pupil ratios, teacher/housing ratio etc. Informal: equal sharing by constituency or more to those areas that voted for the MP Rules guiding selection of NICE board members Formal: Public advertisement, public nominations etc. Informal: Presidential appointments & prerogatives
Informal Institutions their significance Informal institutions give certain people or groups of people private forms of power, influence and benefits Informal rules operate behind, between and within the formal ones, hence substantially influencing how public power is used to make or prevent decisions that benefit some and disadvantage others (inclusion, accountability and responsiveness) The interaction between formal and informal institutions shapes incentives for different actors in different ways and affect inclusion, accountability and responsiveness in different ways requires grounded analysis. Patterns of governance at any level are shaped by effects of interactions between formal and informal institutions They affect formal institutions in different ways: complementary, substitutive, accommodating and competing
Institutions cont d There are four broad possibilities based on two dimensions 1. the degree of convergence between formal and informal institutional outcomes i.e.
Institions cont d Do informal rules produce a result substantially similar to or different from that expected from a strict and exclusive adherence to the formal rule? Different outcome implies divergence; similar or same outcome implies convergence
Institutions cont d 2. The effectiveness of the relevant formal institutions i.e. The extent to which rules and procedures that exist on paper are enforced or complied with in practice Effective high probability of sanctioning non compliance Ineffective low probability of enforcement
Interaction of formal and informal institutions Outcomes/effectiveness Effective formal institution Ineffective formal institutions convergence complementary substitutive divergence accommodating competing
Formal & Informal Institutions cont d Complementary: Shape behaviour in ways that do not violate the main formal rules and do not produce substantively different outcomes They enhance the efficiency or effectiveness of formal institutions
Formal & Informal Institutions Accommodating: They create incentives to behave in ways that change substantive effects of formal rules but without directly violating them They contradict the spirit but not the letter of the formal rule Often created by actors who dislike outcomes generated by the formal rules but are unable to change or openly challenge those rules Often helps to reconcile actors interests with existing formal rules
Formal & Informal Institutions Competing They structure incentives in ways that are incompatible with formal rules To follow one rule, the actor must violate another They trump formal rules, generating outcomes that are markedly different from those expected of formal rules
Formal & Informal Substitutive Used by actors who seek compatible outcomes with formal rules and procedures (like complimentary) Exist where formal rules are not enforced (like competing) i.e. They substitute formal institutions Exist where formal or state structures are weak they get by-passed.
Levels of Political Economy Analysis Macro- Country level Sector level Problem driven Project level
Country level Analysis focuses on the structures, institutions, processes and actors at the country-level Enhance general sensitivity to country context and understanding of the broad political-economy environment. This can be useful to inform country planning processes but also an overview to specific projects Sector level- What are the political, economic and social forces that drive or block policy change in specific sectors? e.g. water, agriculture, education, health The aim is to acquire better understanding and more effectively influence the political, economic and social structures, institutions, processes and actors determining the dynamics of sector reforms. to identify specific barriers and opportunities within particular sectors Problem/Project level Aimed at understanding a particular problem at the project level, or in relation to specific policy issue so that appropriate strategies can be taken.
Steps in a Problem level Political Economy Analysis: Linked to step 2.1 in the concept note form Reflection: Problem identification What is the problem to be addressed. -e.g. persistent corruption, continued food insecurity, inequitable allocation of development resources in the districts, role of chiefs in democratic governance... Institutional governance arrangements and capacities What are the associated institutional set-up and governance arrangements? Are they fit for purpose? Involves mapping of: relevant structures, ministries, agencies and their interaction, existing laws and regulations, policy processes Formal and informal rules driving the given issue How these interact to produce the challenges identified? Political Economy Drivers Why are things this way? Why are institutional and policy arrangements not being improved? This Involves analysis of: Stakeholders, their interests and incentives. Historical legacies and earlier reform processes Social trends and forces and how they shape current stakeholder positions and actions What can be done? What actions/interventions can be proposed?
STAKEHOLDER ANALYSIS A key component of political economy analysis It is about identifying actors who have power and influence to impact on your project for good or worse Who are stakeholders: People and/or organisations who are affected by a particular issue or who can influence the issue in any significant way Can be individuals, groups or categories of people and organisations who share a broadly common position and interest on the issue.
Doing a stakeholder analysis Best done with a small core group of people those able to think to a sufficiently high level of abstraction Participants should be familiar with the stakeholder analysis technique those present here! Participants should be familiar with the issue being addressed Maximise participation by writing on wall charts or flip charts
Stages in SHA 1. Ensure clarity on problem and intervention 2. Brainstorm all stakeholders 3. Analyse the stakeholders 4. Sort the results of the analysis 5. Select your targeted audiences/actors 6. Develop strategies of engagement with stakeholders
Stage 1 Ensure there is clarity on the development problem identified Ensure there is clarity on intervention proposed
Stage 2 Brainstorm all stakeholders which people or organisations are affected by the problem? Which people or organisations would be affected by or interested in the intervention? Get a long and comprehensive list! Accept all suggestions and write them down Don t discuss or criticise any idea until the brainstorming is over Keep the pace quick and the mood light-hearted Clarify the definitions of some of the stakeholders so that the description is specific You may need to divide some stakeholders into smaller groups or combine them into larger groups so that each group can be said to have a broadly common position and interest on the issue
Stage 3: Analyse stakeholders Assess each stakeholder using three basic questions using simple categories for answers: 1. How influential, relative to others, can the stakeholder be over the duty bearer or rights holders? High, Medium, Low. 2. To what extent does the stakeholder agree or disagree with your problem definition and proposed intervention? Strongly in favour; In favour; Neutral; Against; Strongly Against 3. How importantly, relative to the others, does the stakeholder view the problem, the intervention? High, Medium, Low Answer questions based existing knowledge of stakeholder attitudes and interests Tabulate results
Raw Results of SHA stakeholder Influence over DB/RH Attitude to problem definition /intervention Importance of problem/interventi on to stakeholder A H AA M B M N L C L P H D L PP H E M AA L Key: AA=very anti; A=anti; N=Neutral; P=pro; PP= Very pro; L=Low; M=Medium; H=High
Stage 4: Sort the results of the Analysis In order to make sense of the results, transfer them onto the Allies & Opponents Matrix The Matrix should be written on large wall charts with names of stakeholders in appropriate boxes according to the analysis set out in the table The vertical axis represents the influence of the stakeholder; the horizontal axis shows their attitude to your project The 3 rd dimension importance of your issue- to the stakeholder relative to the other issues they face, is represented by colour or symbol
Allies and Opponents Matrix High S/H B S/H C S/H E S/H I Influence of S/H on DB;RH Medium S/H A S/H F S/H G S/H J S/H K S/H L Low S/H D S/H H S/H M Very Anti Anti Neutral Pro Very Pro Attitude of the stakeholder to your project Importance of Issue: =High =Medium = Low
Strategies of Engagement From the Allies & Opponents Matrix, identify your most significant allies (High influence, very pro), Opponents ( High Influence, very anti) Neutrals (High influence, Neutral attitude) they are your battleground. Stakeholder groups are not fixed in their positions you can influence them to shift the balance of power and ideas in your favour Engagement strategies should aim at getting stakeholders into the top right hand corner and keeping them there!
Engagement strategies, project activities Key issue: how to achieve a shift in the balance of power and ideas Matrices provide some insights, e.g. for influential neutrals and soft opponents - Persuade them to agree with your position Potential allies with high influence but low interest persuade them that the issue is important Allies build alliances/coalition Allies with low influence help to increase their influence Opponents with high influence reduce the influence of the stakeholder Be realistic on how many stakeholder groups can be targeted
Importance of PEA to project success PEA can support more effective and politically feasible strategies, as well as more realistic expectations of what can be achieved, over what timescales, and the risks involved. PEA can focus attention on informal institutions, and cultural and social practices, which often explain why formal institutions do not work as intended. PEA generally cautions against relying on technical fixes, and assuming that formal institutions can be made to work through the transfer of international best practice PEA can help identify where change is most likely to occur and which types of reform will have the greatest pro-poor impact given prevailing interests.
Why is PEA important? Clearly identifies problem elements that have to be addressed Helps in making sure that root causes of the problem and not their symptoms are addressed PEA contributes knowledge about the major obstacles and opportunities surrounding the project. It is able to point to useful entry points for the project. We can begin to assess the kinds of change support which we might or might not expect to be effective in each case. Ensures that interventions do not just change players of the game but also the rules of that game...
It helps in the design phase to identify appropriate assumptions, and the means for engaging with different actors around the chosen issues. It provides clear implications of activities/interventions Realistic analysis of the balance of power for and against reforms Ultimately it gives a fair indication of the feasibility of the project
END of Presentation Thank you very much for your attention Comments, questions...