How can a ‘legitimacy lens’ enhance political economy analysis? This guidance introduces political economy analysis as a powerful tool for increasing understanding, and improving the effectiveness, of aid. It argues that consideration of state legitimacy can add value to such analysis by enhancing understanding of what citizens expect from the state, and of how those in control of the state can improve its standing among citizens. This approach to political economy analysis is especially appropriate to situations of fragility.
Political economy analysis is about power and interests. It considers social and political processes as the outcome of struggles for control over resources and positions. It encourages donors to think not only about what to support but about how to provide support and to recognise the limits of their ability to shape other societies.
Types of political economy analysis include country-level analysis, sector-level analysis, and problem-driven analysis. The latter aims to help understand and resolve particular problems at the project level or a cross-cutting policy issue. It includes mapping the institutional and governance weaknesses that underpin the problem and identifying drivers that constrain or support progressive change.
Adding a ‘legitimacy lens’ to political economy analysis can help donors to better understand state-society relations and statebuilding, providing a deeper and more relevant analysis of the preconditions for development. It is important to consider the following:
- The four main sources of state legitimacy: 1) input or process legitimacy (agreed procedures through which the state makes binding decisions and organises people’s participation); 2) output or performance legitimacy (the quality of services provided and the effectiveness of service delivery); 3) shared beliefs; and 4) international legitimacy.
- The relationships among these different sources of legitimacy: some are mutually reinforcing, while others can be contradictory.
- The distinction between the state and the government. If the interests of a particular government are not served by strengthening state institutions, it is unlikely to attempt statebuilding policies.
- In fragile contexts, people’s perception of the state and their acceptance of laws, regulations and policies may vary widely. What may bolster state legitimacy with one group in one area may undermine it in others.
- External actors can both enhance and undermine the legitimacy of fragile states.
Questions to be answered when preparing to conduct political economy analysis include:
- What is the purpose of the exercise (better strategy, policy, programming)?
- Is the timing right, and is the length of the process proportionate?
- Who is the owner of the exercise? Is there sufficient buy-in to the importance of the analysis?
- What mix of skills and expertise is required to undertake the study? Will it be conducted in-house? Is partner country expertise available?
- To what extent can existing data/material be used?
- Will donor and country partners be involved?
- How will the work be disseminated? Will it be available to the public?
- What follow-up will be needed once the study is complete?
