The last decade has seen an explosion of interest among operational development organisations in more and better ways of understanding the countries and sectors in which they operate. Aware that their efforts have often been compromised by ill-informed or unsophisticated assumptions about country context, agencies from the World Bank to local NGOs have been convinced that what they need is applied political economy analysis.
One upshot of this interest has been a proliferation of acronyms and labels representing particular agencies’ first efforts in this area. This has created the appearance of a complex and highly diverse field of activity. The wide range of concepts and frameworks in use can be offputting to practitioners who are not yet familiar with the field. In reality, however, the differences among the frameworks are limited to small variations around a common analytical core that guides users to investigate how power is exercised, how decisions are made, and how incentives and disincentives are brought to bear on specific organisations and individuals. The labels do not matter and, for most practical purposes, the diversity of available frameworks is unimportant.
Five things are more important:
- Different models for integrating political economy analysis into operations.
- How political economy exercises vary in scope and purpose.
- The appropriate timing of political economy work.
- Defining quality and the necessary skills and expertise.
- Achieving and monitoring uptake into programmes.
Regardless of the model chosen, getting the right mix of skills and expertise is critical in carrying out applied political economy work. In particular, it affects the chances that analysis will lead to operationally relevant findings. The following applies particularly where a decision has been taken to contract-out the work to a team of consultants, but with modifications it is relevant to conducting analysis largely or wholly in-house. In practice, a combination of international and local expertise has generally been found to achieve the necessary mix of skills and attributes, including:
- Political economy expertise, by which we mean some familiarity with key analytical concepts including problems of credible commitment; collective action (free riding, tragedy of commons, etc.); moral hazard; information asymmetry among principals and agents; and exit, voice and loyalty. Identifying accurately the type of ‘puzzle’ underlying an observed pattern or problem is the key to searching out potential solutions based on theory and/or experience elsewhere.
- Strong country knowledge and, given the current trend towards more narrowly specified problem-driven analyses, strong knowledge of the sub-sector in question, including competence in dealing with the relevant technical issues.
- Good networks of key informants in country, including sector-specific contacts. Experience suggests that this often overlooked attribute is absolutely critical to the success of political economy work.
