This paper examines political economy diagnostics carried out in Zambia and their influence on the World Bank’s support to programmes in that country. It concludes that, while PE analyses are valuable, they need to provide more practical recommendations for approaching change. Country-level PE analysis provides useful background information, but recommendations from sector studies tend to be more actionable. It might therefore be preferable to focus PE studies at the sector level.
PE studies are good at describing the operating environment of a programme or policy and highlighting potential winners and losers. However, PE studies face several important challenges:
- Governments are often reluctant to collaborate on PE analysis since such studies shed light on existing power structures and on why certain policy decisions, which might be in the best interests of the population, are not being made.
- PE studies often fail to make practical recommendations, particularly on complex institutional and policy issues that might require long-term engagement.
- The point of view of the World Bank team members on the ground may not be shared by the management, either because they do not understand the local reality or they do not see the payoffs from a change in approach.
- PE studies can sometimes go against donor expectations, making implementation of study recommendations more difficult.
- When teams on the ground are expected to deliver tasks and results in a fairly short period of time, there is a tendency to focus only on ‘manageable’ issues.
Sector task teams need to be involved at all stages of a PE study, otherwise its usefulness is likely to be low. Further:
- Task teams should invest time in developing the questions they would like the political economy analysis to answer.
- The analysis should be carried out in a way that is participatory and inclusive.
- The goal of PE analysis should be to inform staff and management on how sensitive policy and implementation issues should be approached, given the political environment, with the aim of maximising development impact.
- It is important to have strong support from senior management to carry out PE analysis, while at the same time educating senior political leadership that the objective of such analysis is not to interfere in internal political processes but to better understand the political environment within which economic decisions are being made.
- PE analysis could be integrated into standard documents, such as sector studies and public expenditure reviews, already being used to support existing operational activities. This would encourage regular updates to be made to PE analyses and would give them a wider audience.
