This framework is designed to help facilitate more feasible reforms that work towards ‘good enough governance’ in order to enhance development effectiveness. The framework consists of three tiers: (1) identifying the problem, opportunity or vulnerability; (2) identifying institutional and governance arrangements and weaknesses, and how these are related to poor outcomes; and (3) identifying how stakeholder interests might contribute to or resist reforms. It is vital to consider how the analysis will feed into programming, strategies, and operations. Problem-driven Governance and Political Economy (PGPE) analysis can provide advice on shaping strategies and operations in ways that range from adjusting them to the existing space for change to developing proactive strategies for expanding the space for change.
Politics and political economy influence whether and how reforms happen. Fully implemented feasible reform strategies are preferable to technically superior but politically unpalatable solutions that are only partially implemented, are stalled or reversed, or have damaging unintended consequences.
The ‘problem-driven’ approach to governance and political economy analysis focuses on particular challenges or opportunities in order to generate useful findings. It is designed to be adapted to context, and can be applied at (a) macro or country level, (b) sector or thematic level, or (c) project or policy-specific level. Analysis might also combine these different levels. There is an emerging PGPE analysis community of practice both inside and outside the Bank, which teams pursuing such work can tap into (and become part of).
PGPE analysis must consider institutional and governance dimensions as well as stakeholders and their interests. Analysis at layer two is essential for identifying what reforms are feasible from an institutional perspective. Drilling down to the political-economy layer is important to understand why the problem has not yet been addressed successfully and what the relative likelihood is of stakeholder support for various change options. This third layer might consider, for example, the distribution of rents, ethnic alliances, historical factors or current social trends.
The analysis needs to be well-evidenced. Apart from written sources, interviews with individuals and focus groups can be a crucial source of information. Anecdotal, or ‘soft’, evidence should be triangulated with ‘harder’ sources such as budget allocations, pricing information or asset declarations. Effective PGPE analysis also involves five key processes:
- Planning: PGPE analysis requires a clear vision of its purpose, focus, and the type of output sought. It should be linked into existing analytical work through the involvement of sector and task teams.
- Defining and finding the necessary skills: The skill set of the analysis team is vital. The team will usually consist of at least two people: one sector or technical expert and one PGPE expert. Local consultants can contribute valuable evidence to the analysis.
- Implementing the diagnostics: Team involvement and frank discussion of tacit knowledge, past experience, and upcoming challenges are crucial. So too are quality management and feedback to other relevant teams to validate the findings.
- Sharing and disseminating outputs: Outcomes of the analysis need to be shared as widely as possible, although this may prove difficult due to its sensitive nature. It will probably be appropriate to share at least a synthesis document with country partners and to consider including more sensitive information in background notes, workshops or other fora.
- Moving from analysis to action: Once complete drafts of the analysis are available, it is important to review the findings and to discuss their implications for strategies or operations. Management commitment from in-country teams is crucial to ensure that the analysis is followed up.
