Political economy analysis (PEA) is a form of analysis concerned with understanding the prevailing political and economic processes governing behavior in society – specifically, how these processes affect the incentives of different actors, and the distribution and contestation of power between them. It is intended to support more effective and politically feasible development interventions by setting realistic expectations of what can be achieved, over what timescale, and the risks involved. There are, however, ongoing debates about how to realise this potential of PEA to improve development programming.
The limited available literature suggests that the particular relevance of PEA to mining is that is can help development agencies to understand:
- The (potential) impacts of mining on development: specifically, to understand the obstacles to allocating resource rents for developmental purposes.
- Relationships between actors: including between different levels of the state.
- Elite incentives and the potential for ‘resource curse’: in particular, understanding elite incentives to generate rents, and the complex range of factors that affect their capacity to do so.
- Rent distribution: understanding why and how elites use rents to re-enforce their power, and why they select certain public policies.
- The feasibility of reform: much of the literature emphasises the role of PEA in highlighting ‘best fit’ (as opposed to best practice) solutions.
A variety of case-study examples are included in this report which further highlight the range of practical purposes for which PEA has been commissioned in the mining sector, how it has been undertaken in practice (i.e. methodologies), and its subsequent implications for programming.