There are an increasing number of political economy tools available to development agencies, some of which are tailored to specific operational purposes. Though there is some variation in emphasis, many of these tools centre their analysis on actors, institutions and incentives operating at the macro, meso and micro level.
The new institutional economics thinking that underlies PEA approaches is not without its critics. Some argue PEA frameworks focus too narrowly on an economic interpretation of politics that casts agents as rational, utility-maximising individuals, neglecting the role of prevailing ideas or ideologies, and issues of power, agency and coalitions (Hudson and Leftwich, 2014). A recent GSDRC review found that PEA frameworks fail to systematically incorporate the impact of gender on power relations (Browne, 2014).
DFID. (2009). Political economy analysis how to note (Practice Paper). London: Department for International Development (DFID).
DFID’s how to note aims to bring together the diverse literature and tools on political economy analysis within a short and accessible document. It covers the following questions: What is political economy analysis? How and why does political economy analysis add value to development agencies’ work? What political economy tools are available? How does political economy analysis relate to other tools? How should political economy analysis be prepared, undertaken and applied? It includes case studies on how political economy analysis has been used by DFID offices.
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Corduneanu-Huci, C., Hamilton, A., & Ferrer, I. M. (2012). Understanding policy change: How to apply political economy concepts in practice. Washington, DC: World Bank.
How can we operationalize and evaluate these risks and opportunities in order to decide what reforms and projects are feasible given the circumstances? This book provides the reader with the full panoply of political economy tools and concepts necessary to understand, analyze, and integrate how political and social factors may influence the success or failure of their policy goals. Starting with the empirical puzzle of why corruption, rent seeking, and a lack of good governance emerge and persist in a host of countries and sectors the book reviews how collective action problems and the role of institutions, as well as a host of ancillary political economy concepts can affect the feasibility of different projects.
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Hudson, D. & Leftwich, A., (2014). From political economy to political analysis (Research Paper 25). Birmingham: Developmental Leadership Program.
This paper argues that existing political economy approaches lack the analytical tools needed to grasp the inner politics of development. Political economy has come to be seen narrowly as the economics of politics – the way incentives shape behaviour. Much recent political economy work therefore misses what is distinctively political about politics – power, interests, agency, ideas, the subtleties of building and sustaining coalitions, and the role of contingency. This paper aims to give policy makers and practitioners more precise conceptual tools to help them interpret the inner, ‘micro’, politics of the contexts in which they work. It argues in particular for more focus on recognising and working with the different forms of power, on understanding how and where interests develop, and on the role of ideas.
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Browne, E. (2014). Gender in political economy analysis (Helpdesk Research Report 1071). Birmingham: GSDRC.
An initial review of the literature indicates that gender is not systematically included in PEA. This was also conveyed by a number of experts consulted for this report, who stated that few if any PEAs to their knowledge had included a gender analysis, with the issue usually treated only in passing. The report nevertheless highlights the existing examples of gender-oriented analytical questions used in common PEA tools.
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