In recent years donors and other development actors have increasingly recognised the importance of politics in development processes. In practice this requires a better understanding of the political-economy context, at the national and sector level, and its implications for development prospects. A number of analytical frameworks and tools aimed at assessing the political and institutional contexts of development have been recently developed, tested and implemented by donors as well as other agencies.
DFID, through its Drivers of Change work, has been at the forefront of efforts to take politics into account in its strategies and programmes. In its new White Paper DFID commits to expanding the use of political economy analysis to inform the choices it makes. As part of these efforts DFID – with the support of ODI and the Policy Practice – has produced a practical guide for its staff on the relevance, scope and uses of political economy analysis.
The ‘How to Note on Political Economy Analysis’was launched at an event hosted by ODI on Thursday 23rd July. The event provided an opportunity to present recent examples of work in the field, discuss how donors can up their game on the “thinking and acting politically” agenda and identify where outstanding challenges remain.
Thinking and working more politically is now at the heart of DFID’s agenda, particularly in its work in fragile states and in relation to state-building. A commitment to an increased use of political economy analysis is central to this approach.
There is an increasingly wide range of frameworks, tools and approaches which can be used to provide good quality political economy analysis. DFID’s Drivers of Change approach was a pioneer in this field, and other donors including the Dutch and SIDA have recently developed country level tools such as SCAGA and Power analysis.
Good quality political economy analysis should have operational relevance. A recent development is the use of problem-focused and sector level analysis to address specific policy questions.
Donors such as DFID need to consider the challenges posed by moving from technical approaches to more political ones, not only in relation to thinking politically but also, crucially, for acting politically.
For example, thinking more politically can help donors to work more strategically and to identify and effectively engage with key actors and ‘change-makers’. But it also requires donors to be aware of the political impacts of their actions, and to ‘do no harm’.
The dynamics of change processes are key for understanding the potential for interventions to achieve positive outcomes in reform process. Donors may act as facilitators or mediators in these change processes, for example through the timely identification of, and engagement with, different actors who can play a role in facilitating reform. However greater realism is needed about what can be achieved by external actors in what are essentially domestically driven reform and change processes.
Commitments to the aid effectiveness agenda may limit the donors’ ability to work in a politically informed way and take forward some of the implications of political economy analysis. Matching up these two agendas particularly in fragile states is one of the frontiers of the current development debate including within the OECD DAC.
The success of political economy analysis depends in part upon its consistent and long term application, and may require greater up-skilling of staff, in headquarters and at country level.