Getting to the ‘so whats’: how can donors use political economy analysis to sort out bad governance?

October 30, 2013

     By Duncan Green     


Close but no cigar. Just been reading an ODI paper from a few months ago, Making sense of the politics of delivery: our findings so far, by Marta Foresti, Tam O’Neil and Leni Wild. It’s part of the ODI’s excellent stream of work on governance and accountability (see my review of David Booth and Diana Cammack’s book) and repays close study.

The starting point is the widespread disillusionment in DFID and elsewhere with ‘political economy analysis’ (PEA), memorably summed up by Alex Duncan’s definition of a political economist as ‘someone who comes and explains why your programme hasn’t worked’:

‘There is no doubt that PEA has helped answer some of these questions [why stuff doesn’t work]. Yet many would say that researchers have not found a middle ground between generality and specificity. On the one hand, the use of catch-all concepts, such as political will or unspecified incentives, fail to provide enough analytical purchase on which to hang entry points for reform. On the other, if we view every context and problem as sui generis, experience cannot be used to construct theories of change that in­clude learning across programmes and contexts.’

So ODI has been trying to apply PEA, working with governments and donors on health, water, sanitation, justice and security and social protection in Malawi, Nepal, Rwanda, Si­erra Leone and Sri Lanka.

The result is ‘problem driven PEA’ – the ODI’s big new idea, which has substantial overlap with Matt Andrews’ Problem Driven Iterative Adaptation.transparency 2

‘Problem driven PEA is structured around three main dimensions:

Problem identification: identifying the specific ‘problem’ to be addressed or those poor outcomes to which po­litical economy issues appear to contribute.

Diagnosis: This has two components: (i) Structure: identifying those systemic features that help to explain why the problem persists (e.g. historical legacies, geo­graphic and social features, geopolitics, and the ‘rules of the game’ that underpin power relations); and (ii) Agency: identifying the incentives that shape actors’ behaviour, including key motivations, decision logics and power dynamics. Crucially, analysis needs to look at the interaction of both structure and agency, and can draw on a varied toolbox of relevant analytical concepts.

What can be done: Identification of plausible theories of change and assessment of the range of potentially vi­able entry points (selection of appropriate modalities, timing and sequencing of interventions, and so on)’

Which bears more than a passing resemblance to the ‘Power and Change cycle’ regularly discussed on this blog.

And their findings of what works on the ground (or at least a bit closer to it than the ivory towers of London or Harvard)?

Aid modalities: External actors can play beneficial roles in government efforts to ad­dress political constraints if they adopt appropriate ap­proaches. Six factors appear important to enable aid-funded ac­tivities to gain domestic traction:

  • Identify and seize windows of opportunity: ex­ploit country-led imperative for change.
  • Focus on reform of goods and services with tangi­ble political pay-offs.
  • Don’t focus on ideal models; build on what exists and get current policy and legal mandates work­ing.
  • Move beyond reliance on policy dialogue and fo­cus instead on making existing systems deliver.
  • Bear transaction costs to facilitate problem-solv­ing and local collective action.
  • Ensure adaptation by learning.

fragile states 1Arm’s length aid: An ‘arm’s length’ model of engagement and organisation may be best placed to help people in developing countries build the institutions that enable them to act in their collective long-term interests. Such mod­els work through organisations that offer advisory ser­vices directly to governments and other public bodies in developing countries and have had some success as bro­kers of collective action and/or facilitators of change. Examples include the Africa Governance Initiative, the Budget Strengthening Initiative and TradeMark East Africa. Donors should consider delivering more aid in this way.

Great, in that the ODI work really is starting to address some of the criticisms of PEA. I particularly like the recognition of the importance of critical junctures/windows of opportunity, and a real effort to understand why change isn’t happening before outsiders jump in. Why no cigar? Because in this rendering of reality, the world is apparently made up of only of donors and states (and of course researchers). No-one else matters. Nothing on the coalitions of disparate actors (state and non-state) that can drive or block change, or create the desire (or at least perception) among elites that change is needed. Civil society organizations, faith organizations, Diasporas, business associations etc etc.

But this quibble aside, this is all part of a very exciting effort to really get to grips with the issues of governance and institutional reform.

Update: see comments for update/response from ODI