Lebanon: Political Economy Analysis for the Lebanon Economic Reform and Infrastructure Investment – Technical Assistance Facility

Lebanon Economic Reform and Infrastructure Investment (LERII) is a four-year programme, funded by the UK Government to contribute to the Government of Lebanon’s vision of growth and prosperity, economic opportunities and social cohesion for Lebanese citizens. Originating from the UK commitment to CEDRE, LERII is fully aligned with both Lebanese and UK Government strategic priorities and will:

• Support the preparation for investment in infrastructure led by the European Bank for Reconstruction and Development
• Provide technical assistance to support the Lebanese Government in implementing critical economic and governance reforms through a Technical Assistance Facility (LERII-TAF).

The Policy Practice worked with the DAI-led LERII-TAF team to conduct a political economy analysis (PEA) of Lebanon at the inception of the project. This was done in the midst of enormous challenges including Lebanon’s debt default on 9 March 2020, as well as the COVID-19 crisis. The PEA highlighted the major challenges facing the country and the way in which the existing political settlement makes economic reform particularly difficult. It provided insights into the political economy context for reform in three broad areas: macroeconomic reforms; structural reforms (including public sector reform, reform of the judiciary, and business enabling environment reform); as well as the challenges and opportunities for reform in six sectors (electricity, oil and gas, water, solid waste, telecoms and ICT, roads and land transport).