Practical Guidance on Using Political Economy Analysis.

4.1 How to manage political economy analysis

Practical guidance on using political economy analysis can be found in DFID’s how to note (DFID 2009).

Harris and Booth (2013) highlight five key design issues for PEA studies: 1) selecting from the different models for integrating political economy analysis into operations, 2) how political economy exercises vary in scope and purpose, 3) the appropriate timing of political economy work, 4) defining quality and the necessary skills and expertise, and 5) achieving and monitoring uptake into programmes.

Recent guidance has highlighted the limitations of conducting PEA as an occasional, one-off study contracted to external consultants, and has called for greater use of in-house resources by development agencies. A recent paper by ESID emphasises the importance of scaling and sequencing, arguing that PEA should start small, for example with short conversation amongst experts and practitioners before scaling up to include a more in-depth workshop or research agenda (ESID, 2015). Other papers have also called for more interaction forms of enquiry (Copestake and Williams (2012), and everyday PEA using slimmed down and accessible analytical frameworks (Marquette and Fisher, 2014).

DFID's how to note aims to bring together the diverse literature and tools on political economy analysis within a short and accessible document.

The last decade has seen an explosion of interest among operational development organisations in more and better ways of understanding the countries and sectors in which they operate.

This paper aims to show that three different types of political economy analysis: agenda-setting, problem-solving, and influencing analysis, can be tailored to a variety of contexts depending on the development goals and the barriers that exist to development.

Development practice entails operating in increasingly complex and uncertain contexts to build and sustain relationships between stakeholders who often have sharp differences in commitment, capacity and outlook.

This paper argues that attempts to mainstream political thinking in most donor agencies have used a political economy analysis (PEA) approach, and yet this has been largely ineffective.

4.2 Translating political economy analysis into action

There are several reviews of how political economy analysis has been conducted and used to inform operational decision making. Some of the key documents include:

More general analyses of difficulties experienced by development partners attempting to think and work more politically include Carothers and De Grammont (2013), Booth et al. (2016), and Hulme and Yanguas, 2015.

Politics often explains where development assistance has been effective and where it has not. Yet, until the 2000s there has been little focus by development agencies on political issues. 

In recent years, the number of studies looking at the effect of politics on economic outcomes has flourished.

This article discusses the Strategic Governance and Corruption Analysis, which was introduced in 2007 by the Dutch Ministry of Foreign Affairs as a tool for political-economy analysis of governance structures in aid-receiving countries.

This paper reflects on the experiences of policy researchers to ask “Under what conditions does an understanding of political economy strengthen aid-supported development efforts?”

Politics has become a central concern in development discourse, and yet the use of political analysis as a means for greater aid effectiveness remains limited and contested within development agencies.