pdf Political Economy Analysis - How to Note

Title: Political Economy Analysis - How to Note
Department for International Development (DFID)
Institution: Department for International Development (DFID)
Publication Date: 2009
Keywords: Political Settlements, Governance, Economic Recovery


This paper offers a practical approach to seeking political settlements.  Although it is ostensibly about political economy analysis, and aimed at improving the effectiveness of aid, it is directly relevant to political settlements.  The process of going through the actions detailed in this note can help many practitioners in the field better understand the political settlements in the country in which they work.

Key Issues:

This paper explains what a political economy analysis is, explains how to do one of these analyses, and describes the positive impact these analyses can have.

Political economy analyses seek to identify the interests and incentives which drive the main actors in a country.  Both formal and informal institutions need to be noted, along with values, ideas, culture and important aspects of local history.  This is the preliminary understanding vital to assess a country's political settlement.

The paper then details several tools which it recommends be used to work through the analysis.  These include problem driven approaches, macro-level work, stakeholder maps and sector-specific studies.  With all of these, the process of conducting the analysis can be as useful as the final product which emerges from it.  The paper also provides an update and reworking of the drivers of change approach advocated by DFID amongst others some years ago.

The paper lists the advantages of conducting these analyses, including the way they can encourage a shared understanding between government departments and with other actors; they can inform policy and programming; and they can help identify routes to improve a local political settlement.

DFID are expected to produce a how-to note specifically on political settlements soon.  Until they do, this is the best substitute in terms of offering specific instructions for discerning what a country's political settlement may be, and how it can be improved.

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