Political economy analysis is a powerful tool for improving the effectiveness of development assistance. It focuses on how power and resources are distributed and contested in different contexts, and the implications for development outcomes. It reveals the underlying interests, incentives, and institutions that enable or frustrate change. Therefore, such insights can contribute to improved agendas around governance, employment and income, natural resource management, inclusion, and service delivery which are core to SDCs cooperation strategies in Latin America—but which experience has shown do not lend themselves to technical solutions alone.
The Latin America region is already leading significant efforts to incorporate political economy analysis into operational work. Informed by political economy studies, during 2015 several mid-term reviews of cooperation strategies of several Latin American countries are being conducted. These are providing critically important elements for strategic choices on future priorities and engagement. The event will allow staff to distill the emerging findings and reflect on implications at country- and sector (àmbito) level. The final goal is to enhance the impact of SDC support.