The objective of Political Economy is to understand how
power and resources are distributed, organized and contested in different contexts, and how this relates to development processes. It is an approach to understand the political factors and political dynamics in the context in which change should take place, and to identify
entry points for change. It further analyses the possible implications of change/reforms for different population groups, i.e. who benefits and who loses, what potential tensions, conflicts this implies and what this means in terms of
risk identification and its management. Finally
it is a lens through which to look at development problems.
A range of
analytical tools and methods offer support in understanding: [A] institutional structures;
[B] decision making processes;
[C] key players that could push or bloc a reform, their power position and motivations;
[D] the understanding of incentives, constraints and obstacles to reform.
Political economy analysis combines the economic principle of rational behaviour that influences decision making with the political perspective of power positions and power relations, both formal and informal power. Tools help to identify ways to maximize support, or minimize resistance, find the right incentives and targeted interventions for most cost effective results and more transformative (political) change processes.
You will find in this site selected information that will help you get an understanding of the topic; tools that can support you in your day-to-day work; and a selection of reports that will give you a flavour of the richness and usefulness of political economy analysis. You also find documentation of PE
Most of the DDLG programs also support social reform agendas at the national or subnational level. A well-managed
Policy Dialogue process, jointly conceived by the management at the Swiss representation, creates fertile soil for DDLG interventions and/or reforms and thus ultimately increases SDCs leverage. Projects and programmes often cannot tap their full potential and are less sustainable due to non-enabling policy environments. Interventions that result in favorable institutional and policy change or capacity building have a more profound and lasting impact – and are therefore central to aid effectiveness. In the Category Policy Dialogue below you find the H2N ‘Results oriented Policy Dialogue’ by SDC, but also practical examples of how offices have operationalized their approach to Policy Dialogue as well as further literature.
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Result-oriented policy dialogue (PD) aims at a conducive environment to maximize the impact of development and humanitarian cooperation. Based on staff experience, the present document should insist to induce behavioural change at population, institutional and policy level.
dldp, Helvetas, SDC
| Western Balkans,
A documentation and qualitative analysis of dldp’s policy engagement and impact. This report’s objective is to
a) document dldp’s policy engagement in selected thematic areas; and
b) analyse the programme’s impact on selected policies and policy making processes.
by Richard Burge, ITAD: A key issue for all DDLG programming is how to adapt to changing environments. This question is particularly relevant for fragile and conflict-affected situations, but not only. Also after having conducted a Political Economy Analysis, the question is often how to design a program that takes into account the power and interests of the stakeholders involved.
In the Framework of Learn4Dev SDC organized a Webinar Series on Political Economy Analysis throughout 2017 with ECDPM.
This practice paper offers a simple step by step guide to help development practitioners identify the critical actors and institutions needed to facilitate or block new policies.
The analysis of distributional effects of reforms at the macro - and micro - levels looks at the access to resources of different groups and individuals as well as the distribution of
benefits and power.
Understanding that stakeholders apply different power resources to influence reform processes.