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 seminars.