Applying Political Economy Analysis (PEA)

Blessings ChinsingaChancellor College, University of Malawi

Centre for Social Research (CSR) & Department of Political and Administrative Studies (PAS)

P.O Box 280, ZombaE-mail: kchinsinga@yahoo.co.uk

Accelerated Tilitonse Grantees’ PEA Training Session

Wamkulu Palace 27-28th February 2013

Training Session Outline

• PEA and Policy Processes• Using PEA in the Project Cycle• PEA Case Study• Practical Challenges of Using PEA• Wrap Up Reflections

PEA and Policy Processes

• Integrating PEA into programming provides possible entry points for mobilizing change and adjust or design programmes to maximize their effectiveness

• To recap, problem driven PEA is the most relevant for the purposes of implementing Tilitonse funded development projects and interventions

• Key steps in the problem driven PEA include the following:– Reflection: Problem Identification

• What is the specific problem to be addressed?• If there is more than one problem, can they be clearly distinguished?

(eg. Operational versus developmental)

– Diagnosis: Systemic Features• Why does the problem identified persist?• What are the systemic features in place that are relevant to the

problem?

PEA and Policy Processes Cont’d

– Diagnosis: Dynamics and Incentives• Why does the problem identified persist?• What combination of perceived incentives, shaped by the

identified systemic features influence the behaviour that leads to this problem?

– Prescription: What can be done?• What actions can be proposed that:

– Address the problem identified– Account for the constraints and opportunities in stages 2 and 3?

– ….but always remember that the changes targeted by embedding PEA into programme design, planning, implementation, monitoring and evaluation have significant public policy implications

– It is therefore important to understand the relationship between PEA and policy processes

PEA and Policy Processes Cont’d

• But first what is public policy?– Anything a government chooses to do or not to do (Dye, 1972)– A set of interrelated decisions taken by a political actor or group of

actors concerning the selection of goals and the means of achieving them within a specified period where those decisions should in principle be within the power of those actors to achieve them (Jenkins, 1978)

– A purposeful course of action followed by government in dealing with some topic or matter of public concern such as economic crisis, unemployment, agriculture etc (Anderson, 1984)

• These definitions clearly suggest that government plays a key role in public policy….the responsibility of making policy rests squarely on the shoulders of government

• Although PEA strategies may recommend building alliances and coalitions that may not directly engage relevant government agencies; the ultimate objective is to get government to do at least something in the targeted area of intervention

PEA and Policy Processes Cont’d

• ….such strategies are often a beginning point in the concerted efforts to catalyze the desired changes; government will have at least to get involved at some point

• The responsibility of making public policy rests with the government; the rest of the stakeholders can simply influence which makes the political capacity of organizations really important

• This capacity is required in the areas of negotiation, advocacy, communication, dialogue and the generation of constructive policy options

Understanding Policy Processes

• Getting to grips with policy processes is a daunting but not an impossible task because the whole life of policy is a chaos of purposes and accidents

• The conventional way of understanding policy processes as proceeding in distinct stages stretching from agenda setting, formation, decision making, implementation and evaluation has lost its traction except of course as a heuristic device to which compare reality

• Reality is much complex that suggested by the conventional way of understanding policy processes;…policy processes must be understood as a political process as much as an analytical or problem solving one

• Policy processes are less a linear sequence but more of a political process, underpinned by a complex mesh of interactions and ramifications between a wide range of stakeholders who are driven and constrained by the competing interests and contexts in which they operate

• The policy making process is therefore not the technical, rational activity that is often held up to be, for instance, as exemplified by the Keeley and Scoones (2003) policy processes analytical framework

Understanding Policy Processes Cont’d

Source: Keeley and Scoones, 2003

Understanding Policy Processes Cont’d• The framework uses three lenses to analyze policy processes, namely: 1)

narratives/discourses; 2) actors/networks; and 3) politics and interests• Narratives are storylines that identify competing ways of viewing a particular

problem, that is, provides a simple and accessible explanation of a complex situation– A narrative highlights a specific problem and then identifies its cause and a preferred

policy response• The actor component helps identify how actors are working together and

forming networks which promote certain approaches and define, for example, what types of knowledge counts as valid evidence in policy processes

• Politics helps identify how politics of resource use and distribution or power relations need to be acknowledged, unraveled, or brought into the debate

• Policy spaces shown at the intersection between the three lenses are the entry point for policy engagement and influence

• Policy change is therefore the result of a complex interplay of narratives/discourses underpinning policy, the actor networks promoting or resisting it and political interests driving the process

• Policy advocates use competing narratives, framed in particular ways, to push policy processes toward their favoured responses

What interests?

Which actors and networks?

What narratives?

Steps for Policy Process Analysis

What policy spaces?

Steps for Policy Analysis Cont’d

• Policy analysis makes it imperative for practitioners to be aware of policy spaces and policy windows

• Policy spaces and policy windows are essentially the same but with slightly different practical implications

• Policy spaces are moments of intervention that throw up new opportunities, reconfigure relations or bring in new ones and set tone for a new direction

• Policy spaces may be closed, invited, created, visible, hidden and invisible in their nature

• Some of the policy spaces include the following:– Invited spaces (eg. Consultations on policy led by government agencies

involving selective participation of stakeholders)– Popular spaces (eg. Protests, demonstrations led by social movements

put pressure on formal policy making)

Steps for Policy Analysis Cont’d

– Practical spaces (eg. Pilot field based initiatives by NGOs/fieldworkers, providing opportunity for ‘witnessing’ by policy makers)

– Bureaucratic spaces (eg. Formal policy making spaces within the government bureaucracy/legal systems, led by government civil servants with selected input from external experts)

– Electoral/political spaces (eg. Formal participation in electoral system allows voting policy positions of competing candidates)

– Conceptual/discursive spaces (eg. Whose new ideas are introduced into debate and circulated through various media?….transformational leadership)

• Policy windows refer to opportunities or moments for advocates to push their solutions to a problem or catch attention of policy makers to their problem

• A policy window opens when a problem is recognized, a solution is available and the political climate makes the time right for change and the constraints do not prohibit action

• Three separate streams in public policy processes: problem, policy and politics which must come together at critical junctures to produce policy change

Steps of Policy Processes Cont’d• Policy windows open both predictably and

unpredictably as exemplified in the following types of policy windows:– Routinized policy windows in which institutionalized

procedural events dictate predictable windows opening– Discretionary policy windows in which the behaviour

of individual political actors leads to less predictable windows opening

– Spillover problem windows in which related issues are drawn into an already open window

– Random problem windows in which random events or crises open unpredictable windows

Steps for Policy Processes Cont’d

• The fact that policy windows open unpredictably means programme implementers (advocates) must always be prepared, their proposals (solutions) ready, their special problem well documented lest the opportunity pass them

• Windows of opportunity close quickly if no alternative is available to meet the crisis or simply politically or financially unacceptable

• The short duration of policy windows suggests that programme implementers (advocates) must strike while the iron is hot….must always have solutions in their pockets ready since this suggests that solutions do actually chase problems and not the other way round

Implications of PEA and Policy Processes

• The apparent linkage between the two is basically a call to development practitioners to think and work politically

• The logic is very simple:– There is no technical solution to a problem without a political solution;

and the resolution of political problems will always require technical support and implementation

– …politics has to be understood more broadly as pervasive and unavoidable and necessary activities of conflict, negotiation and compromise involved wherever and whenever human beings in groups have to take decisions about how resources are to be used, produced and distributed

• Thinking politically means recognizing that processes are just as important as projects in development and change and that their evolution and forms, and their institutional expression will vary from context to context and will require both support and time to consolidate

• Thinking politically about development applies at all levels, from village to the top and across sectors

Implications of PEA and Policy Processes Cont’d• …there is simply no alternative to understanding in detail who the players are,

what they do, where they come from, their organizational affiliations, networks, ideologies and interests and the political dynamics of the issues at stake

• It is simply stated a question of detailed political ethnography

• Working politically in development means supporting, brokering, facilitating and aiding the emergence and practices of developmental or reform leaderships, networks and coalitions in the public and private fields, at all levels and across all sectors, in response to, and in concert with, initiatives and requests from local individuals and groups

• It thus entails investing in processes designed to support the formation and effectiveness of developmental coalitions, sometimes over long periods, committed to institutional reform and innovation by enhancing not just technical skills (the conventional domain of capacity building) but also the political capacity of organizations in areas such as negotiation, advocacy, communication and the generation of constructive policy options

Using PEA in the Project Cycle

• The critical question is how do we go about using PEA in the project cycle?

• To successfully use PEA, it is important to always remember its underlying rationale

• PEA investigates how power is exercised, how decisions are made, and how incentives and disincentives are brought to bear on specific organizations and individuals

• The following concepts and their implications for PEA have to be understood in the attempts to operationalize it:– Collective action challenges: situations in which the distribution of

costs and benefits prevents two or more actors from coming together to produce something of value, when it would be difficult for any single actor to produce it alone

– Credible commitments: promises made by one actor and thought to be believable by those actors to whom the promise is being made. This credibility tends to arise from the presence of some implicit or explicit cost to the promises should they break their promise

Using PEA in the Project Cycle Cont’d

– Exit, Voice and Loyalty: When an actor is confronted by decline in, or dissatisfaction with, an existing system they are confronted with two options: opting out in favour of alternatives (exit); or staying the course and advocating improvements (voice)• Loyalty may affect the decision between the two

– Information asymmetry: Situations in which one actor has more information about the relevant situation or intervention than another actor and can potentially use that information to gain some sort of advantage

– Principal-agent problems: Challenges that arise where one actor relies upon and therefore must motivate another to act on their behalf or in their interest

– Moral hazard: A particular form of market failure in which actors are encouraged to act irresponsibly because of implicit or explicit guarantees provided by other actors

• Thinking in these terms helps to focus attention on understanding the roles and incentives of different actors….identifying what motivates behaviours of actors is critical in answering the sorts of why questions in PEA

• In using PEA in the project cycle five practical considerations are imperative

Using PEA in the Project Cycle

• Which model of PEA to use?– Should PEA be done by organizations to use it or should it

be contracted out?– Doing it themselves has better prospects for achieving a

close connection between what PEA reveals and the operational decisions needed to be taken

– Contracting it out has the possibility of guaranteeing independence and harnessing more specialized or long-term knowledge of issues

– It is, however, not simply the question of either or….different models can be creatively integrated in order to improve the quality of programme design and implementation

Using PEA in the Project Cycle Cont’d

• Scope and purpose of PEA– At what level should PEA be conducted given that there are

four different possible levels, namely: 1) issue specific analysis; 2) sector level analysis; 3) country level analysis; and 4) global/regional analysis?

– Evidence suggests that a greater problem orientation is the key to better uptake of analytical findings

– Should PEA take the form of definitive analysis or scoping studies?• Scoping studies should be seen as a starting point for assessing the

potential for more specific PEA exercises

– PEA should thus be considered as a process in which an organization progressively deepens its understanding issues of concern

Using PEA in the Project Cycle Cont’d

• Appropriate Timing– Utility of PEA hugely depends on appropriate timing but what

constitutes appropriate timing varies according to the scope of the work

– Appropriate timing depends on two key issues: 1) organizational cycles and staffing cycles; and 2) context specific events that are relevant at the level at which the work is carried out• Programme cycles are relevant in defining whether the work would be informing

programme design or will be a part of a lesson learning approach• Staffing cycles determine the extent to which the work can build on tacit

knowledge of organizational staff, prevent the loss of institutional memory or improve the speed with which new staff can work effectively

• Context specific events help define the form of work and generate theories of change in ways that are grounded in country realities rather than external ones

• Examples include policy cycles in the sector in question; electoral cycles or other changes in leadership, major institutional reforms (constitutional and legal changes) and significant shocks (eg. Conflict, economic crises)

– Anticipating key events in advance where possible and timing analysis to feed into forward planning can be particularly useful

Using PEA in the Project Cycle Cont’d

• Defining quality and the necessary skills and expertise for PEA– Key to understand that PEA is essentially a qualitative method

but still guided by the principles of validity and reliability– Triangulation is, however, key in PEA….refers to the cross-

checking of information from different sources to assess reliability or validity

– There is contentious debate about whether to use standardized or flexible frameworks for doing PEA, the arguments being that using standardized frameworks allows for comparability whereas flexibility allows to bring out uniqueness of cases

– …….however what ultimately matters is getting the right mix of skills and expertise in carrying out PEA

Using PEA in the Project Cycle Cont’d

• Achieving and monitoring uptake into programmes– Results of PEA should be seen as one of the critical inputs

into the project cycle– There will be value in an explicit comparison of the ‘theories

of change’ reflected in current or past programming with changes that appear plausible in the light of PEA

– The uptake of findings into programming should not begin or end with the delivery of the final output…it should be an ongoing exercise

– Revisiting the process with a view to understanding better the impacts that analysis can have on an organization’s thinking, programming and ultimately, development outcomes

Using PEA in the Project Cycle Cont’d

• In using the PEA it is important to note that– PEA focuses on understanding what sort of local political

processes are involved in nurturing development and providing the incentives for development

– Thus PEA draws attention to the political processes of bargaining at work between different interest groups in a particular country or sector context

– These bargaining processes are crucial to finding ways to ensure collective action in areas that are fundamental to development, for example, delivering services

– PEA helps project implementers to engage in ways that work with locally driven political processes

– PEA does not necessarily mean that you do a whole of different things…it means that you do a lot of things that you are already doing differently

PEA Case Study

• Case Study: Bangladesh Urban Bus Operations Study– PEA was conducted to understand why unsafe, polluting buses

continue to operate in Dhaka’s already chocked roads, despite efforts to regulate and reform bus operations

– The PEA was operationally focused in support of Clean Air and Sustainable Environment (CASE) project in Bangladesh and was conducted before project implementation

• Systemic Problems– Poor standards and quality of service

• Many buses do not adhere to time schedules; buses engage in reckless driving in competition for passengers; and passengers are mistreated

– Fragmentation of the industry reduced efficiency• There are bout 6700 buses of various kinds; more than 60 bus

companies that vary widely in ownership; poor institutional accountability; and a poorly regulated fare structure

PEA Case Study Cont’d

• Political Economy Drivers of the Problems– Political Patronage

• Key ruling party leaders dominate bus owners’ associations; and association leaders are members of the Road Transport Committee, which is a hub for patronage distribution because of its in route allocations

• Because routes are created to accommodate many clients, there are too many buses and much congestion

– Co-opted Industry Associations• Bus owners associations and trade unions tend to change

leadership automatically with changes in political regime, from the top leaders right down to terminal and route committees

• The industry leaders cede power or switch loyalty to the new ruling party to maintain a perverse equilibrium in the sharing of rents between those aligned to the ruling party and the opposition

• This asymmetrical sharing of rents helps maintain stability and some predictability in service

PEA Case Study Cont’d• Political Economy Drivers of the Problems Cont’d– Captured Institutions of Accountability

• The system continues because it serves the interest of powerful stakeholders; those who would have the most interest in reform have little influence, for example, passengers

– Political/Business Oriented Allocation of Bus Routes and permits• Problems persist because the allocation of routes and

permits is based not on commuter demand but on the narrow business interests of bus owners and their political supporters

PEA Case Study Cont’d

• Recommendations• Considering that there are formal institutions and

arrangements that could regulate but fail to do so, more emphasis was given to the stakeholders and their incentives

• The driving force for reform could come from owners of large bus companies, with support from their workers, associations, and trade unions, along with civil society groups and the media

• It would, however, require significant commitment to build a consensus across diverse stakeholders to move the reform agenda forward

• The various stakeholder groups were mapped to reflect their interest in reform and their power/influence in order to prepare a communications strategy would help build consensus

PEA Case Study Cont’d

• Project Design and Scope– Delaying the investment in the ‘hardware’

component of urban transport and restructuring and instead focused on the ‘software’ component

– This entailed mainly building a platform for more effective stakeholder engagement in the sector

Practical Challenges of Using PEA

• Doing PEA is an easier part but actually utilizing it in a practical context is quite a daunting task

• The main challenges related to using PEA include the following:• There is no guide that can ever provide a definitive list of issues

that need to be considered when doing as well as applying PEA in a practical context– Practitioners simply need to develop observational and analytical skills to

establish what key issues are in the area they are working– It requires creativity, tacit knowledge, intuition and sound management

• Political economy issues are highly dynamic; they keep on changing sometimes faster often resulting in the failure of the implementation process to keep pace with the changes– The issue is that overtime some issues will wane in importance while

new ones will emerge– Monitoring changes and understanding these will impact on the issues at

stake needs to be a continuous process, not an episodic one

Practical Challenges of Using PEA Cont’d• Integrating PEA into project programming is resource intensive which many

organizations cannot afford especially when it is construed as an going process– Priority is given to tangible programmatic activities that are geared toward achieving

the desired strategic impact– PEA related activities, for instance, mapping stakeholders, understanding their

interests and incentives, dialogue, partnership and coalition building might be regarded as secondary to an organization’s programmatic activities

• Apparent disjuncture between donor demands for projects to be implemented within stipulated deadlines and the likely practical implications of the PEA approach– PEA requires constant adjustment of interventions to take advantage of exigencies

not anticipated in the design, sort of privileges opportunistic and strategic behaviour– PEA often takes a lot of time since it requires paying attention to minute details and

integrating issues that would ordinarily be taken for granted– Achievements using PEA may not be recognized as such using the conventional

yardsticks of success because donors are partly driven by very strong bureaucratic and domestic political incentives to show short-term results, to pursue quite a normative agenda, and to demonstrate that large amounts of technical and financial assistance can make a big impact

Practical Challenges of Using PEA Cont’d

• It requires a dramatic change of the mindset especially coming just at a time when there is an obsession with good governance– Good governance is a buzzword if not a mantra in

development circles– While governance assessments begin with a normative

idea of what institutions should look like, PEA takes the existing situation as it is

– It focuses on identifying feasible solutions to improving sector performance within existing incentive structures and relations of power not to achieve good governance but good enough governance

Wrap Up Reflections

• The political economy context is increasingly seen as a deciding factor in the extent to which development programmes achieve their aims motivated among other things by the following questions:– Why do technically sound strategies even those that have been

successful in other contexts or constitute ‘best practice’ fail to have the desired strategic impact especially on the livelihoods of the poorest in society?

– Why do sector policies often supported by donor technical assistance fail to get implemented?

– Why are seemingly successful pilot programmes not scaled up?– Why do some communities fail to overcome collective action

problems in as far as the development of their local areas is concerned?

Wrap Up Reflections Cont’d

• There are several issues that need reflection in the efforts to internalize PEA in project programming:– Developmental leaderships and coalitions often emerge in response

to a critical juncture:-a threat, a challenge or a danger or a new opportunity

– Seizing the moment to initiate a reform or campaign can be critical and hence reading the politics so as to be able to identify such openings or opportunities is important

– The salience of the issue to enough people plays a significant part in influencing the level of support which developmental leaders or coalitions can expect to mobilize

– The position of the central government on an issue can shape strategies but also influence outcomes

– Identifying individuals within the government apparatus or departments of state, that may be amenable, sympathetic or simply appropriate for pressure and/or dialogue is a necessary political skill….knowing where and how to connect with them is important

Wrap Up Reflections Cont’d

• The internal organization of a coalition committed to reform is important in terms of their roles and responsibilities

• A key question becomes does a coalition share a common vision, programme and commitment or is it a compromise between a number of interests and ideas, reducing the area of agreement to the lowest common denominator?

• Coalitions can be successful with respect to the following:– Achieving a specific policy goal (eg. Getting a law changed)– Opening up debate on an issue that had hitherto been a taboo– Deepening and strengthening the coalition’s internal organization

and relationships for future purposes– Increasing the capacity of constituent organizations

Wrap Up Reflections• The bottom line is that going forward using PEA implies

that grantees should bring political factors out of the assumption box of the log-frame

• This should help identify alternative ways forward given the existing political and economic context, ultimately improving the chances of achieving the desired developmental outcomes

• PEA thus calls for a turnaround from the obsession with good governance to good enough governance which is sometimes characterized as going with the grain….

THANKS VERY MUCH