Background
The Power and Drivers of Change approach has developed from political economy analysis developed by the Department for International Development (DfID), the World Bank and other donors to address the problem of political commitment and its impact on pro-poor change programmes and policies: the missing link between understanding a country’s political framework and context and their relevance to development and poverty reduction. This approach involves gaining a deeper understanding of the political, social, cultural and economic issues at play in a country; the power relationships between actors and at the societal level; and the incentives of these actors to affect or impede change.
Aims and objectives
This review commissioned by the OECD-DAC (Organisation for Economic Co-operation and Development – Development Co-operation Directorate) compares and contrasts different donor approaches to conducting political economy analysis, and examines what is being done with the findings, in order to learn lessons for future work. It draws on studies conducted in four countries – Bangladesh, Bolivia, Kenya, and Tanzania – as a basis for deriving findings and recommendations for this type of work.
Findings
A variety of approaches to power and drivers of change analysis (termed ‘Power and DOC Analysis’ for the purpose of this study) have been developed by aid donors. Most focus on the structural and institutional factors likely to drive or impede pro-poor change and to the underlying interests and incentives that affect the environment for reform. These studies usually take the local situation as the basis for analysis, rather than existing policies and country programmes.
Power and DOC analysis operates at the cutting edge of development. There is strong interest among donors in deepening understanding of the political and institutional factors that shape development outcomes. While there is no agreement on what conceptual framework to employ, there are important commonalities, centred on the relationship between political factors, economic conditions, and institutions. But donors are employing different analytical lenses. Sida’s approach focuses on the links between human rights, democracy and poverty reduction; the World Bank on the role of formal public institutions; and DfID on structural and institutional factors that support or impede poverty reduction.
There is growing support for Power and DOC analysis, both within the donor community, NGOs and research institutions. The studies are having some impact on country plans and programmes. The review found that most of the Power and DOC studies were initiated by country offices, to assist with the design of country level strategies and programmes. For Sida and DfID, country offices have taken the lead, with varying back-up and guidance from headquarters. By contrast, the impetus for World Bank Institutional and Governance Reviews (IGRs), and for political analysis in Africa, has come from headquarters, and ownership by country offices has been more variable.
The studies have been used to promote internal learning rather than dialogue with external stakeholders. The studies have helped to structure existing knowledge, provided a shared language and understanding of the impact of political and institutional context, and stimulated thinking about processes of change. There is some evidence of positive impact on country strategies and programmes, especially at sector level, but their operational implications are often limited.
The studies are also beginning to influence donor policy, by emphasising the importance of political factors in shaping development outcomes, and in highlighting political and institutional issues in programme design across sectors. And yet tensions are emerging between corporate objectives and the implications of Power and DOC analysis, which emphasise the prime importance of local political process and incremental change, in the face of pressures on donors to meet short term spending targets, and to be accountable to their own taxpayers. Political economy analysis can contribute positively to improved aid effectiveness by highlighting the risks of alternative strategies and investments, and demonstrating how political considerations and a more incremental approach can improve implementation.
Power and DOC analysis is potentially challenging, because it questions fundamental assumptions about how development happens. It reinforces the need for harmonisation of donor approaches to be based on rigorous and honest debate about different perspectives. There are signs that this is already beginning to happen through active dissemination and jointly commissioned studies.
A number of key challenges and opportunities emerge from this review:
- Overcoming differences in understanding that are implicit in the different approaches being taken by donors: there is a major opportunity for constructive dialogue and joint learning, both among donors, and between donors and development partners through more active dissemination and engagement
- Moving from high level analysis to operational strategies and programmes: closer attention to operational implications in the design of the studies and more explicit consideration of potential programmatic outcomes would strengthen their validity and usage
- Reconciling tensions between longer term political processes and incremental change with short-term spending and accountability imperatives: demonstrating how such analysis contributes to improved aid effectiveness and harmonisation offers a potentially fruitful way forward.
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