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Based on my experience as a governance advisor with international development organizations, I have found that Political Economy Analysis (PEA) is critical to the success of development interventions, particularly in complex and fragile environments such as Iraq, Kenya, and the Balkans. In development work, we often find situations where a proposal's technical approach may be sound. Still, without understanding the underlying political and social dynamics, even the best-laid plans can fail.
Here’s why PEA matters:
PEA helps identify the key stakeholders, what they may gain or lose if reform is carried on, and most importantly, how their interests might support or obstruct the intervention. In many cases, reforms that seem technically feasible may inadvertently threaten the interests of powerful groups or fail to address the needs of marginalized communities. Fully understanding and considering all these interests will allow for a more practical and realistic approach. Also, this will engage stakeholders and balance competing interests during the implementation of the intervention.
For example, in Iraq, during my time as COR IGPA project while I was overseeing PEAs, it became clear that decisions affecting economic reform, governance, or service delivery had political implications and political interests involved. When we conducted a PEA after the 2018 national elections, we uncovered tensions between national and provincial authorities that were not immediately obvious. PEA results helped redirect the IGPA program. The project management included identifying power dynamics in programming, which resulted in a better project impact.
The PEA process may provide an effective platform for dialogue among stakeholders. Successful reform initiatives often rely on building consensus and creating ownership among different groups. In my opinion, PEA should include broad-based consultation to be effective.
However, PEA has its challenges. It can be susceptible, particularly when powerful actors feel threatened by potential changes. In such cases, conducting or publishing formal analyses may backfire, and informal PEA becomes more valuable for discreetly guiding decisions.
Regardless of its usefulness, PEA remains underutilized. Because of a lack of tailored approaches for specific interventions, generic PEAs often fail to capture the unique stakeholder dynamics relevant to a particular reform. Tailoring PEAs to specific issues allows for a deeper understanding of the alliances that can be formed to support policy changes.
PEA isn't just about understanding power dynamics; it's about shaping development strategies that are politically informed, inclusive, and sustainable. Including the insight provided by PEA in programming helps us better plan and implement reforms in politically unstable or post-conflict environments.