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Political Economy Analsyis

Should aid fight corruption? New book questions logic behind this week’s anti-corruption summit

Duncan Green's picture

Over at the Center for Global Development, Charles Kenny wants comments on the draft of his book on Aid and Corruption (deadline end of May). Let’s hope this becomes standard practice – it worked brilliantly for me on How Change Happens – more varied voices can chip in good new ideas, spot mistakes or contradictions, and it all helps get a buzz going ahead of publication.

But let me take it one step further. As a contribution to the corruption summit, hosted by David Cameron on 12 May 2016, I thought I would summarize/review the book. Charles gave the green light, provided I stress the ‘preliminary, drafty, subject-to-revisiony nature of the text’. Done.

The summit is about a lot more than aid – for example the rich countries putting their houses in order on tax havens. Which is just as well, because the book poses some real challenges to the whole ‘anti-corruption’ narrative on aid. What’s more, it is erudite, engagingly written and upbeat – as you’d expect given Charles’ optimistic previous takes like Getting Better. He’s got a great eye for telling research and ‘man bites dog’ surprise findings. Example: ‘Taking a cross section of countries and comparing current income (2010) to corruption perceptions in 2002 and income in 2002, results suggests more corrupt countries in 2002 have higher incomes in 2010.’

His core argument is pretty striking – when it comes to aid and corruption, corruption does indeed matter, but the cure is often worse than the disease: ‘an important and justified focus on corruption as a barrier to development progress has led to policy and institutional change in donor agencies that is damaging the potential for aid to deliver development.’ Ouch.

10 reasons to apply for World Bank-Annenberg Summer Institute

Roxanne Bauer's picture

How can professionals looking to lead reform initiatives find the best way forward?

They can start at the World Bank-Annenberg Summer Institute in Reform Communication: Leadership, Strategy and Stakeholder Alignment, held at the University of Southern California in Los Angeles, May from 23- June 3, 2016.

The course is designed for leaders, strategists and advisors who want to strengthen the critical competencies necessary to support change agents and reform initiatives in developing countries.  

If this sounds like you, but you need a little nudge, check out these 10 reasons why attending ​the Summer Institute is a good decision​.

Busting 5 myths on political-economy analysis

Stefan Kossoff's picture
A young Egyptian protester holding an Egyptian flag, Cairo, Egypt. Photo: Kim Eun Yeul / World Bank


“There has been a broad recognition amongst economists that “institutions matter”: poor countries are not poor because they lack resources, but because they lack effective political institutions”. Francis Fukuyama, the Origins of Political Order, Vol 1 (2009) 
 
For development professionals, there is no getting away from the fact that politics shapes the environments in which we work—that our programs can and do fail when we don’t take politics into account. But despite growing evidence that political economy analysis (PEA)  can contribute to new ways of working and ultimately better results, the politics agenda remains what Thomas Carothers calls an “almost revolution” in mainstream development practice.
 
There are many factors at play: limited staff capacity to engage with politics, bureaucratic incentives to meet lending targets, a preference for best practice solutions and institutional blueprints. Many continue to argue that it is not the business of development banks or aid agencies to analyse politics, let alone act on key findings. This resistance is posited on several arguments—or myths—which I address below.

The Challege of Doing Development Differently

Suvojit Chattopadhyay's picture

The Doing Development Differently workshop was organised by the Building State Capacity gang at Harvard’s Center for International Development and the Overseas Development Institute; read more about the workshop here. I was unfortunately able to only attend Day 1 and a tiny bit on Day 2 but caught up through all the videos that are online. See Day 1 summary; and Day 2 summary
 
Here are some thoughts:

  1. Doing Development Differently (DDD) is the big picture: DDD is about the details and the beauty of innovation and creativity on the ground, but, more importantly, it is about the big picture. As the workshop signalled (at least) to me, the battleground for DDD conspirators/crusaders is the top table, with donors and policymakers, the moneybags, decision-makers and influencers. Expressed in an extremely clichéd way, the goal ought to be to facilitate ‘d’ on the ground by changing the rules of the ‘D’ game. This makes sense to me. Gathering and influencing activists and local champions is a necessary but not sufficient condition for real change. At the same time, this workshop definitely missed a trick by not having participants from governments (I am sure the organizers considered this long and hard), which in many middle- income countries have come to be all of the above actors – the moneybags, the policy/decision-makers, etc. For DDD thinking to go beyond just aid, it is important that governments are included in these conversations.

Deep Structure: Tensions in the Emerging Governance Agenda?

Hamish Nixon's picture
New Directions in Governance
With Mario Marcel, Senior Director Governance Global Practice, World Bank, and Jonathan Hargreaves, Head of Governance, Open Societies and Anti-Corruption Department, UK Department for International Development (DFID)
Photo Credit: ODI

From September 17-19 the World Bank’s Governance Partnership Facility (GPF) and the Overseas Development Institute (ODI) hosted donors, researchers and consultants in London to look back at the GPF’s experience, and forward at ‘new directions’ in governance. The ‘governance crowd’ broadly agrees that their work, to be valuable and valued, must be connected to politically informed programmes, better services, and ultimately development outcomes. This consensus now even extends to the bastion of public financial management.

In practice, this connexion involves understanding political factors that drive institutional change and development, and using these understandings to improve development assistance: ‘thinking and working politically’. There are now many tools for political economy analysis, and there is a growing literature on what politically informed development programming can achieve, including a recent World Bank volume, and case studies from ODI, the Asia Foundation, and the Developmental Leadership Programme.

Can a Political Economy Approach Explain Aid Donors’ Reluctance to Think and Work Politically? Guest Post from Neil McCulloch

Duncan Green's picture

The more enlightened (in my view) aid types have been wagging their fingers for decades, telling their colleagues to adopt more politically literate approaches to their work. Why isn’t everyone convinced? Neil McCulloch applies a bit of political economy analysis to the aid business.

Over the last fifteen years or more, a new approach to development assistance has been gaining ground in policy circles. Broadly entitled the “political economy” approach, it attempts to apply a more political approach to understanding development problems and, importantly, development “solutions”. In particular, a central tenet of the approach is that many development problems are fundamentally political rather than technical and that therefore solutions to these problems are most likely to come from inside a country’s polity than from outside. Perhaps the most famous recent example of this line of thinking is Acemoglu and Robinson’s 2012 book Why Nations Fail.

Acemoglu and Robinson conclude that if each nation’s fate depends primarily on its domestic political struggles, the role for external development assistance is minimal. However, the response of practitioners to this field is to turn this argument on its head i.e. that is, if indeed each nation’s fate depends primarily on its domestic political struggles, development assistance should be trying to influence these struggles in ways that make pro-development outcomes more likely. Yet despite more than a decade analysis, the political economy “approach” is still rarely used by donors in the field. Why? I think there are four reasons:

Surprise, Perhaps the Only Way to Expand Reform Space Is…

Sina Odugbemi's picture
An important, new World Bank study has fascinating news. The study is Problem-Driven Political Economy Analysis: The World Bank’s Experience (Verena Fritz, Brian Levy, and Rachel Ort, Editors). Problem-driven political economy analysis is an approach that encourages those who want to implement governance reforms to:
  • Start the diagnosis with a focus on the problem to be solved, the challenge to be confronted (not general, big picture analysis for its own sake);
  • Probe why the bad equilibrium exists/persists by investigating the roles of (a) structural factors (b) formal and informal institutions…the rules of the game and (c) stakeholder interests, networks and power; and
  • Find a feasible path to reform/change in the specific context.

Getting to The 'So Whats': How Can Donors Use Political Economy Analysis to Sort Out Bad Governance?

Duncan Green's picture


Close but no cigar. Just been reading an ODI paper from a few months ago, Making sense of the politics of delivery: our findings so far, by Marta Foresti, Tam O’Neil and Leni Wild. It’s part of the ODI’s excellent stream of work on governance and accountability (see my review of David Booth and Diana Cammack’s book) and repays close study.

The starting point is the widespread disillusionment in DFID and elsewhere with ‘political economy analysis’ (PEA), memorably summed up by Alex Duncan’s definition of a political economist as ‘someone who comes and explains why your programme hasn’t worked’:

‘There is no doubt that PEA has helped answer some of these questions [why stuff doesn’t work]. Yet many would say that researchers have not found a middle ground between generality and specificity. On the one hand, the use of catch-all concepts, such as political will or unspecified incentives, fail to provide enough analytical purchase on which to hang entry points for reform. On the other, if we view every context and problem as sui generis, experience cannot be used to construct theories of change that in­clude learning across programmes and contexts.’

"Check My School" and the Power of Openness in Development

Johanna Martinsson's picture

There has been a lot of buzz lately around open development, and new initiatives seem to be popping up everywhere. My colleague Maya talks about what open development means exactly in her blog and Soren Gigler discusses openness for whom and what.  Soren points out that “openness and improved accountability for better results are key concepts of the Openness agenda.” However, he cautions that openness is not a one-way street.  For positive impact, citizen engagement is crucial and it’s important to “close the feedback-loop” through the facilitation of information flows between citizens, governments, and donors.

In light of this, a prime example of a successful initiative with an innovative citizen-feedback mechanism is “Check My School” (CMS) in the Philippines. Launched by the Affiliated Network for Social Accountability East Asia and the Pacific (ANSA-EAP) just a little over a year ago, it has managed to get real results on the ground.  The results and lessons learned were shared at an event held last week at the World Bank. The speaker was Dondon Parafina, ANSA-EAP’s Network Coordinator.

At The Cutting Edge of Governance: Final Day

Sina Odugbemi's picture

The third and final day of the workshop on 'Implementing Effective Country Level Governance' (Cape Town, South Africa) looked to the future. But, in a sense, it was not possible to look ahead without looking back at the same time. Again and again, participants reflected on the amazing road already travelled. Stories were told of the time when the World Bank and other donors would not discuss the terrible scourge of corruption in developing countries, let alone the role of politics and political institutions in either enabling or hampering development results. Yet now, all these things are part of not only the agenda but concrete practice in the field. A director summed up the state of play succinctly:


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