Uncovering Hidden Realities with Political Economy and Power Analysis

28. June 2021

Our lives are shaped by the family and place we are born into as well as the myths that societies collectively believe, such as the role of the nation state or even the concept of money. As Yuval Noah Harari writes in Sapiens: A Brief History of Humankind, “Myths give Sapiens the unprecedented ability to cooperate flexibly in large numbers.” These shared beliefs not only connect individuals, they also influence the way large-scale human cooperation unfolds—who’s “in” or excluded—and thereby further shape the society we live in.

Acknowledging unwritten rules

Society, as understood by system thinkers, is a complex and ever-changing system with a diverse set of components interacting in non-linear ways. Any decision-making in a society is subjected to a set of drivers that either disrupt or maintain the status quo. As an example, consider the respect of land rights of indigenous people. While these rights are usually embedded in a constitution, extractive industries do not always respect these rights and inconsistent accountability instruments enable this. One could wonder: Who benefits from or gets harmed by these practices? Who has vested interests in maintaining this status quo? Investigative journalists sometimes afford us a glimpse into the backstage dynamics and concomitant power relations at work in and between countries, organizations, communities and individuals.

While rules and practices in society do change, some realities remain invisible, ignored or taken for granted by large sections of society. For example, deeply institutionalised racial and gender-based discrimination remain persistent despite some actions aimed at preventing and tackling bias through laws or regulations. The emergence of the #MeToo and #BlackLivesMatter movements and popularity of books like My Grandmother’s Hands by Resmaa Menakem or Unwell Women by Elinor Cleghorn highlight increased awareness of their historical, socio-economic and political context. They evidence a non-acceptance of contemporary systemic discrimination running as a thread deep through our society and perpetuating inter-generational trauma—again further shaping the family we grow up in and the society we live in.

Societal intersections with development cooperation

Such dynamics are also at play in the contexts we intervene in through international development cooperation. Development actors often have systemic ambitions, aiming to generate sustainable changes for the common good with social benefits for all. A good starting point to make these happen, before injecting financial and technical resources into the system, is the identification of politically feasible strategies. That is where a political economy and power analysis comes into the picture.

Two decades ago, the development world reached the conclusion that a lack of progress in achieving development goals is not simply correlated to a shortage of financial resources or of knowledge about the right technical solutions. Alina Mungiu Pippidi, a professor of democracy studies and anti-corruption expert, highlights in her research that despite unprecedented (inter)national anticorruption efforts and investments over the last 20 years, most corrupt countries remain at least as corrupt as before. She has tirelessly worked on providing a framework to inform evidence-based anticorruption efforts and demonstrates in her publications the systemic nature of corruption, and the importance of understanding the political economy and power relations related to corruption to successfully address it.

The United Kingdom’s Department for International Development introduced its “Drivers of Change” analysis and a plethora of related approaches and tools have been developed since around thinking and working politically, political economy analysis, power analysis, and many others. When the 2007-2008 global financial crises hit, a drop in aid volumes was accompanied with an increased momentum of their application. The goal was to create new leverage to achieve better impacts through development cooperation investments. In other words: act smarter with less means.

How to act smarter with less means

Political economy and power analysis (PEPA), two distinctive but complementary approaches that apply a gender and social equity lens, are combined to gain an in-depth understanding of how power operates and the way the system works—or doesn’t work—for all.

PEPA helps to discern the political and economic incentives and constraints that shape the willingness and ability of system actors at various levels—whether governmental, non-state or private sector—to act in pursuit of identified development goals. This approach also identifies where the human agency lies, with a vested interest in changing (or maintaining) the status quo. It also seeks to uncover factors that prevent such agency from flourishing. Put simply, PEPA helps to be more realistic about what changes can be pursued, at what pace, with whom and for whom.

PEPA insights are gained by looking at the drivers of change. This process includes (1) mapping key system actors, both at the individuals and organizational level, and ranking their influence, motivation, knowledge, capacities and skills, access to resources and their relationships; (2) identifying the nature and existence of spaces in which influence is exercised through participation; (3) acquiring an in-depth understanding of informal and formal rules governing the system; (4) identifying key resource flows; (5) and gaining insights into possible exogenous (e.g. volume and support modalities in international development cooperation) and structural factors, such as demography and history, shaping the system.

In RisiAlbania, a youth employment project of the Swiss Agency for Development and Cooperation implemented by Helvetas, a PEPA analysis was used to uncover systemic bottlenecks for local, sustainable and inclusive development. Kolonja municipality, located in Southeastern Albania, is a poor rural community with few prospects for sustainable development. It is characterised by low income levels, widespread poverty, and—as a result—a high rate of outmigration to urban areas and abroad, especially for young people. The productivity of local agriculture is low, despite considerable economic potential, especially with regard to the medicinal and aromatic plants (MAPs) value chain. The municipal government wants to accelerate rural development, with a focus on cultivation of MAPS. A thorough actors and power analysis showed weak links within the private sector, including between local farmers/cultivators and processing units; between municipal authorities and relevant market actors such as buyers; and between local, regional and national authorities. A closer look at recent laws and regulations and their implementation showed that municipalities do not make use of their leeway to allocate public land for local producers since there is a lack of understanding of level of authority, overlapping roles and conflicting responsibilities. These PEPA insights have been used to foster rural development in Kolonja municipality through initiating strategic advocacy and moderating dialogue between various actors with the goal of better defining roles and responsibilities.

The Decentralisation and Municipal Support (DEMOS) project in Kosovo offers another example of incentivizing behavioral changes in local governments and increasing pressure to challenge formal and informal norms of society. Challenges are tackled through performance-based grants. Annual performance is measured in core “challenge” areas such as horizontal and vertical accountability, recruitment, and appraisal of civil servants and clientelist networks. The grants provide financial incentives instead of supply-driven technical assistance to improve municipal service delivery. The grants are used by municipalities to compete with peers and to showcase their good work and responsiveness to constituencies. This performance data is also used increasingly in decision-making processes and in electoral campaigns. When issues arise, they are addressed through the Kosovo system rather than the project because of the multiplicity of incentives created through the performance grant.

When conducted by a diverse and inclusive team where trust is present as well as an in-depth knowledge of the local context, PEPA makes development partners aware of their own assumptions in relation to these drivers of change. It helps team members confront their unconscious bias and make their assumptions explicit, shared and more rooted in reality.

Actioning the analysis

The key to success after a PEPA analysis is to avoid analysis paralysis; be pragmatic and translate the generated knowledge into a theory of change as a blueprint for inclusive systemic development. The key for implementation is to convene diverse system actors and broker multi-stakeholder gatherings that represent different interests and are capable of forging coalitions that have entry points into the system for greater catalytic effects.

However, dilemmas do arise. For example, when cooperation is required with dissidents as well as with the ruling governments, a concern raised by political sociologist Robin Luckham. How does one legitimately reconcile this as a development actor?

Through the implementation process, incentives of key stakeholder groups and actors can sometimes be altered. However, in order to avoid blockages, it can be a better strategy to adapt to existing incentives and informal practices. Questions also arise about basic human rights and good governance standards when working with dysfunctional (sub-)national governments or traditional leaders: how about basic human rights and “good governance.” In some cases, it is recommended to wait until better prospects for change arise. Timing matters, and when change happens it is important to ensure that it is not captured or reversed by ruling elites. In other words, implementation is often a paced process that brings about incremental change, whereas more rapid, transformational change can sometimes be induced by the positive dynamics underpinning tipping points. Keeping a finger on the pulse is of paramount importance to continuously learn and reassess shared assumptions, and sometimes agility is required to redirect efforts.

For more information about the Helvetas approach to political economy and power analysis, download the newly released Helvetas PEPA manual. Guidance to develop a realistic advocacy strategy can also be found in the Advocacy Toolbox.

Sylvia Kimpe is a Governance and Civil Society Advisor at Helvetas. Other contributors to this article include: Valbona Karakaci and Bernd Steimann (advocacy), Clara García Parra and Gramos Osmani (RisiAlbania), and Ertan Munoglu (DEMOS).

This article appeared in the June 2021 issue of Helvetas Mosaic. Subscribe to never miss an issue.

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