What is Political Economy Analysis (PEA) and why does it matter in development?

Another great piece/links round-up from Graham Teskey – an internal briefing at his workplace (Abt) that he’s happy for me to share 

Political economy analysis (PEA) refers to a body of theory and practice that was first identified by the great economists of the 18th and 19th centuries. Indeed, economics was originally termed ‘political economy’. It was only when mathematics intruded that the word ‘political’ was dropped. Political economy is concerned with how power and resources are distributed and contested – and how this affects the distribution of income and wealth in any country.

We are concerned with what the distribution of power and authority means for development outcomes. The starting point is always an analysis of the political reality of the country in which aid is being delivered – understanding why things are as they are, and not like something else. PEA has long-standing roots in political science, see e.g. Elinor Ostrom, but its systematic application in development has only been relatively recent (the past couple of decades). Several communities of practice are committed to building a better understanding of how the political context shapes development outcomes and influences the way donor agencies work.

It is useful to understand a little PEA history, conceptual underpinnings and analytical approaches, the evolving discourse and the communities of practice that inform the ways of operating that are politically smart as well as politically informed.

What is PEA and why do we do it?

Rapidly evolving discourse

Communities of practice – quick overview and history of the key CoPs: TWP / PDIA/ DDD and Adaptive Management

Glossary of terms – see here

“Thinking politically” – PEA framing and tools

It’s all about the framing

A major critique of PEA has been that it highlights constraints to aid effectiveness without necessarily offering solutions.

To be relevant and actionable, political analysis needs to identify tangible entry points, and be integrated into programming right from the design stage.

In this way, PEA is best conceived not as a one-off consultancy input or study, but as an internal, transformative process to encourage donor officials to ‘think and work politically’ every day. 

The PEA discourse notes that for programs to be operationally relevant, PEA analytical frameworks draw from a mix of analytical tools to better understand how politics and economics intersect to solve a particular development problem by designing and implementing politically responsive programs. 

Finally – suggest you print off the DLP ‘Everyday Political Analysis’ seven page brief and keep it by your desk. If you do you will be doing PEA every day…

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10 Responses to “What is Political Economy Analysis (PEA) and why does it matter in development?”
  1. David Waller

    Despite the excellent reference to PDIA fishbone approach, the overall thrust of the PEA described in this really useful article is that PEA is about strengthening our approach as outsiders to designing and delivering aid programming. That’s fine – the quality of aid programming is improved by using PEA – but it nevertheless reinforces a way of working that treats those we seek to help are passive beneficiaries rather than active agents of change. Despite our wishes and rhetoric around empowerment and locally driven, in practice our behaviors treat the recipients of our well designed projects as passive beneficiaries of our well designed projects rather than active citizens who are developing the skills and confidence they need to bring about the changes that they prioritise in their own societies through influencing all the agencies delivering services including aid agencies.

    Surely it is through citizens themselves learning about their own political economy and developing the skills and confidence they need to be able to navigate and influence it, that will bring about sustainable change, not through us having ever more perfectly designed PEA-based programs. This matters because the base assumption that it is outsiders – both international and national – who know best about the lives of extremely marginalized groups, only adds to their sense of disempowerment as aid agencies arrive and tell communities what they are going to do during the mobilization phase of their programs. However well designed the project is, it leaves the intended beneficiaries disempowered and passive…..which the aid community then complains about!

    • David is spot on. The insights of PEA should lead us to support local vision and initiative for change. That is the linchpin for solving the outsider’s dilemma (as I call it). I am encouraged by DDD, PDIA, and efforts like #shiftthepower and Southern Voice that recognize the exercise of institution building must be an insider’s game. As outsiders, we can support the capacity building of local NGOs committed to development, but we should stop thinking within the old framework that has us solving the problem from the outside on behalf of locals. This might present an existential crisis for some and the roles they wanted to play in their careers, but it’s the logical conclusion of agency-based thinking.

    • Agree with both these posts of course…. but surely PEA teaches us that our aim is for countries and partners to be the subjects of their own development, not the object of ours. I would hope that at the analytic, design and implementation stages a relentless focus on agency (one of the not-so-holy trinity of institutions, structure and agency) would address this issue. If it isn’t, something has gone awry….

  2. Sina Odugbemi

    Clear and helpful Graham. Thanks! The one lesson that I have learned is that this approach is great when local implementation teams take it on board. And adapt the approach to the flow of political events that will necessarily have an impact on who the relevant players are/become.

  3. As international development practitioners trying to embed context analysis more systematically in our work, the question of who PEA is for, and the insider/outsider roles within it are issues that we’ve been grappling with at INASP too. The other big one is as Graham outlines above: the challenge of operationalising PEA. There’s room for PEA models to engage much more closely with the operational ‘nuts and bolts’ of how development work is done, in order to be more applicable to the day to day realities of projects and to move from being a purely reflective/analytical exercise to one that’s more focused on concrete actions and decisions. We’d love to hear more from other small NGOs that have been exploring PEA approaches—we’re planning to share our own experience and some questions soon!

    • Graeme Ramshaw

      I would echo Emily’s experience on operationalising PEA. Our challenge has not been the ‘thinking politically’ – we see that constantly from our country offices. The difficulties have been 1) finding time and space within busy and sometimes rigid workplans to adjust programming on the basis of ongoing political analysis and 2) finding a process/format for documenting this ongoing analysis that is judged ‘rigorous’ by our donors but doesn’t impose overly burdensome constraints on our staff. We’ve got some great learning from a programme we’re running in the Western Balkans where both of these constraints have been specifically addressed, resulting in a much better process for all concerned.

  4. Emily, and others, I’d be happy to chat with you (and John Young) about our experience at Global Integrity. Our refreshed strategy on “Listening, learning and adaptation” is very much along the lines suggested in the comments from you, David, Matt, Sina and Graeme. Which is Graham notes are ways forward that (should) flow from focusing on the political economy dynamics of governance and development challenges. More here https://www.globalintegrity.org/2020/04/20/listening-learning-adapting-a-strategy-for-uncertain-times/

  5. Thanks for the great discussion and very useful links! What seems to be missing however are tips and cases on how to tackle dilemmas and trade-offs. PEA indeed enables a more context-informed response that relies on local agency. But what do you do in situations where illegal actors (like smugglers) become the only source of investments in a collapsing local economy (e.g. they will pay for the repair of the village water system) or are the key providers of employment (who hire local boys to be drivers or ride camels)? These unusual actors are often found in places where state institutions are absent, or which are too dangerous to visit for donor agency or INGO staff. Local villagers, exercising their agency, may give these smugglers refuge, and trade off short-term economic benefits with law and order. But how do you tackle this problem in the long-run? Could illegal actors be considered development agents too under certain conditions? Would be great to hear more cases, and what has been done or not done. Thanks.