Political Economy Assessments at Sector and Project Levels

This how-to note provides a summary of the World Bank’s approach to Problem-Driven Governance and Political Economy Analysis. The approach draws on multiple analytical tools (e.g. stakeholder analysis, analysis of winners and losers, institutional and governance analysis, historical analysis, analysis of rents and risk assessments) and can be applied at different levels (e.g. macro level country assessment, thematic analysis, sectors and sub.sectors, development projects and single operational decisions). The common feature is that the analysis should be centred on a clear problem encountered in the World Bank’s work. The analysis typically takes place in four stages:

• Step 1 - Identify the problem or opportunity to be addressed through the analysis
• Step 2 - Map out the institutional and governance arrangements and capacities
• Step 3 - Drill down to the political economy drivers
• Step 4 - Propose recommendations on the way forward (an action framework)