Understanding Policy Change : How to Apply Political Economy Concepts in Practice
RULE OF LAW
PUBLIC SERVICE DELIVERY
CIVIL SOCIETY ACTIVISTS
TRAGEDY OF THE COMMONS
GROSS DOMESTIC PRODUCT
PER CAPITA INCOME
CIVIL SOCIETY ORGANIZATIONS
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AbstractThe introductory chapter sets the stage and outlines the logic of the rest of the handbook. First, we present the main learning objectives; second, we introduce the pedagogical approach, methodology, and structure of the book. This handbook is intended to introduce the concepts of political economy to a wide audience of development practitioners, including civil society activists, journalists, students, and bureaucrats. Since the target readers vary widely in their previous exposure to the subject matter, the book summarizes a vast academic field and presents a comprehensive repertoire of concepts, theories, and empirical examples. Rather than offering a 'do-it-yourself' framework, we opted for developing a step-by-step analytical puzzle. First, the paper introduces the core mechanisms of political economy and their inner logic, and, subsequently, we help our readers learn how to recognize these mechanisms in their daily development-related work. By the end of the book, the authors hope that readers will be able to: recognize core development problems stemming from the political-economic environment; link theoretical concepts to real-life situations; diagnose the symptoms and the root causes of malfunctions; and understand the short-term and long-term consequences of poor governance and low institutional equilibria. This handbook is also designed to provide trainers with some of the pedagogical materials they need to develop an introductory course on political-economy analysis for policy practitioners. The content focuses on the what, the why, and the how to of policy change. The readers or trainees will encounter key theories and concepts and learn how to apply the analysis to an understanding of their own policy-making environment. Pedagogically, the handbook uses interactive classroom exercises and the case study method to reinforce learning objectives and to capture the concepts, methods, experiences, and challenges relevant for practitioners. Structured learning activities at the end of most chapters and a comprehensive group exercise in appendix D will also give readers and trainers the opportunity to apply the knowledge and tools of political economy to simulated or specific development puzzles.
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The Political Economy of Policy Reform : Issues and Implications for Policy Dialogue and Development OperationsWorld Bank (Washington, DC, 2008-11)This study addresses the political economy of sector reforms. Sustainable reform processes which improve equity, efficiency and effectiveness in key economic and social sectors are often important elements of national poverty reduction strategies in low- and middle-income countries. For international development agencies wishing to engage in these processes, understanding the significance of power relations within the sector, vested interests, and the links to national political processes can be critical to being an effective actor in policy dialogue. This study explores these issues through the analysis of case studies of World Bank engagement in two areas: agricultural liberalization, and public-private partnerships in water supply and sanitation. The objectives of the study are twofold: (a) to analyze the political economy of reform by looking at stakeholder interests, incentives, institutions, risks, opportunities, and processes from a social analysis perspective; and (b) to illustrate 'what works, why and how' for a better understanding and management of political economy issues in the design and implementation of reforms and development operations. The study draws on operational experiences to inductively develop a conceptual framework that offers an innovative way to look at the political economy of policy reforms. The study presents a solid basis for a future program of work which can address these issues.
The World Bank and Governance : The Bank’s Efforts to Help Developing Countries Build State Capacityde Janvry, Alain; Dethier, Jean-Jacques (2012-11)This paper examines historically the World Bank's twin features: lending to developing economies to achieve tangible results and advocating specific development policies. Section 1 provides some conceptual underpinnings for the view that an effective state is essential for development. It asks whether development can be engineered, and state capacity increased, with large aid flows. Section 2 sketches the historical evolution of what characterizes the World Bank: lending to developing economies and advocacy of development policy. It concludes that, while the Bank discourse explicitly recognizes that developing countries need to improve their governance and build the capacity of the public sector to improve living standards, the Bank's performance in assisting governments in building state capacity and achieving better governance outcomes has been disappointing. Section 3 proposes an interpretation of why this has been the case. The interpretation is structural, and related to the way the Bank is organized. This concerns in particular (1) how its research is prioritized and used for decision-making, (2) how its leadership achieves a consensus between shareholders who hold different views on the role of government in the economy, and (3) how incentives for its staff emphasize disbursement and short-term success, and not capacity building and longer-term institutional sustainability.
Growth without GovernanceKraay, Aart; Kaufmann, Daniel (World Bank, Washington, DC, 2014-08-01)It is well known that there is a strong positive correlation between per capita incomes and the quality of governance across countries. the authors propose an empirical strategy that allows separation of this correlation into (1) a strong positive causal effect running from better governance to higher per capita incomes, and, perhaps surprisingly at first, (2) a weak and even negative causal effect running in the opposite direction from per capita incomes to governance. The first result confirms existing evidence on the importance of good governance for economic development. The second result is new and suggests the absence of a "virtuous circle" in which higher incomes lead to further improvements in governance. This motivates the authors' choice of title, "Growth Without Governance." They document this evidence using a newly updated set of worldwide governance-indicators covering 175 countries for the period 2000-01, and use the results to interpret the relationship between incomes and governance focusing on the Latin America and Caribbean region-within a worldwide empirical context. Finally, the authors speculate about the potential importance of elite influence and state capture in accounting for the surprising negative effects of per capita incomes on governance, present some evidence on such capture in some Latin American countries, and suggest priorities for actions to improve governance when such pernicious elite influence shapes public policy.