1. Assessing Risks & Vulnerabilities: Emerging Good Practices
March , 2011
AMREF International Training Center, Nairobi
Sahr J. Kpundeh
11/16/2018
Sahr J. Kpundeh

2. “Emerging Good Practices”
Identify the underlying constraints and potential entry points for achieving reforms
Political Economy Analysis
Identify governance & corruption risks at the sector and project level
Value Chain Analysis
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Sahr J. Kpundeh 2

3. Governance Issues at the Sector Level
Primary focus is on constraints to achieving optimal service delivery
Key areas include:
Policy & incentives
Budget & resource management
Human & institutional capacity
Important to distinguish between governance issues, corruption issues, and simply capacity constraints
11/16/2018
Sahr J. Kpundeh

4. Corruption Issues at the Project Level
Who?
How much?
And where does it all go?
T he impact: outcomes, competition, value for money, and public perceptions
The Anatomy of Corruption: How it works in Bank projects?
11/16/2018
Sahr J. Kpundeh

5. GAC in Projects: the Role of Political Economy Analysis
Political economy analysis: an emerging practical framework
GAC in Projects: the Role of Political Economy Analysis
May 26, 2010, Dakar, Senegal
Sahr J. Kpundeh

6. What is political economy analysis?
PE analysis can promote development effectiveness by helping to develop approaches that take contextual factors (systematically) into account
Cross-cutting and complementary to technical analysis, and analysis aimed at identifying priorities
Political Economy Analysis is concerned with the interaction of political & economic processes in a society:
the distribution of power & wealth between different groups and individuals,
the processes that create, sustain & transform these relationships over time (OECD/DAC)
11/16/2018
Sahr J. Kpundeh

7. Business rationale: why PE diagnostics?
Managing risks – developmental, reputational, and fiduciary – requires monitoring political trends rather than ignoring them
Bank teams are often ‘surprisingly’ surprised by policy decisions (or non-decisions) in client countries
Many teams & TTLs (already) spend a lot of time understanding politics – and it can be useful to systematize this more:
Bank strategies & operations based purely on technical analysis and best-practice approaches have often proven un-implementable
11/16/2018
Sahr J. Kpundeh

8. Three layers of problem-driven GPE analysis
Vulnerabilities& concerns
Evidence of poor outcomes to which GPE issues appear to contribute
E.g. repeated failure to develop solutions to lack of results in sectors. Infrastructure is constraint to growth but is not being improved
What are the institutional arrangements & are they capable, effective & efficient?
Why are things this way? Why are policies or inst. arrangements not being improved?
Mapping of institutions: laws, regulations; responsible public bodies; formal and de facto rules of the game; analysis of integrity/corruption challenges
Analysis of stakeholders, incentives, rents/rent-distribution, historical legacies & earlier reform experiences; social trends & forces and how they shape stakeholder actions
Problem driven
Institutional/ governance arrangements & capacities
Political economy
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Sahr J. Kpundeh

9. Problem-driven GPE can be applied to country, sector, or project level
Country level
Analysis of overall country context. Also as a background note for sector and project level work
Thematic and sector level
Thematic problem-driven GPE analysis, e.g. on natural resource management, linking governance and growth
Sector-focused problem-driven GPE to inform CAS pillars, sector strategies & Development Policy Loans, complementing technical sector analysis
Projects or policies
Analysis focused on generating direct advice to a single operation or for the dialogue on a specific policy issue (e.g. Prior Action)
11/16/2018
Sahr J. Kpundeh

10. Operational value added: Examples of value added
Spectrum of reform space
“Incremental” approaches – adapting design given existing reform space
“Transformational” approaches – seeking to expand reform space
Zambia telecoms: focus on local winners
India power: reform sequencing
Ethiopia PBS to mitigate reputational risk: support sub national service delivery with participation
WBG assessing water governance and building capacity in conflict setting
Mongolia mining: TA with local think tank for public debate
Paraguay & Bangladesh roads: external monitoring by stakeholders
Philippines public procurement reform: pro-active coalition building to combat entrenched corruption networks
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Sahr J. Kpundeh

11. When is GPE analysis most valuable for projects?
However, even if that is not feasible/did not happen, it can still be valuable to undertake GPE analysis during implementation
Project which (clearly) has governance risks – developmental risk (including risk of capture, etc.) and fiduciary risk
Usually, it is best to do the analysis upstream – i.e. as part of project preparation
Project-level GPE analysis is greatly facilitated when it is possible to draw on existing country-level (and possibly sector-level) analysis
Country-level analysis could be Bank produced or generated by other donors (e.g. DfiD, Netherlands)
11/16/2018
Sahr J. Kpundeh

12. Some key lessons
GPE diagnostics should be focused on particular challenges/questions/puzzles
Expectations from task teams & actual approach to PE diagnostic need to be well matched
Management attention is crucial and valuable
E.g. if analysis suggests that additional supervision effort is needed
Consider dissemination issues early on
Disseminating PE work can be sensitive
There are many options between 2,3 people only and full/broad dissemination
Ensure that findings reach relevant Bank teams
Ensure that key messages reach local stakeholders
Integrate PE diagnostics as closely as possible with other project preparation work
Pay attention to processes as much as to products
Process of producing the analytic output – including quality management
Follow-up process of using PE diagnostics for decisions – strategy or operational design, whether to adjust these, whether and how to engage in coalition-building for reforms, etc.
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Sahr J. Kpundeh

13. Thank you!