Political Economy Analysis

The term “political economy analysis” is not new, but it has gained new currency among development agencies. According to the OECD-DAC, “political economy analysis is concerned with the interaction of political and economic processes in a society; including the distribution of power and wealth between groups and individuals, and the processes that create, sustain and transform these relationships over time”.

This definition recognizes that power is essentially about relationships - between the state, social groups and individuals, or between the state, market forces and civil society. Unless we as development practitioners understand those relationships and the processes that change them, we will not be as effective in supporting the building of responsive, legitimate and resilient states.

Against this background, the Oslo Governance Centre is developing an approach for political economy analyses specific to the UNDP mandate, in order to support programming and policy processes including the facilitation of multi-stakeholder dialogues based on a rigorous analysis of country contexts and ongoing events.