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 has developed 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. The approach is called Institutional and Context Analysis (ICA) and can be used in any sector and in various stages of the project/programme cycle. In November 2012, the Associate Administrator launched the Guidance Note on Institutional and Context Analysis, underlining that we need to understand the political context when we carry out development programming. You can access the Guidance Note here.
More on the OGC
UNDP established the Oslo Governance Centre in Oslo, Norway in 2002 as part of its global policy network for democratic governance, at a time when it had become clearer than ever that the fundamental issues of democratic governance are critical for meeting the Millennium Development Goals adopted at the Millennium Summit in 2000. The Oslo Governance Centre is an integral part of the Democratic Governance Group (DGG) in UNDP's Bureau for Development Policy (BDP).