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Political Economy


The Political Economy of Reform: Moving from Analysis to Action

CommGAP and the World Bank Institute's Governance Practice organized a workshop on June 21 - 22, 2010, entitled The Political Economy of Reform: Moving from Analysis to Action. Learn More »


The Political Economy Community of Practice is a joint endeavor, led by Public Sector & Governance (PRMPS), Social Development (SDV) and the World Bank Institute (WBI), with representatives from across regions and anchor units.

The Political Economy Community of Practice spearheads, facilitates and promotes the World Bank’s work on political economy. Our goal is to support colleagues in delivering appropriate, high quality analysis and other operational support including by:

- Conducting political economy work at country, sector and project levels.
- Provide quality support of political economy work.
- Knowledge management, acting as contacts for identifying and disseminating good practice examples and providing robust and accessible guidance.
- Designing and delivering internal and consultant training on political economy analysis – including country and sector/project levels.

Why does political economy matter for Bank operations?

The Bank has been conducting political economy analysis for years but new collaborative efforts are driving more operationally relevant assessments where learning and knowledge sharing are incorporated much more strongly. Governance and political economy factors play a critical role in shaping development effectiveness and development outcomes. The political economy approach can add value to operational teams as a tool to improve project design, promote better risk management, and reduce misdirection and misallocation of funds.  It is particularly useful in enhancing Bank strategies (e.g. Country Assistance Strategies (CAS), sector strategies) and operations, and in finding ways to change Bank programming if a ‘best practice’ technical approach has not been accepted, is not implemented and/or produces negative unintended consequences.

While linked, there is a difference between the ‘good governance’ and political economy agendas. The ‘good governance’ agenda is more normative, and generally organised around ‘gap analyses’ coupled with promotion of best practices.  The political economy agenda aims to understand more deeply why decision-makers act the way they do (i.e. what are their actual incentives), and what are feasible ways forward.

Good Practice Examples

There are good examples of political economy analysis for countries, sectors, projects as well as for specific themes across all regions of the Bank. There is no single method or approach for political economy analysis as it needs to vary according to the situation. The cases highlighted are considered to be helpful in guiding Bank staff, country or sector managers in what has been done and what can be learned for new analysis and implementation. For each example, a summary overview seeks to capture the problem(s) addressed by the initiatives, the main findings, the approaches used, and the main impacts on the Bank’s engagement and operational design and implementation. The examples presented here are accompanied by relevant supplementary documentation. Learn More »

Operationally Useful Approaches

There are a range of approaches towards political economy analysis both within the Bank and externally. This reflects different intellectual origins of the work – e.g. sociology, political science, economics etc. – and varying institutional perspectives, and is also strongly linked with the reality that political economy analyses have to be tailored to the country/sector or project in question. However, there is commonality regarding some key elements: i) the importance of understanding how policies and politics interact to produce results (with regards to economic growth and poverty reduction overall, and in specific sectors and localities), ii) a shared concern with operational relevance, identifying solutions and opportunities for reform and iii) an emphasis on actors, institutions – including political systems (such as electoral incentives and their implications) – as well as trajectories over time. Learn More »

BANK Activities Supporting Political Economy Work

There is a great deal of work being conducted on political economy in all regions of the Bank and across a variety of sectors. Learn More »


A Political Economy CoP was created towards the end of 2009, and has been growing steadily since then: it has a core membership of around 40 Bank staff who bring a wealth of political economy experience across different anchors, regions and sector teams. There is also a larger group of around 150 more staff who are interested in this work. Want to hear more? Click here »


The Political Economy CoP would like to recognize generous support from the Governance Partnership Facility for its work. GPF funds support both the PE CoP and numerous projects which have political economy assessments or components. The GPF Trust Fund is supported by Norway, the Netherlands and the UK. The GPF page provides further information about the program and the activities it supports.

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