Summary: Why does development progress in some places but not others? Very often, the distinguishing factor is not a lack of financial resources or of knowledge about the right technical solution. Governments may decide to allocate agricultural services to their core supporters or to key swing voters and to deny them to others, thereby reducing the incentive for farmers to seek increases in productivity. Social health insurance benefits may be extended ahead of elections, but removed once elections have taken place. At the same time, political incentives play a powerful role not only in frustrating development efforts, but also in shaping opportunities for change. Often, there are various stakeholders-within government, in the private sector, and in civil society-who want to change what government does for the better. However, in many situations, advice based on technically optimal solutions is not that helpful for potential reformers because such solutions may not be politically feasible nor may even backfire and have unintended negative consequences. The general problem that political incentives are frequently at odds with a technocratic approach to development has long been recognized. Politicians prefer policies and seek institutional changes that support their current needs, including exigencies such as horse trading when negotiating over policies with other powerful stakeholders or designing intergovernmental relations with a view to maintaining some form of centralized control, rather than optimizing service delivery. At the same time, the interests of politicians can also broadly converge with development objectives, such as seeking to deliver growth, jobs, or social protection benefits as a way to secure legitimacy or reelection. This book is a result from a systematic effort at taking stock of what the World Bank has learned from its efforts to mainstream Political Economy Analysis (PEA). The effort included an open invitation to staff members active in the area to submit their work for presentation and discussion at a 2012 review conference. The goal was to identify work that was strong analytically and that provided practical recommendations that resulted in action. The book is thus intended to illustrate (and reflect on) what the Bank has been able to achieve in this area so far and to help others learn more about how PEA perspectives can be effectively integrated into development approaches.
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