1. Incorporating Political
Economy Analysis into
Decentralization Projects

2. Starting Premise
• Decentralization is a diverse and complex phenomenon.
• Decentralization reforms could likely be designed and
implemented more effectively if more attention were paid to
political and institutional dynamics.
___________________________________________
More political economy (PE) analysis

Better decisions by DP staff

Better outcomes

3. Goals
• To demonstrate how PE analysis can help to illuminate the
political and institutional factors that have been most
conducive to (and most obstructive of) decentralization adoption
and implementation
• To advocate for greater pragmatism and flexibility in
decentralization reforms, which is particularly critical in the
changing (and often quite volatile) political circumstances of
countries in which development partners operate

4. Politicians’ Incentives
• What drives politicians to decentralize?
– Politicians cite lofty goals for decentralization (i.e.
democracy, development, public security).
– But other, more immediate, narrowly political factors are usually
at play
• Need to move beyond ―political will‖ to decentralize: assessing
the “political incentives” facing politicians
• Politicians decentralize when it serves their political
interests, career paths, support coalitions and/or security of
tenure.

5. Bureaucrats’ Incentives
• Bureaucrats do not just implement decisions of politicians—
they are political actors in their own right who pursue
institutional and individual career interests
• Central governments are not monolithic entities—substantially
independent ministries with a stake in decentralization and
varying levels of power may have different interests and few
incentives to give up power and control over resources
• Some ministries have consequential internal divisions as well

6. The Dynamism of Context and
Incentives
• After decentralization is adopted reality sets in for once
complacent central agencies that did not protest decentralization
adoption
• Unintended or unexpectedly severe consequences may
arise from the implementation of decentralization
• Changes in power may motivate reassessment of positions on
decentralization
• Other major shifts in underlying conditions may reinforce or
undermine decentralization

7. Post Adoption Reactions
• Central government ministries that initially supporting politically
driven decentralization may reconsider when they later
understand the potential implications for their own
power, resources and influence
• Central agencies that did not see themselves as having a stake
in decentralization may decide to enter the field when they see
opportunities to benefit from being involved in or influencing
the process

8. Challenges
• There may be difficult decisions if there is a
political window of opportunity to support
reform
• Piloting innovative approaches, well
explained/disseminated analytical
work, educational/capacity building
efforts, and behind the scenes advocacy
can be productive

9. Some Questions
• Key Diagnostic Questions
– What is the fundamental nature of the official
decentralization policy and framework ?
– What motivates policy and does it seem genuine?
– Who are the key actors involved and how?
– Are certain actors more powerful than others and
what are the (likely) consequences?
– What seems to be the main agenda of the key
actors (are they acting consistently or at cross
purposes)?
– How have DPs been involved and to what effect?
– What progress has been made with
implementation? How has this been possible?
– What are the realistic prospects for further reform?

10. Some Questions
• Key Questions on Approach:
– How does/can decentralization relate to broader
underlying trends and policy trajectories?
– In which specific areas of reform might value-
added activities be supported (and how do they
related to what others are doing)?
– What is the right timing (early on to help define
policy or after there is more clarity on direction)?
– Which actor(s) might the most productively work
with (traditional ministries, local
governments, local government associations)?