Policy expertise

Political Economy of Reform

Policy Area
World Bank
August - December 2006
OPM contact

OPM worked with the World Bank’s Social Development Department analysing the political economy of reform in a selection of past World Bank development policy lending and project investments. Drawing on case study material from the water sector from agricultural market liberalisation, the study aimed to contribute to a better understanding and management of political economy issues in the design and implementation of policy reforms. Based on a desk review and interviews, we developed a framework to assess and manage political economy issues in World Bank operations. The work looked at both institutions, as ‘the formal and informal rules of the game’, and at the interests and incentives of different stakeholders involved in the reform process. Government and non-government stakeholders’ motivations were analysed in terms of the risk to reform posed by ideology-based or rent-seeking behaviour, and the extent to which stakeholders’ interests were taken into account when designing and implementing policy reform. Elements of good practice were drawn out and developed into a set of recommendations for future political economy-informed World Bank operations.

Associate Consultant