Political economy and stakeholder analysis

OVERVIEW

What is it?

Tool 5 consists of two matrices and a graphic visualisation:

• the Institutional and political economy context scanning matrix enables identification of institutional and political economy factors shaping sector performance;
• the actor assessment matrix and stakeholder analysis support detailed analysis of possible stakeholders, their interests and resources (power sources);
• the circle of influence graphic provides a visual overview of actors' relative positioning based on the two matrices.

What can it be used for?

The tool enables a simple but clear mapping of current key factors and stakeholders which will influence the success of the intervention. It facilitates:

• assessment of the main institutional and political economy factors which may enable and/or constrain the capacity and performance of relevant stakeholders in the sector/field of intervention;
• identification of potentially relevant stakeholders and their positions (support/resistance) towards the intervention (interests pursued, resources/power for influencing, importance or salience attached);
• development of a baseline to assess changes in relationships among stakeholders over time, and helps in establishing the basis for a realistic policy dialogue;
• strategic-level thinking by systematically taking into account pulling and pushing factors, resistances and opportunities.

When can it be used?

The tool provides information on the current playing field and is thus particularly relevant at the identification and formulation phases. As the context of the intervention evolves, the tool allows for keeping track of changes related to factors, stakeholders and their relationships.

Who can use it?

• EU staff and relevant partners.
• Can be used individually (as preparatory work) or collectively (in working groups).

What are its strengths?

• Highly practical and adaptable mechanism to visualise and assess current contextual factors and the positions, interests and power of stakeholders.
• When performed with partners, it can highlight information gaps and participation deficits, enabling identification of less known actors, for further investigation.

What are its limitations?

• Information initially provided is often based on individual or group perceptions and must be verified.
• Can be trivial or superficial, particularly if made in a short time in a workshop or brainstorming setting, as matrices can oversimplify complex situations. Complementary qualitative data collection methods should be applied to obtain a more accurate picture.

PRACTICAL APPLICATION

Key elements

The tool provides three instruments which should ideally be used in sequence:

1. Matrix on Institutional and political economy context scanning. Framed as a checklist, the matrix serves to assess influential institutional and political economy factors across sectors/areas of the intervention. Each dimension (e.g. policymaking, resources, organisational capacity) contains a series of statements which have to be weighted , scored and analysed in terms of the implications for the area of intervention. As a result, the checklist facilitates an understanding of whether the sector/area of intervention has suitably conducive circumstances or if there are elements which may hinder its readiness for change.

Actor assessment matrix. Framed as a checklist, in which columns correspond to assessment criteria and rows to significant stakeholders. The analysis of the different criteria may be summarised on a three-point scale.

Table 1: Key elements of the actor assessment matrix

Circle of influence. This graphic enables visualisation of the relative positions of stakeholders with regard to the sector/field, according to the ranking obtained in previous exercise. The closer a stakeholder is to the centre, the more influential that stakeholder is.

Figure 1: Circle of influence

The combination of the three instruments can serve to evaluate the current situation (what the picture says and if there are missing elements and components) and inform the next steps to be taken (engagement strategies, change management, policy dialogue).

Requirements

Data/information. Preliminary knowledge of the context is very useful, as many actors may be informal and therefore difficult to identify. The starting point is often a literature review, followed by workshop/brainstorming to collect further information. The information is then analysed and structured.

Time. The tool has been designed to be a flexible instrument which can provide relevant information in a short time. With the support of a specialist with a deep understanding of the context, and a facilitator to help organise larger meetings (workshop, brainstorming), this analysis can be conducted in two to four weeks.

Skills. The literature review can be performed in house, but specific competencies such as facilitation skills or technical expertise in the sector/actors may be required to explore and assess stakeholders in more depth. Local expertise can bring added value based on knowledge of local contexts, formal and informal actors and interests which are not always explicit.

Facilities and materials. If a participatory workshop/meeting takes place: appropriate venue, flipcharts, cards, markers, etc., will be needed.

Financial costs and sources. If external expertise is required, funds should be made available to cover the costs associated with fees (for approximately two to four weeks), travel expenses and logistics. These funds may come from the project itself or through other EC instruments such as a framework contract or a technical cooperation facility.

Tips and tricks

• Before performing the analysis, determine whether it is intended to be shared with partners or is part of the internal preparation for strategic decision-making. This will influence the way in which next steps are taken.
• The tool cannot work in an abstract context. It is crucial to start from a clearly defined issue or at least a 'direction of change' in terms of outcome and indicative outputs.
• Matrices and graphics are intended to facilitate and visually support the planning process. Criteria and parameter presented in the tool can be changed and adapted to specific needs.

RESOURCES

Where to find it

The European Commission (EC), 2010. EuropeAid. Tools and Methods Series. Reference Document N. 6 Toolkit for Capacity Development

Complementary guides, methodologies and tools

• The European Commission (EC), 2010. Tool 5- Political economy and stakeholder analysis. Tools and Methods Series. Reference Document Nº6. Toolkit for Capacity Development. Pages 37-44.
• Overseas Development Institute (ODI), 2006. Stakeholder Analysis. Mapping Political Context: A Toolkit for Civil Society Organisations. Pages 26-28.
• Performance and Effectiveness Department Department for International Development (DFID), 2003. Stakeholders analysis. Tools for development. Chapter 2.
• The International Bank for Reconstruction and Development / The World Bank, 2007. Stakeholder Analysis Matrices Procedure. Tools for Institutional, Political, and Social Analysis of Policy Reforms. Pages 126-133.