Putting Political Economy to Use in Aid Policies

Political economy analysis has been a favourite instrument among donors of development aid since roughly the turn of the century. Donors have emphasised the usefulness of such forms of analysis because they realised that their focus on the formal aspects of the social and political organisation of countries had caused them to overlook important elements of the “political economy” of these countries. As a result, political and governance reform programmes, which had become part and parcel of the agenda of development under the post-Washington consensus, turned out to be much less effective than anticipated.The call for donor agencies to “look behind the façade” of formal institutions in developing countries has thus come as part of the aid effectiveness agenda. It was argued that the effectiveness of development assistance policies would be enhanced if the realities of social and political power structures in developing countries were mapped and fed into the design of governance reforms targeting those countries. A more or less tacit assumption was that political economy analysis would enable donors to identify potential pockets of resistance to the reforms that they were advocating – hence improving the chances of getting reforms accepted

The Anti-Politics of Development: donor agencies and the political economy of governance

Abstract This article discusses the attempt undertaken by several development aid agencies since the turn of the century to integrate political economy assessments into their decision making on development assistance. The article discusses three such attempts: the Drivers of Change adopted by the UK’s Department for International Development, the Strategic Governance and Corruption Analysis (SGACA) developed by the Dutch Directorate General for International Cooperation and the new thinking on political economy analysis, policy reform and political risk advanced by the World Bank. On the basis of a political-economic interpretation of development agencies, two main factors are found to hinder the successful application of political economy assessment. In the first place, the agencies’ professional outlook leads them to see development in primarily technical terms. In the second place, the nature of incentives for development professionals leads them to resist the implementation o

Normative Power vs. Political Interest: EU Aid Selectivity beyond the European Consensus on Development, 2008-13

__Abstract__ This paper focuses on the ‘governance turn’ in the development policies of the European Union, represented in particular by the adoption of the ‘European Consensus on Development’ in 2005. The main assumption inherent in the EU approach to development is that the quality of governance in developing countries is a crucial (co-) determinant of development outcomes. The analysis concerns the allocation of funds (over €50 billion during the 2007-13 period) through the EU’s main policy instruments: the European Development Fund, the European Neighbourhood and Partnership Instrument, and the Development Cooperation Instrument. The paper attempts to establish whether any dominant explanation, or combination of explanations, given in the literature on development assistance, is able to account for the allocation of those parts of the funds that are meant to be spent on governance reform. Three explanatory models of development assistance are tested, revolving around notions of normative power Europe, donor interest and recipient need. The findings of

'Confidence in our own Abilities': Suriname’s State Oil Company as a Pocket of Effectiveness

__Abstract__ This chapter analyses the conditions under which the Surinamese State Oil Company (Staatsolie) has been consolidated, not only as a firm oriented at the production of oil, but also as a development agent. Staatsolie’s chances to success seemed rather slim at its creation in the beginning of the 1980s, mainly because of the non-developmental, patrimonial character of Surinamese politics and the nature of Suriname’s state, which has traditionally been oriented toward patronage and clientelism. The chapter documents the origins of Staatsolie and focuses on its commitment to the acquisition and further development of technological and managerial expertise. It is argued that Staatsolie has become a true pocket of effectiveness: it ranks among the most successful companies in Suriname and its contributions to the economy of this small middle-income country are considerable. The success of Staatsolie’s attempt to become a development agent is attributed, in particular, to the company’s double strategy. The internal part of this strategy, deri

'Building on our own abilities'

This paper analyses the conditions under which the Surinamese State Oil Company (Staatsolie) has been consolidated, not only as a firm oriented at the production of oil, but also as a development agent. Staatsolis chances to success seemed rather slim at its creation in the beginning of the 1980s, mainly because of the non-developmental, patrimonial character of Surinamese politics and the nature of Surinames state, which has traditionally been oriented toward patronage and clientelism. The analysis documents the origins of Staatsolie and focuses on its commitment to the acquisition and further development of technological and managerial expertise. At present, Staatsolie ranks among the most successful companies in Suriname and its contributions to the economy of this small middle-income country are considerable. The success of Staatsolies attempt to become a development agent is attributed, in particular, to the companys double strategy. The internal part of this strategy, derived from the management vision and ideological commitment of the companys leadership, was aimed at developing technological and management skills. The external part of the strategy was aimed at steering away from political influences on the company and playing out politically the formal-legal position of the firm in the petroleum sector. After 25 years of Staatsolie, it is argued that the factors that were responsible for the companys success may turn out to be the main challenges for the years ahead

Ontwikkelingslanden in internationaal politiek-economisch perspectief

In deze bijdrage ga ik in op aspecten van transformatie en internationalisering die gerelateerd zijn aan Van Paridons interesses, zij het niet met betrekking tot zijn belangrijkste object van studie, de open, geïndustrialiseerde economie, maar de economie van ontwikkelingslanden. Na een decennium waarin de economische prestaties van vele ontwikkelingslanden zijn geprezen, is er enige scepsis merkbaar bij wetenschappers over de houdbaarheid van het model van economische ontwikkeling dat vooral gebaseerd was op het gebruik van inkomsten uit de winning van grondstoffen

Governance and Development: Changing EU Policies

Abstract This introductory article to the special issue on European Union, development policies and governance discusses how notions of ('good') governance have come to dominate development discourses and policies since the mid-1990s. The article argues that governance was part of the so-called Post-Washington Consensus, which understands governance reform as part of the creation of market societies. Although academics have commonly emphasised the fact that governance concerns the rules that regulate the public sphere, the dominant understanding of (good) governance in policy circles revolves around technical and managerial connotations. The second part of the article introduces some important features of EU development policy, and argues that this is esse

Aid, Political Economy and Governance Reform

Intro: The Rise of Political-Economy Analysis for Development Assistance Political-economy analysis has been a favourite instrument among donors of development aid since roughly the turn of the century. The usefulness of such forms of analysis has been emphasised because donors realised that their focus on formal aspects of the social and political organisation of countries caused them to overlook important elements of the ‘political economy’ of these countries. As a result of this, political and governance reform programmes, which had become part and parcel of the agenda of development under the Post-Washington Consensus, turned out to be much less effective than anticipated.The call for donor agencies to ‘look behind the façade’ of formal institutions in developing countries has thus come as part of the aid effectiveness agenda. It was argued that the effectiveness of development assistance policies would be enhanced if the realities of social and political power structures indeveloping countries were mapped and fed into the design of governance reforms targeting those countries. A more or less tacit assumption in this approach was that political-economy analysis would enable donors to identify potential pockets of resistance against the reforms that donors were advocating –hence improving the chances of getting reforms accepted

Between Development and Security: The European Union, Governance and Fragile States

This article focuses on the recent attention in the European Union for fragile states, as expressed, among others, in the European Security Strategy of 2003 and the European Consensus on Development of 2006. It is demonstrated that most understandings of the notion of state fragility concern limited state capacity, the inability of institutions to deal with social and political tensions or problems of state legitimacy. The European Union is no exception to this general trend of seeing state fragility in terms of governance defici

Governance beyond the European Consensus on Development: What Drives EU Aid Selectivity?

This paper focuses on the ‘governance turn’ in the development policies of the European Union, represented in particular by the adoption of the ‘European Consensus on Development’ in 2005. The main assumption inherent in the EU approach to development is that the quality of governance in developing countries is a crucial (co-) determinant of development outcomes. The paper sets up an analysis of the allocation of funds (over €50 billion during the 2007-13 period) through the EU’s main policy instruments: the European Development Fund, the European Neighbourhood and Partnership Instrument, and the Development Cooperation Instrument. The paper attempts to establish whether any dominant explanation, or combination of explanations, given in the literature on development assistance, is able to account for the allocation of those parts of the funds that are meant to be spent on governance reform. Three sets of hypotheses are tested, each derived from one of the dominant explanatory models of development assistance: donor interest, recipient need and constructivist models. The findings of the empirical analyses emphasise the role of donor-interest variables, but show that recipient needs play a (seemingly subordinate) role in decisions on EU aid allocation