Strategic Response to Strategic Response to Political EconomyPolitical Economy

Addis, June 6, 2007Addis, June 6, 2007

Politics MattersPolitics Matters

Politics is a complex game of strategic calculations.

Politicians often face the so-called “politicians’ dilemma” in deciding among a set of policy

preferences

Politician’s DilemmaPolitician’s Dilemma

Conflicting Objectives:

• To survive in office; to build a loyal political organization—no suicide

• To govern effectively & efficiently

Harmonisation Harmonisation FrameworkFramework

Mkukuta

Growth SocialGovernance(GWG)

Core Reforms Accountability

PSRP

PFMRP

LSRP

Anti-Corruption

LGRP

ChallengesChallenges

• Reforms are not only technical = embedded in larger political, cultural, social and economic context

• How to put in place strategies that take into account how power is exercise

• Mkukuta cluster 3 = governance recognizing that it is the bedrock to the other two pillars on growth and social services

Reform agenda (National Framework for Reform agenda (National Framework for Good Governance)Good Governance)

o PFMRPo PSRPo LGRPo LSRPo NACSAP

Together constitute very ambitiousambitious and comprehensivecomprehensive restructuring of the state.

  

GWG Research AgendaGWG Research Agenda

► WB -- Political Economy, Anti-Corruption, Political Finance, Pay Reform studies

► DFID – Drivers of Change/Patterns of AccountabilityState Weakness – Operational Policy for Anti-

Corruption► Norway – Governance and Corruption in Tanzania;

sector-specific (natural resources)► SIDA – A Power Analysis of Tanzania (2005)

Monitoring Power in Tanzania (Update) (2007)► USAID – Assessment of Democracy and Governance

Use – Synthesis paper of above has been prepared– Workshops have been conducted for donors, public

servants and civil society

How to use the How to use the findingsfindings

o For policy dialogueo For programme choice

and designo For risk management

►General budget support

►Sector support

World Bank’s ResponseWorld Bank’s Response• Design ATIP

• Understand decisions on to pay

• Advent of new government – understand challenges and opportunities and prepare a CAS that would build on the knowledge

• Assessment of political context of reforms + stakeholders consultation

• Tanzania included in a broader study

• Political economy of Tanzania

Lessons LearntLessons Learnt

o Realisation of importance of PE context

o Need to take into consideration in design of programs (sectoral too)

o Technical expertise to do PEo Standard part of training programo Easy to do PE in a country where

governance is relatively positiveo Issue: what to do when the

environment is less conducive?