How politics and economics intersect: A simple guide to conducting political economy and context analysis

The intention of this guide is to provide practical guidance on how Oxfam undertakes political economy analysis (PEA) in order to inform operations and programming. It is based on the experience of working with Oxfam Myanmar (and heavily features this experience), initially looking at how PEA could be used to address two areas: 1) ‘How can citizens/civil society get engaged with local planning and budgeting processes?’ and 2) ‘How will the economic opening up of Myanmar affect small-scale farmers?’

As defined by the Organisation for Economic Co-operation and Development (OECD), political economy analysis (PEA) is ‘concerned with the interaction of political and economic processes in a society: the distribution of power and wealth between different groups and individuals, and the processes that create, sustain and transform these relationships over time’.

PEA is increasingly viewed as an essential tool for understanding the complex human and institutional relationships that can spell the difference between success and failure in international development programmes. Various donors are using their own frameworks, which – while labelled differently – mostly focus around commonalities of analysis of stakeholder interests, formal and informal institutions (the ‘rules of the game’), and development processes.