Understanding Policy Change How to Apply

How does the social and political context in which decision-makers find themselves in affect their ability to realize their reform goals? How does this context facilitate or inhibit specific reform agendas and projects? How can we operationalize and evaluate these risks and opportunities in order to decide what reforms and projects are feasible given the circumstances? This book provides the reader with the full panoply of political economy tools and concepts necessary to understand, analyze, and integrate how political and social factors may influence the success or failure of their policy goals. Starting with the empirical puzzle of why corruption, rent seeking, and a lack of good governance emerge and persist in a host of countries and sectors the book reviews how collective action problems and the role of institutions, as well as a host of ancillary political economy concepts can affect the feasibility of different projects. However, the book is not just a one stop shop of political economy concepts, but also provides practical advice on how to organize and use this information via the introduction of stakeholder mapping tools and the development of an actionable political economy toolkit.In other words researchers, graduate students, and policy practitioners interested in understanding, the what, the why and the how of policy reform will find this book an essential tool.

Foreword	p. xi
Acknowledgments	p. xiii
Abbreviations	p. xv
Introduction	p. 1
What Is This Handbook About?	p. 2
A Guide for Reformers, Journalists, and Civil Society Activists	p. 3
The Main Theoretical Narrative and the Guiding Principle of the Handbook	p. 5
Collective Action: The How To Change Solution	p. 6
The Rest of This Book	p. 14
Summary	p. 15
Political Economy: What It Is and What It Is Not	p. 17
Objectives of Chapter 1	p. 17
Political Economy Analysis, Diagnostics, and Tools	p. 18
Reform Stories: Seeing the World through the Lens of Political Economy	p. 22
Deconstructing and Understanding Poverty Reduction Reform: An Empirical Puzzle	p. 28
The Limits, Perils, and Promises of Political-Economy Analysis	p. 40
Summary	p. 44
	p. 49
Accountability and Corruption: The What Question	p. 51
Objectives of Chapter 2	p. 52
What Is Accountability?	p. 52
Common Symptoms of Malfunctioning Institutions: Corruption and Its Relatives	p. 62
Summary	p. 73
The Collective Action Problem in Development: The Why Question	p. 79
Objectives of Chapter 3	p. 81
Collective Action Problems: At the Heart of Development	p. 81
What Are Public Goods?	p. 82
What Factors Inhibit Collective Action?	p. 85
Social Dilemmas of Delivering Public Goods	p. 88
Identifying and Evaluating Collective Action Problems	p. 91
Game Theory and Collective Action: Modeling Social Dilemmas with Nash Equilibria	p. 95
Summary	p. 98
Exercise 3.1: The Unscrupulous Diner's Dilemma	p. 99
Theories and Mechanisms of Political Economy: Institutions and Equilibria	p. 111
Objectives of Chapter 4	p. 113
Institutions, Incentives, and Collective Action	p. 113
Institutional Origins, Stability, and Change	p. 131
Symptoms of Institutional Failure: Lack of Enforcement	p. 140
Modeling the Role of Institutions with Game Theory	p. 144
Summary	p. 146
Exercise 4.1: The Prisoner's Dilemma Game	p. 147
Collective Choice and Agenda Setting	p. 157
Objectives of Chapter 5	p. 159
What Is Agenda Setting?	p. 159
Types of Agenda Setting	p. 163
Agenda Setting as a Strategic Tool for Policy Making: A Note on Positivist and Normative Angles	p. 171
Summary	p. 173
Exercise 5.1: The Agenda-Setting Game	p. 174
Delegation Problems and the Principal-Agent Relationship	p. 181
Objectives of Chapter 6	p. 183
Delegation	p. 183
The Principal, the Agent, and Their Incentives	p. 186
What Are the Main Technical Features of a Principal-Agent Model?	p. 187
Who or What Will Make Sure That the Agent Complies with the Mandate? Solving Delegation Problems	p. 189
Analyzing Principal-Agent Dilemmas Using Game Theory	p. 193
Summary	p. 195
Exercise 6.1: The Principal-Agent Game	p. 196
Causes and Effects of Information Asymmetries in the Policy-Making Process	p. 207
Objectives of Chapter 7	p. 209
The Political Economy of Information	p. 210
Broader Implications of Information Asymmetries	p. 217
Understanding the Nonlinear Relationship between Information Asymmetries and Pro-Development Collective Action	p. 224
Summary	p. 229
Credible Commitment	p. 233
Objectives of Chapter 8	p. 234
The Problem: Time Inconsistency	p. 234
What Is "Credible Commitment"?	p. 235
Credible Commitment, Collective Action, and Development	p. 241
The Importance of Collective Action-Induced Credible Commitment to Development: What the Data Say	p. 242
Modeling Credible Commitment as a Challenger Game	p. 243
Summary	p. 244
Solutions to Collective Action Problems	p. 247
Objectives of Chapter 9	p. 248
When Do Mobilization and Production of Public Goods Occur?	p. 249
Tools for Solving Collective Action Problems	p. 254
Conceptualizing Leadership, Trust, and Repeated Interaction through Games	p. 264
Summary	p. 266
Exercise 9.1: The Prisoner's Dilemma with Different Time Horizons/Institutional Incentives Game	p. 267
	p. 279
How to Conduct Political-Economy Analyses: First Steps	p. 281
Objectives of Chapter 10	p. 282
Who Are the Stakeholders, and How Can Their Preferences Be Mapped?	p. 283
The Role of Institutions	p. 286
The Role of Constraints	p. 287
Methods and Instruments for Diagnostics and Analysis	p. 288
From Theory to Action	p. 291
Summary	p. 293
Exercise 10.1: The Leadership Game	p. 294
Recognizing Opportunity for Policy Change	p. 303
Objectives of Chapter 11	p. 304
Time Frames for Reform: Timing, Sequencing, Pacing, and Maintaining Momentum	p. 304
Complementary versus Trade-offs of Different Reform Areas	p. 310
Summary	p. 315
Fundamental Concepts in Game Theory	p. 317
Technical Appendix	p. 321
Political-Economy Concepts in Practice: Public Procurement Reform in the Philippines	p. 323
Political-Economy Homework Exercises	p. 333
Index	p. 345
Box
Political-Economy Analysis: A Practical Checklist	p. 311
Concepts in Practice
Democratic Institutions, Famines, and Food Shortages	p. 54
The Case of Budgetary Decisions in Iran	p. 62
Prebendalism and Artisanal Gold Mining in the Democratic Republic of Congo	p. 65
Clientelism, Ethnicity, and Gender in Benin	p. 67
The "New Public Management"-from New Zealand to the World	p. 73
Prices of Agricultural Products in Sub-Saharan Africa	p. 92
Political Parties as Collective Action Problem Solvers	p. 95
Constitutions and Individual Rights to Public Goods-Water Access and Health Care	p. 119
Water Resource Management Reforms in Zimbabwe	p. 120
Effects of Electoral Laws on Public Goods in Brazil and República Bolivariana de Venezuela	p. 127
Informal Institutions in China	p. 130
Labor Regulations in India	p. 133
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Understanding Policy Change How to Apply Political Economy Concepts in Practice

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