Institutional Analysis to

government

INSTITUTIONAL POLICY
Institutional Analysis and Policy

ANALYSIS
Master of Business Administration
Institute of Management Studies,
University of Peshawar, Pakistan
MAJOR TYPES OF INSTITUTIONS

 Economic institutions
 Deal with property and economic well being of society, economic solidarity of state

 Political institutions
 Deal with governing laws, courts, social control

 Family
 Based on principle of kinship, social norms, social relations created by customs and marriage – Nuclear and Joint family
system
 Education
 Deal with training people in various rules, values, knowledge building human being’s characters, which varies from place to
place but process remains the same
 Religion
 Build the religions beliefs and values in process plays major role in social control
WHY GOVERNMENT INTERVENE IN PUBLIC MATTER?

 # When society desires health care and a clean environment for everyone, why does the free market not provide
it ?
 # Do you believe that the free market has proven a superb device for efficiently producing goods and services ?
 # What do you say when efforts to relieve market imperfections by public policy will also be flawed ?
 # Do you agree when others argue that government may be the only actor that can improve market efficiency or
alter economic and social costs, risks, and income distribution in a positive way ?

 D.L.Weimer & A.R.Vining , 1999 : “ .... Greater equity in the distributions of economic and political resources,
should be viewed as only necessary conditions for appropriate government intervention “ 
THE DIFFERENCE BETWEEN INSTITUTIONAL POLICY ANALYSIS
AND OTHERS

 It is important to distinguish between institutional policy analysis and other policy studies approaches

 Substantive policy analysis focuses on programmatic choices, the authoritative allocation of resources
by government. contain well calculated policy actions that will affect the political system in a major way. 

 Descriptive policy studies examine manipulable and nonmanipulable aspects of the political process in
an effort to improve our understanding of politics.

 The explicit or implicit aim is to improve government. In this respect, institutional policy analysis is
directly relevant to what Charles Anderson calls "political architecture”
Level of Policy reforms
THREE LEVELS OF POLICY REFORMS

 The significance of institutional, political, and social analysis at three levels of policy reform: macro-level analysis
of the country and reform context, meso-level processes of policy implementation, and micro-level impact of
policy reform.
 Each level of analysis is applied with its own set of practical tools:
 Macro-level tools help us to understand the significance of the historical context, political-ideological climate,
political-institutional culture, and economic and social makeup of countries engaging in policy reform.
 Meso-level tools aid our understanding of the rules and incentives that govern the implementation of policy
reform, transmitted through price-based incentives and through less predictable organizational cultures and
social norms.
 Meso- and micro-level tools help with analysis of the distributional impacts of policy reform, identifying winners
and losers, and explaining the dynamics of poverty in local settings.

Source: Jeremy Holland - Tools for Institutional, Political, and Social Analysis of Policy Reform_ A Sourcebook for
Development Practitioners (2007)
TOOLS FOR
INSTITUTIONAL,
POLITICAL, AND
SOCIAL
ANALYSIS
Macro-Level Analysis
MACRO-LEVEL ANALYSIS: UNDERSTANDING THE COUNTRY
AND REFORM CONTEXT

 There is a growing awareness among international donor agencies and partners in government and civil society
that policy reform should be based on a better understanding of country and reform contexts.
 At the macro-level of country and reform context, broad, upstream country analysis that examines the political
landscape can be complemented by more specific analysis of the context for a particular type of reform.
ANALYSIS OF COUNTRY CONTEXT

 Country context analysis is important because policy reform does not take place in an historical
vacuum but takes place in a particular context.
 Donors in particular now recognize that
 • The experiences and “lessons of history” of other countries regarding development and poverty reduction
can provide insights and learning for current international development.
 • Governments of many countries remain unresponsive to the needs of the poor and uninterested in
achieving development targets such as the MDGs. Concepts such as “lack of political will” that are often used
to describe these situations are inadequate because although they identify a problem, they fail to explain the
reason for these failures or to identify viable solutions.
 • Aid effectiveness increases when aid supports national efforts, making the local situation the point of
departure rather than preconceived policies.
Tool Objective

Country social analysis It integrates social, economic, political, and institutional analysis to understand the influence
of country context on policy reform and development outcomes. CSA is primarily based on
existing qualitative and quantitative data, supplemented with collection of new primary data
on issues of particular concern in the specific case.
CSA gives particular attention to
• the distribution of assets, economic activity, and access to markets across different social
groups
• how local institutions and political systems affect policy making and implementation, and
how they include or exclude the poor
• the opportunities and constraints to the country’s development that emerge from the current
country social context.

Power analysis It analyzes actors, interest groups, and structures to uncover where the real power in a
society lies and how power is distributed geographically, institutionally and socially.

It might also point to the kind of power being exercised, and how this power is perceived.

Issues that should be covered could be summarized as actors, structures,

processes, relations, and hierarchies. This analysis is based on an understanding that
sustained poverty reduction requires poor people to have access to political power and
resources
Tool Objective

Drivers of change It aims to improve the understanding of political, economic, social and cultural forces that
inform change in a regional and country context and to link this understanding with an
identification of the key policy and institutional “drivers” of change that provide the
context for poverty reduction.

Six elements form part of a drivers of change analysis:

• basic country analysis
• medium-term dynamics
• role of external forces
• impacts on poverty
• operational implications
• incentives.
ANALYSIS OF REFORM CONTEXT
Tool Objective
Stakeholder analysis At the macro-level, stakeholder analysis is usually a combination of a review of
Matrix secondary literature and additional brainstorming sessions or workshops with a small
number of knowledgeable key informants. Analysts use stakeholder analysis matrices
to list and plot the stakeholders and their relationship to the policy process.

These matrices can be used to plot two or more of the following variables:
• the degree to which the policy reform will impact stakeholders
• the level of interest in a specific policy reform
• the level of importance attached to satisfying the needs and interests of each
stakeholder
• the level of influence that the stakeholder has to facilitate or impede policy design
and implementation
• the level of resources that stakeholders possess and are able to bring to bear in the
policy process
STAKEHOLDER ANALYSIS MATRIX
Tool Objective
Political mapping While stakeholder analysis matrices focus on the power, influence, and proximity of
individuals and interest groups to a particular policy reform, political mapping focuses
more directly on the political landscape of policy reform by identifying the strength and
nature of political-ideological opinion on a reform issue.

Political mapping identifies the most important political actors and spatially illustrates their
relationships to one another with respect to policy design and delivery.

By so doing, political mapping can

• provide a graphic representation of the political viability of a regime
• offer clues about the vulnerabilities of the regime
• detect the existence of opposing alliances and potential support coalitions
• indicate the level of authority possessed by the regime
• help indicate implementation capacity of various actors
• detect new directions in policy.
POLITICAL
MAPPING OF
PAKISTAN
Tool Objective
Network analysis It helps analysts to think strategically about the strength and nature of institutional connections in
the political landscape. It is a visual method of mapping that “measures” the relationships and
interaction between a set of actors/entities (people, groups, organizations) in a community sector,
industry and so on. It focuses on the structure of relationships rather than on their attributes.

Network analysis can be used for

• understanding organizational structure and functioning of systems
• understanding organizational behavior, inter-organizational relations, social
support, and the flow of information/knowledge/resources
• understanding potential impacts of policy changes or implementation on
relationships between a set of actors

Transaction cost It is a tool for political economy analysis that focuses on the uneven distribution of
analysis information. This tool is most relevant in public sector or privatization reforms where it
identifies potential constraints in the design and implementation phase of the reforms based
on transaction costs.
Transaction cost analysis starts from the premise that uncertainty and information are
unevenly distributed among agents and actors. The incentive-structure underlying all
decision-making processes (in private firms, governments, NGOs, and so on) is determined
by this distribution of uncertainty and information.
CONTACT INFORMATION

 Salman Khan
 salmankhanims@gmail.com

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