Getting Serious about Stakeholder Analysis
Piloting Political Science Methods in World Bank Operational Work
Why Do We Need Stakeholder Analysis?
Experience suggests many Bank-supported reforms fail because of low client commitment
Understanding the dynamics of potential support and opposition for different policy measures can help reformers design programs that will work politically
What If?
Gorbachev had developed a strategy to defuse opposition to his program to transform political and economic structures in the USSR? Hillary Clinton had been able to manage friends and foes in her efforts to push radical reform on health care in the U.S.?

George Bush had analyzed stakeholder positions before going to a vote in the UN Security Council on the war in Iraq?

Could Stakeholder Analysis have changed history ..???
Stakeholder Analysis Background
Potential winners and losers of policy reforms can actively influence reform outcomes
To account for role of politics, Bank has performed intuitive analyses of stakeholder preferences
Need for more systematic political stakeholder analysis
Pilot studies conducted by EASPR using the Expected Utility Stakeholder Model
Stakeholder Analysis Objectives of Pilot Study
Operationally useful analytic tool that factors politics into Bank’ s understanding and design of interventions
Insights to help Bank staff make informed decisions about operational priorities
Share modeling findings with country clients (subject to comfort level of country and regional management)
Stakeholder Analysis East Asian Pilot Program
Pilot Program Analyzed Politics of High Profile Governance Issues in 2 East Asian Client (Low and Middle-Income) Countries
Country A (Low-income):
Anti-corruption (Broad reform initiative plus customs and procurement reform)
Civil Service Pay and Employment Reform
Country B (middle-income):
Anti-corruption (Broad reform initiative plus customs, procurement, and revenue reforms)
Stakeholder Analysis Operational Questions for the Bank
What was the likelihood of movement on desired governance reforms?
Which reform areas should Bank emphasize or de-emphasize in its programs?
Which actors were pivotal in reform process?
How should the Bank position itself in the reform process and debate?

Stakeholder Analysis What the Model Can Do
Identify stakeholder positions on policy reform, weigh their potential influence and assess the strength of their commitment
Simulate round-by-round negotiations to gauge whether proposed reforms are feasible as designed
Determine possible strategic options for optimizing reform levels using knowledge about political dynamics
How the Model Works Data Collection Process
Interviews with country experts
Explain context and relationships related to reform issues
Define reform steps in order of difficulty
Describe stakeholders and place them along this continuum according to their preferences
Not opinions or predictions
Cross-checked for internal consistency and comparability
How the Model Works Data Components
Defined policy issue
Steps in the reform process
List of stakeholders with an interest in the policy outcome and those with a veto
Each stakeholder’ s initial bargaining position
Relative power of each stakeholder on this issue
Salience of issue to each stakeholder
How the Model Works Simulation Bargaining Process
Stakeholders try to influence each other to secure an outcome they see as favorable
Model provides a round-by-round simulation of prospective political bargaining
Predicts how key stakeholders will shift their positions
Assesses the level of consensus in support of a particular outcome
How the Model Works Determination of Expected Outcome
Objective assessment of likely outcome for a reform issue
Extent of reform to be attained
Level of support for this outcome
Model can estimate effect of different initial stakeholder positions on likelihood of reform success and level of policy consensus

Case Study -Country A Macro Anti-corruption Agenda
Corruption a high profile issue
Prime Minister
Veto player
No reforms without PM approval
Adopting a cautious approach to reform
Government has outlined a broad anti-corruption strategy α Basis for issue definition
Country A -Anti-Corruption Step One: Defining the Issue
Country A -Anti-Corruption Step Two: Positions and Influence
Country A -Anti-Corruption Step Three: Bargaining Dynamics
Country A -Anti-Corruption Step Four: Anticipated Outcome
Country A -Anti-Corruption Step Five: Potential for Further Reform
Re-analyzed using various donor starting positions above and below current positions
Results suggest that changes to current Bank policy would be unproductive
Can get PM to agree to higher reform, but not without lowering domestic reform consensus
Case Study -Country A Customs Reform
High priority for reform
Pervasive corruption
Low capacity
Government has initiated customs reform, including draft customs code
Prime Minister desires a slow and steady approach -favors quiet consultations with key stakeholders
Country A -Customs Step One: Defining the Issue
Country A -Customs Step Two: Positions and Influence
Country A -Customs Step Three: Bargaining Dynamics
Country A -Customs Step Four: Anticipated Outcome
Country A -Customs Step Five: Potential for Further Reform
Re-analyzed using various donor starting positions above and below current positions
Results suggest that changes to current Bank policy would be unproductive
Can make small gains in policy outcome by pushing for most comprehensive reform target (modern customs authority)
But only at the cost of societal consensus
Case Study -Country A Summary
Despite comprehensive anti-corruption agenda, little domestic support for more than cosmetic reform
More potential for progress in specific, targeted interventions (i.e. customs reform)
Resources not best spent on general anti-corruption initiatives
Benefits of the Model (1) Why We Liked It
Wide applicability
Has been used to analyze a diverse set of negotiated issues from business to economics to politics
Can be applied to broad range of Bank issues -not just governance
Track Record of Accuracy
More accurate than traditional methods using expert opinion (approximately 90% in real-time prediction of thousands of cases since 1981)
Benefits of the Model (2) Tighter Approach than Existing Methods
Structured format for data collection
Offers more systematic results than expert opinions or predictions
Facilitates clear definition of the issues and the scale of potential outcomes
Provides consistent format to summarize experts’ views of current power structure
Allows quantification of estimates, enabling scientific analysis and comparison across experts
Benefits of the Model (3) Analysis is Nuanced -Permits Small Calibrations in Bank Policy
Dynamic analysis -Can estimate how bargaining behavior will play out over time
Predicts the types of coalitions that may form in support of different levels of policy reform (e.g. not just thumbs-up or down on first-best solutions; can help steer support to small but significant steps along the way)
Allows dual analysis of a macro issue along with its component policy parts for better reform targeting (e.g. broad anti-corruption or specific procurement measures)
Limitations of the Model (1) What We Didn’ t Like
Garbage in, garbage out α Quality of data collection is critical
Shortage of qualified experts on some issues
Need for in-depth country knowledge greater than expected
Access to country-based informants awkward; extensive interviews required with busy people
Limitations of the Model What We Didn’ t Like
Ability to forecast has not yet been tested for Bank-related policy issues
Operational utility depends on close alignment with country program tasks
No in-house capacity to run the model
Works best on narrowly focused issue; commonly confronted Bank problems often multivariate, complex

Internal Challenges to Mainstreaming this Approach
Fear of leaks -Worry that explicit material will get out in country or international press
Questions of access within the Bank: How closely held should results be and at what hierarchical level?
Lack of comfort, familiarity with methods, jargon from political science
Uncertainty about what to do with findings
Funding political stakeholder analysis is low priority when competing with traditional Bank tasks
Questions about how to fit stakeholder analysis into Bank knowledge and operational cycle (CAS, projects, AAA, one-off initiative)
Seriously Getting Serious Next Steps
Establish framework within country and regional operations for ongoing application of these techniques)
Embed this tool in broader field-based, political analysis approaches
Pilot studies on additional countries/issues
Develop in-house modeling capacity
Assess further experience, including accuracy of forecasts and recommendations

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