1. Strategic Response to Political Economy Addis, June 6, 2007

2. Politics 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

3. Politician ’ s Dilemma Conflicting Objectives: To survive in office; to build a loyal political organization—no suicide To govern effectively & efficiently

4. Harmonisation Framework Mkukuta GrowthSocial Governance (GWG) Core Reforms PSRP PFMRP LSRP LGRP Accountability Anti- Corruption

5. Challenges 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

7. Reform agenda (National Framework for Good Governance) oPFMRP oPSRP oLGRP oLSRP oNACSAP ambitious comprehensive Together constitute very ambitious and comprehensive restructuring of the state.

8. GWG Research Agenda ► WB -- Political Economy, Anti-Corruption, Political Finance, Pay Reform studies ► DFID – Drivers of Change/Patterns of Accountability State 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

9. How to use the findings oFoFor policy dialogue oFoFor programme choice and design oFoFor risk management ►G►General budget support ►S►Sector support

10. World 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

11. Lessons Learnt oRealisation of importance of PE context oNeed to take into consideration in design of programs (sectoral too) oTechnical expertise to do PE oStandard part of training program oEasy to do PE in a country where governance is relatively positive oIssue: what to do when the environment is less conducive?