paid to GPE factors, operational performance tends to be better.<sup>45</sup> Furthermore, the break-down into DPLs and ILs indicates that the potential downside of neglecting political economy drivers has been higher for investment operations than for development policy operations. This is consistent with expectations, given the typically longer implementation periods, and the greater challenge in achieving the expected outcomes defined ex ante that are inherent in investment operations.

Considering specific cases within the sample suggests that attention to GPE factors helped to support better results in several less propitious environments such as a country in West Africa or a South East Asian country, but not in all – e.g. not in another West African country. In a more propitious environment such as a Latin American MIC, in turn, an operation was able to achieve good results despite paying little attention to GPE dynamics. A continuation of the QAG GAC assessment and further monitoring of results would be highly desirable with a view to following over time and for a growing number of operations whether attention to GPE and other governance dimensions ̳pays off‘.

Overall, the evidence from reviewing project documents and ex-post assessments, interviews with task teams and revisiting the QAG sample of public sector operations suggests that investing in more explicit attention to political economy and developing more political economy responsive approaches to public sector reform support can pay off, especially in environments where reform commitment is uncertain. Importantly, the interviews indicate that a better understanding of political economy factors does not automatically translate into a more ̳political economy savvy‘ approach. Task teams can face incentives that make them reluctant to limit the scope or hold back on an operation, while some task teams are pushed to develop overly ambitious designs. Thus, looking forward, it would be helpful for the public sector practice to track not only whether more explicit analytic work as such is undertaken and pays off, but also whether resulting insights are in fact translated into operational design (and possible obstacles for doing so).

# **IV. Making Public Sector Reforms Work: Preliminary Conclusions**

This paper has investigated the importance of political economy challenges and dynamics in an effort to understand why progress on public sector reforms has been difficult in many countries, and also why in some cases public sector reforms progress despite typical obstacles. It analyzed how political economy factors affect public sector reforms by looking at the literature and evidence from a decade of World Bank projects supporting public sector reforms.

Importantly, while the focus of this paper is primarily on the political economy dynamics surrounding public sector reforms and less on issues with the content of these reforms that are discussed elsewhere (World Bank 2012, Andrews 2009 among others), the paper and its findings are fully aligned with the view that flexibility and innovation in the content is essential to enable

> 45 No indication was found that responsiveness to GPE is targeted at countries where successful reforms are less likely.

37