can allow for effective prioritization and targeted reform programs – often focused on the “basics” of improved performance – that reduce the scope and technical complexity of reform efforts, while increasing their political feasibility.

A particularly compelling illustration of the value of this kind of analysis comes from examining challenges in reforming IT systems. Donor programs have often identified major limitations of existing IT systems, and significant potential to achieve large improvements in outcomes, and have correspondingly made the introduction of sophisticated IT systems a central part of reform strategies. Yet these reform programs have frequently had significant delays, and upgraded IT systems have continued to be underutilized even after implementation. The most persuasive explanation for this underperformance is that while IT systems offered significant potential to improve outcomes, weak IT systems _per se_ have often not been the binding constraint on reform. Instead, poor performance has been rooted more deeply in failures of process or politics that have prevented even relatively basic data sharing and audit measures that are, in principle, possible even without broader IT reform. Here again, knowing that existing IT systems are underperforming is not on its own an adequate guide to targeting reforms –a binding constraints analysis is likely to point toward the need to first, or in parallel, address other challenges essential to maximizing the impact of IT reform.

_Political Feasibility: What are the key political barriers to reform?_ What kinds of technical reform are consistent with existing political constraints, and how can political barriers to action be overcome, and/or how can support for reform be constructed and sustained? There is now near-universal agreement that political hurdles are frequently the most important barriers to reform – and thus agreement about the importance of problem-focused political economy analysis to inform reform efforts. A problem-focused political economy analysis aims to provide a sophisticated assessment of the politics of reform that anticipates likely challenges – both inside and outside of tax agencies – and potential strategies for confronting them. The starting point is an assessment of the extent of political support for reform and the configuration of political interests. The core concern is not with an exhaustive mapping of possible interests, but a focused interrogation of the interests that are likely to shape the prospects for the success of reform, with a view to (a) informing the design of reform that is most likely to succeed amid existing political constraints (“incentive compatible reform”); and (b) supporting the design of strategies to minimize resistance and build support for reform.<sup>158</sup> The initial goal of political economy analysis is to assess the extent of political support, and the consequent feasibility of different reform options – but doing so can be complex. Government actors have strong incentives to express confidence in reform in order to access external support but may in practice lack sufficient political will to overcome entrenched resistance. However, tax reform provides unique opportunities for overcoming this challenge: it is often characterized by reform options that are low cost and technically simple, but politically costly – for example, expanding basic data sharing about high-income taxpayers. Jibao and Prichard have argued that government may “reveal” its underlying commitment to reform through its willingness to take

> 158 Prichard, W. (2019). Tax, politics, and the social contract in Africa. _Oxford Research Encyclopedia of Politics_ . Oxford: Oxford University Press.

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