The Political Economy of Economic Empowerment: Bringing Politics and Society Back In

Economic empowerment programmes designed to mitigate inequalities are increasingly becoming an important part of the portfolio for governments in low-income countries (LICs). These programmes give primacy to interventions in the ‘economic sphere’. Their underlying theory of change not only expects a positive impact on economic empowerment, it also expects positive ‘spillovers’ that will change the norms, behaviours, roles and bargaining power that underpin social and political empowerment. This paper reviews the empirical evidence and finds that more often than not these interventions do not strengthen economic empowerment. It also finds that very few programmes create the hypothesised ‘spillovers’ in the social and political spheres. The paper shows that programme outcomes and scale-up are sensitive to the social and political context, in particular the distribution of power and resources among gainers and losers. An important message from this paper is that a robust theory of change must be informed by empirical research that enables us to see how the context, in particular the distribution of power, is shaped. It also reviews the literature on political collective action and institutions to identify political economy mechanisms that are argued either to catalyse or to inhibit the creation, sustainability and survival of effective economic empowerment programmes in LICs and fragile and conflict-affected settings.