StakeHolder Analysis in Policy Making

1 Introduction: What, Why, When, Who and How Much?
1.1 This guidance supplements the Technical Note on Enhancing Stakeholder Participation, and provides practical hints on how to do stakeholder analysis, and how such analysis can be used.1

1.2 The Technical Note on Participation explains why participatory approaches are important for a sustainable and effective aid programme. It describes how to identify key stakeholders through stakeholder analysis and lists key issues for partnership with these other stakeholders. A series of steps are provided for negotiating participation of other stakeholders in ODA-funded activities and the extent to which participation is feasible, sensible and cost effective is explored in relation to the type of aid and sector. The TN recommends an initial stakeholder analysis at an early stage to be incorporated in the Project Concept Note, and then further refined for the Project Submission, with revisions during annual reviews.


What is stakeholder analysis?


1.3 Stakeholder analysis is the identification of a project's key stakeholders, an assessment of their interests, and the ways in which these interests affect project riskiness and viability. It is linked to both institutional appraisal and social analysis: drawing on the information deriving from these approaches, but also contributing to the combining of such data in a single framework. Stakeholder analysis contributes to project design through the logical framework, and by helping to identify appropriate forms of stakeholder participation.


Definitions


1.4 Stakeholders are persons, groups or institutions with interests in a project or programme. Primary stakeholders are those ultimately affected, either positively (beneficiaries) or negatively (for example, those involuntarily resettled). Secondary stakeholders are the intermediaries in the aid delivery process. This definition of stakeholders includes both winners and losers, and those involved or excluded from decision-making processes.


1.5 Key stakeholders are those who can significantly influence, or are important to the success of the project (according to ODA's priority policy objectives and project purpose).


Why do a stakeholder analysis?


1.6 Stakeholder analysis helps administrators and advisors to assess a project environment, and to inform ODA's negotiating position in project talks. More specifically, doing a stakeholder analysis can:



draw out the interests of stakeholders in relation to the problems which the project is seeking to address (at the identification stage) or the purpose of the project (once it has started).


identify conflicts of interests between stakeholders, which will influence ODA's assessment of a project's riskiness before funds are committed (which is particularly important for proposed process projects).


help to identify relations between stakeholders which can be built upon, and may enable "coalitions" of project sponsorship, ownership and cooperation.


help to assess the appropriate type of participation by different stakeholders, at successive stages of the project cycle.


When should it be done?

1.7 Stakeholder analysis should always be done at the beginning of a project, even if it is a quick list of stakeholders and their interests. (Most people do this already, if only informally). Such a list can be used to draw out the main assumptions which are needed if a project is going to be viable, and some of the key risks. Thus, stakeholder analysis will contribute to the drafting of a log frame.


1.8 Whenever log frames are re-considered during the life of a project, a stakeholder analysis will be useful. This means that annual monitoring missions and mid-term reviews should include stakeholder analysis as part of their tool-kit.


Who should do the analysis?


1.9 The tools and exercises outlined below can be used in a participatory fashion, similar to the Project Cycle Management (PCM) approach to log frames. Drawing up lists and diagrams in such a manner can share and clarify information quickly. Certainly, a team approach is likely to be more effective than an individual doing the analysis alone.


1.10 However, stakeholder analysis often involves sensitive and undiplomatic information. Many interests are covert, and agendas are partially hidden. In many situations there will be few benefits in trying to uncover such agendas in public.


How much time should be spent?


1.11 The following section describes a basic methodology. The type and scale of the project, and the complexity of the issues, should dictate how much time at any stage of the project cycle should be devoted to the task.



2 How to do a Stakeholder Analysis
2.1 There are several steps to doing a stakeholder analysis:



draw up a "stakeholder table";
do an assessment of each stakeholder's importance to project success and their relative power/influence;
identify risks and assumptions which will affect project design and success.


2.2 This section outlines the above steps in a little more detail, providing some rules of thumb and checklists.



Stakeholder Tables
2.3 To draw up a stakeholder table:


identify and list all potential stakeholders.

identify their interests (overt and hidden) in relation to the problems being addressed by a project and its objectives. Note that each stakeholder may have several interests.

briefly assess the likely impact of the project on each of these interests (positive, negative, or unknown).

indicate the relative priority which the project should give to each stakeholder in meeting their interests (this refers to priorities derived from ODA's policy and project objectives).

2.4 Stakeholders can be listed and categorised in various ways. One starting point is to divide a list into primary and secondary stakeholders. Box 1 provides a quick checklist to help draw up a list.


2.5 Primary stakeholders are those people and groups ultimately affected by the project. This includes intended beneficiaries or those negatively affected (for example, those involuntarily resettled). In most projects primary stakeholders will be categorised according to social analysis. Thus, primary stakeholders should often be divided by gender, social or income classes, occupational or service user groups. In many projects, categories of primary stakeholders may overlap (eg. women and low-income groups; or minor forest users and ethnic minorities).


2.6 Secondary stakeholders, including ODA, are intermediaries in the process of delivering aid to primary stakeholders. They can be divided into funding, implementing, monitoring and advocacy organisations, or simply governmental, NGO and private sector organisations. In many projects it will also be necessary to consider key individuals as specific stakeholders (eg. heads of departments or other agencies, who have personal interests at stake as well as formal institutional objectives). Also note that there may be some informal groups of people who will act as intermediaries. For example, politicians, local leaders, respected persons with social or religious influence.


2.7 Within some organisations there may be sub-groups which should be considered as stakeholders. For example, public service unions, women employees, specific categories of staff.

Continued......

Checklist for identifying stakeholders

have all primary and secondary stakeholders been listed?

have all potential supporters and opponents of the project been identified?

has gender analysis been used to identify different types of female stakeholders (at both primary and secondary levels)?

have primary stakeholders been divided into user/occupational groups, or income groups?

have the interests of vulnerable groups (especially the poor) been identified?

are there any new primary or secondary stakeholders that are likely to emerge as a result of the project?

Checklist for drawing out interests

Interests of all types of stakeholders may be difficult to define, especially if they are "hidden", or in contradiction with the openly stated aims of the organisations or groups involved. A rule of thumb is to relate each stakeholder to either the problems which the project is seeking to address (if at an early stage of the project), or the established objectives of the project (if the project is already under way). Interests may be drawn out by asking:

what are the stakeholder's expectations of the project?

what benefits are there likely to be for the stakeholders?

what resources will the stakeholder wish to commit (or avoid committing) to the project?

what other interests does the stakeholder have which may conflict with the project?

how does the stakeholder regard others in the list?

Information on secondary stakeholders should be available from institutional appraisals; information on primary stakeholders should be available from social analyses. Especially in the case of primary stakeholders, many of the interests will have to be defined by the persons with the best "on-the-ground" experience. Double check the interests being ascribed to primary groups, to confirm that they are plausible

Assessing the Influence and "Importance" of Stakeholders

2.12 Key stakeholders are those which can significantly influence, or are important to the success of the project. Influence refers to how powerful a stakeholder is; "importance" refers to those stakeholders whose problems, needs and interests are the priority of ODA's aid - if these "important" stakeholders are not assisted effectively then the project cannot be deemed a "success".

2.13 By combining influence and importance using a matrix diagram (see example 2), stakeholders can be classified into different groups, which will help identify assumptions and the risks which need to be managed through project design. Before outlining this matrix, ways of assessing influence and importance are suggested.

Assessing influence

2.14 Influence is the power which stakeholders have over a project - to control what decisions are made, facilitate its implementation, or exert influence which affects the project negatively. Influence is perhaps best understood as the extent to which people, groups or organisations (ie. stakeholders) are able to persuade or coerce others into making decisions, and following certain courses of action.


2.15 Power may derive from the nature of a stakeholder's organisation, or their position in relation to other stakeholders (for example, line ministries which control budgets and other departments). Other forms of influence may be more informal (for example, personal connections to ruling politicians). It may also be necessary to consider stakeholders whose power, and therefore influence, will increase because of resources introduced by the project.


2.16 Assessing influence is often difficult and involves interpretation of a range of factors

Checklist for assessing which stakeholders are important for project success

When assessing importance to project success, use these "checklist" questions, the answers to which may already be suggested by the information existing in stakeholder tables:

which problems, affecting which stakeholders, does the project seek to address or alleviate?

for which stakeholders does the project place a priority on meeting their needs, interests and expectations?

which stakeholder interests converge most closely with policy and project objectives?

Using the Findings of a Stakeholder Analysis
3.1 Findings from a stakeholder analysis are already recorded in the tables and matrix diagrams, and the risks and assumptions arising from the analysis should be included in the log frame. In addition, the analysis should have contributed to a participation matrix that is used to explain project design. These records of the analysis are the basis for revision later on in the life of the project.

3.2 In more concrete terms, the findings of a stakeholder analysis need to be included (with different amounts of detail) into (a) the project concept note and (b) the project document. It will also be appropriate to include analysis in annual monitoring reports and reviews.

The project concept note

3.3 The main findings of a stakeholder analysis should be included in the project concept note. Such a summary needs to be brief, because (a) of the nature of concept notes, and (b) the analysis will probably be revised as the project design develops, interests change, and more information becomes available.

3.4 The main findings of a stakeholder analysis can be presented in a table adapted from the original listing - showing only the key stakeholders and their interests. Assumptions being made about stakeholders (and any associated risks) will appear in the fourth column of the log frame. An extended narrative is not necessary.

The project document

3.5 All project documents will need more detail than the concept note, drawing on both the stakeholder analysis and any revisions arising out of appraisal.

3.6 PEC submissions are likely to require more detail of key secondary and primary stakeholders - their various interests, and their relative influence and importance. This information should appear in summary form in the Social and Institutional Section of the project document.

3.7 The main text should cross-reference with:

a specific annex, in which the findings of the analysis should be clearly presented in a stakeholder table, matrix diagram, and a narrative outlining each key stakeholder's influence and importance;

the logical framework;

the participation matrix, if appropriate.

Further details about Stake Holder Analysis can be found out at the following link

http://www.euforic.org/gb/stake1.htm

Download an excellent document on How to Analyse Health Policy

http://mihd.net/li3x58