Political Economy Analysis - Structuring Monitoring in Complex Environments

Published on: Fri Jun 27 2025 by Ivar Strand

In the previous article in this series, we established that the common term “Third-Party Monitoring” is a misnomer. A more accurate analytical framework is to understand the monitor as a “second-party agent” acting on behalf of a principal—typically a donor or a government ministry.

This clarity is the necessary starting point, but it is not sufficient for success. The practical reality of the principal-agent relationship is that it can introduce significant friction with the implementing partner being monitored. If not managed with professional discipline, the engagement can quickly become adversarial, undermining the very trust it is meant to build. A successful outcome, therefore, depends less on the title we use and more on the deliberate structure of the engagement itself.

The Goal: A Professional, Non-Adversarial Framework

The primary objective when designing a monitoring engagement is to establish a clear and mutually understood set of “rules of the road.” This framework must allow the monitoring agent to execute its verification mandate with uncompromising rigor, while simultaneously maintaining a professional and productive working relationship with the implementing partner.

This is not a matter of being “soft” on difficult findings. It is about ensuring that the process for gathering data, arriving at findings, and communicating them is transparent, predictable, and fair to all parties. This process, when well-designed, is the foundation of a constructive, rather than a defensive, dynamic.

Core Components of a Well-Structured Engagement

Based on our experience in politically and operationally complex environments, we have found that a well-structured engagement is built on three essential, pre-agreed pillars. These must be established at the outset of any monitoring assignment.

1. A Precise and Shared Terms of Reference (ToR). The ToR is the foundational document for the engagement, and its clarity is paramount. While formally commissioned by the principal, it must be shared with and discussed with the implementing partner before work commences. An effective ToR moves beyond legal boilerplate to serve as a shared operational plan. It must unambiguously define:

   • The exact scope of the verification.
   • The specific analytical questions the monitor is tasked to answer.
   • The precise format and frequency of all deliverables. Ambiguity in the ToR is a primary source of future conflict and must be eliminated.

2. A Formal Data and Access Protocol. The engagement must be predicated on a formal protocol that specifies exactly what data and systems the monitor requires access to. This may include, for example, direct, read-only access to the financial system’s database, or the scheduled provision of specific raw data exports. Agreeing to these technical requirements upfront prevents later disputes or delays related to access to information.

3. A “No Surprises” Communication Protocol. This is the most critical element for managing the relationship. The protocol must govern, in detail, how findings are vetted and communicated. Our standard approach is a multi-stage process:

   • Factual Validation: All draft findings and the underlying data they are based on are first shared with the implementing partner’s technical counterparts. The sole purpose of this step is to validate the factual accuracy of the evidence.
   • Formal Management Response: Once the facts are agreed upon, the draft report is shared with the partner’s senior management, who are given a formal period to provide a written response. This response must be included, verbatim, in the final report that is delivered to the principal.
   • A Clear Escalation Path: The protocol should define a clear, pre-agreed process for resolving any substantive disagreements over the interpretation of findings, specifying who is involved at each stage of the discussion.

Conclusion: From Verification to Joint Problem-Solving

This structured and transparent process does not compromise the integrity of the verification. It strengthens it. When an implementing partner understands that the rules of engagement are clear, that they will have the opportunity to check the facts, and that their perspective will be formally included in the final report, the dynamic is far less likely to become defensive.

This framework creates the necessary conditions for a more productive relationship, where the focus can shift from debating the validity of a finding to collaboratively addressing the underlying systemic weakness that the finding has revealed. It is how we manage the “realpolitik” of monitoring to ensure our work is not just technically rigorous, but also practically effective.