Political Economy Analysis for Improved Water Management in Armenia

Project name: Political Economy Analysis for Improved Water Management in Armenia

Starting date: Jan 1, 2023

End date: April 30, 2023

Project Lead: USAID/Deloitte

Subcontractor: American University of Armenia (AUA) Acopian Center for the Environment

About the Project

Deloitte is leading a 5-year program funded by USAID on Improved Water Management (IWM). The Program aims to transform Armenia’s approach to water management to improve the equity of access to water while maintaining environmental flow and water quality for the protection of freshwater resources. The Program was launched in 2022 and will last through 2027. For more on the Program visit here.

The 5-year Program will achieve this through the development and dissemination of improved approaches and tools to support sustainable and secure water management; advancing improved water governance; and spreading best practices and innovative approaches in water conservation and use. The Program will also provide technical and advisory services (including training, applied research, and analysis) to the Government of Armenia, local communities, and the private sector, and support the implementation of small-scale pilot projects to improve water management and use. The Program’s activities will pursue the following objectives:

            Objective 1: Apply advanced technologies and tools to support sustainable and secure water management

           Objective 2: Improve water governance

           Objective 3: Promote and scale best practices and innovative approaches in water conservation and use to increase equitable access to

            water resources

           Objective 4: Prepare for regional cooperation with neighboring countries

           Objective 5: Improve access to water

Under Objective 2, the program is charged to support streamlining of legal, regulatory, and planning environments for sustainable, transparent governance of water resources, their efficient/effective use, and the use of innovative financing. To create a more streamlined regulatory and planning environment, the Program will support the GOAM in advancing major legislative and planning documents and identifying opportunities for innovative financing and cost-sharing arrangements to facilitate improved water management and delivery services.

The program also anticipates starting a policy dialogue with the water sector stakeholders in the improvement of the legal/regulatory framework, policies, and procedures to improve water resource management in the country by making it integrated, more transparent, accountable, and participatory. The policy dialogue is intended to be carried out both at the national and local levels with a wide involvement not only of the state institutions, but also academia, private and non-profit sectors, citizens and water users/consumers of drinking and irrigation water in the policy deliberation and formulation process in close coordination with the other projects funded by international donor community. All of these activities will be informed, firstly, by an initial sectoral Political Economy Analysis (PEA).

AUA Acopian Center’s Subcontract Scope

The Program will collaborate with the AUA Acopian Center for the Environment to conduct a Political Economy Analysis (PEA) of the water sector in Armenia, identifying foundational factors, rules of the game, the here and now, and dynamics among the three to synthesize implications for the Program. This is intended as a first step in thinking and working politically and as an iterative process to continue beyond the initial assessment.

Armenia’s water-sector PEA will help gain an understanding of the underlying reasons for why things work the way they do and identify the incentives and constraints impacting the behavior of actors in a relevant system. By helping identify these influences — political, economic, social and cultural —PEA supports a more politically informed approach to working. 

Through close and continuing collaboration with USAID, the team will develop a focused research question and employ USAID’s Applied Political Economy Assessment methodology. The resulting report will provide useful and actionable information for the IWM team, including implications for engagement and programming. 

For more information on USAID’s PEA methodology, visit here.

The Political Economy Analysis (PEA) is conducted by the AUA Acopian Center for the USAID/Armenia Improved Water Management Program implemented by Deloitte Consulting LLP .

Detailed PEA Methodology

This document should provide a high-level overview of findings from the literature review, as well as the methodology or plan that the team will follow to conduct the PEA. This should include the complete list of stakeholders and finalized research questions based on literature review. This document should include the inputs of program team members and USAID.

IWM Power Map

The report will describe the actors, institutions, and organizations involved with or potentially impacting IWM, describing their incentives, interests, relationships, and influence. The report will lay out potential barriers to development and reform, as well as opportunities for progress, identifying potential champions, alliances, spoilers, and kingmakers.

Political Economy Analysis Report

The baseline PEA will explore a political-economic problem within water management and governance and will seek to answer a focused research question to better understand foundational factors for the water management in Armenia, rules of the game, the here and now, and dynamics among the three. The PEA will be iterative in nature and will focus on understanding the implications of the target problem for IWM activities and engagements.

IWM Engagement Plan

The engagement plan will recommend an approach to engaging IWM stakeholders and other actors, identifying potential pitfalls and promising points of entry to build trust with relevant institutions and organizations and hopefully position IWM as an unbiased source of support to the Government of Armenia, civil society, and private sector actors.