Lesson Learned

A political economy analysis (PEA) conducted in compact development may have helped MCC to understand the incentive structure of the utility and the government.  After the Government of Liberia refused to extend the utility operations component of the management services contract with Manitoba Hydro International beyond December 2016, the Liberian government installed individuals in LEC’s management whose actions did not serve the best interests of the utility.  Then, not respecting the operational independence of ESB International, the operator of a new management services contract in 2018, the government appointed (and refused to remove after numerous requests) another individual who interfered with loss reduction efforts and complicated the utility’s operations.  These sorts of dynamics were something that MCC needed to better understand during compact development, however, measures to address them would reduce the country’s ownership for program success.

• Liberia Compact
• Mt. Coffee and Capacity Building and Sector Reform
• Energy

A political economy analysis (PEA) conducted in compact development may have helped MCC to understand the incentive structure of the utility and the government.  After the Government of Liberia refused to extend the utility operations component of the management services contract with Manitoba Hydro International beyond December 2016, the Liberian government installed individuals in LEC’s management whose actions did not serve the best interests of the utility.  Then, not respecting the operational independence of ESB International, the operator of a new management services contract in 2018, the government appointed (and refused to remove after numerous requests) another individual who interfered with loss reduction efforts and complicated the utility’s operations.  These sorts of dynamics were something that MCC needed to better understand during compact development, however, measures to address them would reduce the country’s ownership for program success. Entrenched political interests resisted reform in the sector. The evaluation indicated that the management services contract would have benefitted from a utility-level and country-level PEA to help increase the likelihood of success.  MCC is now conducting more political economy analyses as part of compact development.