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Project Identification: Stakeholder Analysis

Introduction

Project ideas can come from numerous sources: the recipient government, civil society, donors, communities or FAO. For FAO, the primary beneficiaries may be resource-poor farmers, fishers and foresters, small-scale agro-processors, rural communities, or, in some cases, the institutions that receive direct technical support. The motivation to formulate a project is, most typically, to address a specific problem or to take advantage of a new opportunity. As discussed earlier, FAO projects are expected to be government priorities, supported by a priority-setting process of country programming. They may be primarily identified through UN agency planning processes, such as UNDAF, or result from a national planning process.

To make the most of the resources available to FAO, field programming staff must be aware of the development priorities defined by policymakers and national leaders, the agricultural constraints and technical opportunities for research and development, the capabilities of the institutions with which FAO works, and FAO's own comparative advantage. FAO, in concert with stakeholders, is tasked with formulating projects that have the best likelihood of contributing to development objectives, while being realistic about what is possible in a given amount of time with the resources available.

This is a complex task that requires the consideration of many things including the following:

  • Relationship of the project to national development objectives
  • Relationship of the project to a larger programme: national, UN or FAO
  • Understanding of donor policies and priorities for resource mobilization and partnerships
  • Understanding of direct and indirect beneficiaries/stakeholders
  • Determination of institutional capacity to plan and implement the project: national agencies, FAO, other stakeholders
  • Determination of how project outcomes can be sustained: social-economic, institutional, environmental

In any event, deciding what to do is the most important step in the project cycle, and requires an analysis of stakeholders, problems, objectives and strategies to clearly identify the project. A properly planned project addresses the real needs of beneficiaries, whose views may diverge and need to be brought into the discussion. A key question for those trying to identify projects is how can a project be identified in a participatory manner?

Stakeholder Analysis

After a project idea has been raised, an early step in project development is stakeholder analysis. Stakeholders are individuals, groups or organizations who, directly or indirectly, stand to gain or lose from a given development activity or policy. Distinction is drawn between:

  • Primary stakeholders who are directly affected and would include the principal project beneficiaries;
  • Secondary stakeholders who are indirectly affected;
  • Key stakeholders who are the agents of change. These are often also "primary" stakeholders.

We undertake stakeholder analysis to:

  • identify stakeholders' interests in, importance to, and influence over the intervention,
  • identify local institutions and processes upon which to build, and
  • provide a foundation and strategy for participation.

Methods of stakeholder analysis:

  • best done in collaboration with key stakeholder groups,
  • not a desk study - use participatory methods such as stakeholder workshops and local consultations,
  • use secondary data where available and reliable to reduce costs.


Stakeholder analysis is a 4-step process

Step 1: Identify Stakeholders

Compile a list and assess:

  • Who are potential beneficiaries?
  • Who might be adversely affected?
  • Have vulnerable groups been identified?
  • Are there gender-linked differences within and among groups?
  • Have supporters and opponents been identified?
  • What are the relationships among the stakeholders?

Draw up a list identifying all stakeholders. Organise as primary, secondary, and key stakeholders:

  • Primary = directly affected, including principal beneficiaries,
  • Secondary = indirectly affected,
  • Key = activity involved in project decisions, management, etc.

Step 2: Assess Stakeholder Interests and Potential Project Impact on Interests



  • What are the stakeholders' expectations of the project?
  • What benefits are there likely to be for the stakeholders?
  • What resources might the stakeholders be able and willing to mobilize?
  • What stakeholder interests conflict with project goals?

Some stakeholder interests are less obvious than others and may be difficult to define, especially if they are "hidden," multiple or in contradiction with the stated aims or objectives of the organization or individual.

For some institutions, these questions can be answered through a review of secondary information. For more informal groups and local people, assessment of their interests will probably require some form of consultation, either directly with these stakeholders or with people "on-the-ground" who are familiar with these groups.

With this background, consideration can be given to how the project might affect these interests - positively or negatively.

Step 3: Assess Stakeholder Influence and Importance

For each stakeholder group, assess its:

  • " power and status (political, social and economic)
  • " degree of organization
  • " control of strategic resources
  • " decision-making processes, both formal and informal (for example, government and traditional)
  • " power relations with other stakeholders
  • " importance to the success of the project

Influence refers to the power that stakeholders have over a project. It can be exercised by controlling the decision making process directly and by facilitating or hindering the project's implementation. This control may come from a stakeholder's status or power, or from informal connections with leaders.

Another variable, that of importance, relates to the degree to which achievement of project objectives depends on the active involvement of a given stakeholder group. Stakeholders who are important to the project are generally those whose needs the project seeks to meet as well as those whose interests converge with the objectives of the project. Some stakeholders may be very important to a project (for instance, rural women in a reproductive health project) but may have very limited influence over the project. These stakeholders may require special efforts to enable them to become active participants to ensure that their needs will indeed be met.

Step 4: Outline a Stakeholder Participation Strategy

Plan stakeholder involvement according to:

  • " interests, importance and influence of each stakeholder group,
  • " particular efforts needed to involve important stakeholders who lack influence,
  • " appropriate forms of participation throughout the project cycle.

On the basis of the previous three steps in the stakeholder analysis process, some preliminary planning can be done on how the different stakeholder groups can best be involved in subsequent stages of the project. As a rule of thumb, the appropriate approaches for involving stakeholders of differing levels of influence and importance can be as follows:

  • stakeholders of high influence and high importance should be closely involved throughout to ensure their support for the project;
  • stakeholders of high influence and low importance are not the target of the project but may oppose the intervention; therefore, they will need, as appropriate, to be kept informed and their views acknowledged to avoid disruption or conflict;
  • stakeholders of low influence and high performance require special efforts to ensure that their needs are met and their participation is meaningful; and
  • stakeholder of low influence and low importance are unlikely to be closely involved in the project and require no special participation strategies (beyond any information-sharing strategies aimed at the "general public").

Refer to Table 1 for a graphic depiction of these issues. It is extremely important to identify strategies for including important stakeholders who lack influence, those who for cultural or resources reasons may not easily "find a seat at the table".

Table 1. Types of Participation According to Influence and Importance

Influence
Low High
Importance High Closely involved throughout procect Special effort to meet needs and ensure participation
Low Not target of the project but may hinder it; kept informed and views acknowledged Not closely involved; information sharing strategies aimed at "general puclic"

Types of Communication with Stakeholders in the Project Cycle

From an early assessment of the importance and influence of stakeholders, those involved in project design need to consider the roles of each at different steps in the project cycle.

  • Who should be involved in project identification?
  • Who should be involved in detailed project planning?
  • Who should be involved in project implementation and monitoring?
  • Who should be involved in project evaluation?

We can think of varying levels of participation, since all stakeholders cannot and should not be deeply involved all of the time (refer to Table 1). We can think of four general types of communication in our relationships with stakeholders. These are:

  • Providing Information - a one-way flow of general information to keep people informed about developments
  • Consultation - a two-way flow of more specific information, where views are taken into account in decision-making
  • Collaboration - two-way communication where stakeholders assume greater control over decision-making in a partnership with the donor/lead agency
  • Empowerment - two-way communication where primary control of decisions is entrusted to the stakeholders, often after capacity-building efforts have taken place to make this possible and in accordance with donor financial and reporting requirements.

In addition stakeholders vary according to the nature of the problem addressed (Table 2). You determine your "universe" of stakeholders also by considering the type of problem you are trying to solve and the level of intervention you envisage. For example, if you are concentrating on a policy issue, for instance, building the capacity of WTO negotiators to participate more meaningfully in global trade agreements, you would likely find most of your stakeholders in central government, universities, etc. The extent to which you build in consultative relationships with others will be highly influenced by your objectives, resources and time.

Table 2: Relationship between Nature of Problem and Stakeholders

Level Nature of Problem Stakeholders
Macro
  • policy environment
  • legal provisions
  • state of national economy
  • international relations
  • trade
  • central government
  • national research organizations
  • international NGOs
  • national NGOs
Intermediate
  • institutions
  • infrastructure (transport, communications, markets)
  • services (credit, extension, training, education, health)
  • regional government
  • service providers
  • private sector (manufacturers, wholesalers, distributors, retailers
  • NGOs
Micro
  • productive, household and community work
  • livelihood assets, livelihood strategies and livelihood outcomes
  • livelihood vulnerability context (shocks, trends, seasonability)
  • livelihood systems and their interaction with policies and institutions
  • access and control over resources and benefits
  • decision making
  • individuals (women, men, children)
  • households
  • interest groups (e.g. similar livelihood and farming systems, socio-cultural and socio-economic groups, vulnerable groups like HIV/AIDS infected, food insecure and/or nutritionally vulnerable)
  • informal and formal institutions
  • communities
  • community-based organizations
  • NGO's

The manner in which the project identification process goes forward will depend on the findings of the preliminary review of the situation and the identification of relevant stakeholders. For example, if the constraints exist principally at the macro level, the problem may best be tackled through stakeholders operating at the national level.

Stakeholders also work vertically as well as horizontally. Thus intermediate level stakeholders can assist in addressing constraints at the community level as well as provide linkages from the field to the policy environment.

Proceeding to analyse problems and potentials at the macro and intermediate level is often done in a workshop environment where key stakeholders analyse problems, set objectives and determining the right strategy to tackle the problems. Information may come from primary or secondary analysis of infrastructure, services and institutional capacity.

Problems involving micro- and intermediate-level constraints, where households and communities are at the centre of the analysis, require different assessments and means for involving stakeholders, such as situational analysis, livelihoods analysis, socio-economic and gender analysis, institutional capacity analysis and participatory rural appraisal. More information on these approaches and tools are available from the FAO Socio-economic and Gender Analysis (SEAGA) Programme, the Technical Cooperation Department's Formulation Toolkit and the FAO Participation Website.

Checklist for Project Identification

  • Have all stakeholders been involved in the process of identifying project options?
  • Will any stakeholders be disadvantaged by the proposed project? How may this be minimized?
  • Have any potential conflicts between stakeholders been identified? How may these be resolved?
  • Have situational reviews or socioeconomic, gender and livelihoods analysis captured any differences that exist between members of the community?
  • Have opportunities for addressing strategic gender needs been identified?
  • Have stakeholders identified ways in which they can contribute to the project?



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