The use of the phrase, ‘politicaleconomy’ originates in Adam Smith’s Wealth of Nations and isalso found in the writings of David Ricardo and Karl Marx.What is presently understood as ‘economics’ was, at thattime, termed ‘political economy’. This was understood tomean ‘conditions of production organization innation-states’ (Acemoglu and Robinson, 2012, Beuran,Raballand and Kapoor, 2011). Venerable scholars such asSmith, Ricardo, Mills, Rosseau, Ruskin and de Tocqueville,took a consistently holistic view of the interaction betweeneconomics (technical means of production) and politics(relationships of production) in their debates on wealth,prosperity, and international trade, and explanations ofdevelopment outcomes. However, subsequently, ‘economics’ and‘political science’ developed along parallel tracks,constraining us from fully exploring their interactions andjoint contribution to incomes, livelihoods and to economicdevelopment more generally. For the forestry sector too,when stakeholders’ power and influence is uneven, vestedinterests get to control the resource, and institutions areweak (or deliberately weakened by the same vested interests)the result is resource plunder, institutional erosion andbreakdown of the rule of law and concentration of wealth ina few hands. (In the next section of this chapter, specificexamples from forestry will illustrate these challengesclearly). If we are to come to grips with the fundamentalsdetermining sustainable forest management, there is a needto develop a good understanding of stakeholder interests andthe complex balance of power relationships, via politicaleconomy analysis. Thus, the major objective of this reportis to offer preliminary guidance to conduct a practicalpolitical economy analysis for the forest sector. The reportprovides this guidance by considering eight ‘front-runner’political economy analysis approaches that have emerged overthe last few years. In principle all are capable of beingapplied to address political economy challenges in forestryand the report develops a set of criteria, geared topolitical economy considerations for forestry, which wouldassist a practitioner in selecting among the available approaches.