The power relations that underlie poverty and exclusion can make or break development programmes, if not understood and addressed at all stages of design and implementation. Political economy and power analysis represent distinct but complementary approaches to making sense of power in the context of development initiatives. Both approaches are used to provide organisations with a better understanding of key actors and their interests, and of the enabling and constraining structures, conditions and narratives in which their actions take place. These include both observable and less visible norms, institutions and discourses, and the formal and informal motivations shaping different actors’ behaviour in supporting or blocking change. This article seeks to clarify the similarities and differences between political economy and power analysis, what they each can offer, and how they may be used in complementary ways to make development cooperation more effective and transformative.