The unique character of EU aid

UNU-WIDER / Jan 2013

EU aid is complicated both by its close relationship to the EU’s foreign policy in general, and by the question of what Europe should do as a community and what should be done by individual member states. In the WIDER Working Paper ‘EU Aid: What Works and Why?’ Poul Nielson aims to simplify the discussion of EU aid by simply asking what aspects of it work, and why they work. He outlines some of the distinct features of EU aid, and argues that as EU aid has become mainstream these distinctive features have become its biggest assets.

The EU as a mainstream development partner

The EU Commission is a unique construction. It is not a government, and it is not the secretariat of an international organization. It has the ability to act on its own but its every move is watched by member states as well as the European Parliament. This unique character has, Nielson suggests, meant that the commission is typically seen as being outside the debates on principles and practice that take place in the traditional donor community. This status is also reflected in the Commission’s own self-perception. For a long time the Commission did not see it as a problem that their definitions of various different aid activities were not compatible with those used by the Development Cooperation Directorate of the OECD (DAC). Similarly there was no uniform system for how aid activities were organized over the different regions in which the EU is involved. However the creation of EuropeAid as a single entity for management and implementation of the EU’s development aid has improved things in these respects and several DAC peer reviews verify that the Commission has become a respected actor in the donor community.

Nielson suggests that a key part of this shift towards the mainstream was the move to increasingly providing assistance in the form of budget support. Budget support became the aid modality preferred by the majority of DAC members due to both its efficiency and because it increases the control recipient countries have over the development process. The EU traditionally ran the majority of its own aid projects and as such the switch to budget support was a significant one which faced a lot of internal opposition. However the eventual shift led to the EU becoming increasingly involved in the mainstream development community, playing an active role in supporting and formulating the Paris and Accra declarations.

Nielson suggests that the EUs status a mainstream player in the development community has allowed the institution to put some of its unique qualities to good use. It is to these unique qualities Nielson turns.

© EUROPEAID/Dominiek Benoot

The unique qualities of EU aid

  1. Volume

Perhaps unsurprisingly one of the unique features of EU aid is its coverage and volume. Nielson points out that the EU is the only donor present in all developing countries and the EU and its member states’ share of global ODA is around 55 per cent. This global presence gives the EU legitimacy in any regional discussion, not only on development cooperation, but also on issues such as conflict management, regional cooperation, and environmental problems. Nielson also points out that the scope of EU aid provides the institution with the opportunity to accumulate knowledge about what works when it comes to aid, and to be a global leader in the discussion about development policy formulation.

  1. The Cotonou agreement

Another unique feature of EU aid that Nielson points out is that it is structured by a legally anchored agreement between North and South. This agreement, known as the Cotonou agreement, is negotiated and formally agreed to by the EU and the ACP group (African, Caribbean, and Pacific). The agreement sets out how aid will be distributed both across and within regions and provides structures for cooperation between donor and recipient. Nielson suggests that this formal agreement creates a more equal partnership between donor and recipient than is typical, and suggests that it allows the EU to distribute targeted aid in a way that does not undermine recipient country ownership. For Nielson the Cotonou agreement strengthens EU aid as it represents a commitment to long-term partnerships with developing countries and provides both sides with recourse if they feel that the relationship is deteriorating.

  1. © UN Photo/Albert Gonzalez Farran Aid for peacekeeping

Nielson suggests that the African Peace Facility (APF), an institution designed to pool funds for the purposes of peace keeping and conflict resolution in Africa, could not have been supported by any development partner other than the EU. The EU is the only donor with both the institutional capacity and political will to take on such a venture and the APF is based on the special relationship between the EU and African Union Commissions. The idea behind the APF is that conflicts destroy the possibility of delivering development aid, and that conflict resolution is therefore a key part of the development process. The APF also gives the African Union a real role in initiating proposal to release funds and represents a mechanism which enables an African lead effort to stabilize the security situation on the continent. Since its inception the APF has been allocated 740 million euros and carried out missions in Sudan, Central African Republic, Somalia, and Comoros. A peace keeping development programme is unique to the EU, and clearly plays a positive role in creating the conditions necessary for development to take place in Africa.

  1. Humanitarian aid

The EU is also a global leader when it comes to the provision of humanitarian aid. Since its inception the European Community Humanitarian Office (ECHO) has channelled 14 billion euros of humanitarian aid to victims of disasters and conflicts in 140 different countries, with the level of annual spending being around 1 billion euros. However Nielson suggests that it is not only the size of ECHOs disbursements that makes it unique, it also has greater capacity to independently assess disasters and conflicts and the effectiveness of the aid they give than any traditional bilateral donor. ECHO has 300 staff in Brussels, more than 400 in 38 countries across the world and has links with 200 implementing partners, 14 different UN organizations, 191 humanitarian NGOs and 3 international organizations. These links have allowed ECHO to take a lead in improving the coordination, efficiency, and quality of international humanitarian responses. In recent years there has been pressure to reduce the scope of the EU’s humanitarian aid projects, but ECHO and the responsible Commissioner ensured that the EU continued to provide its unique and important contribution.

Nielson concludes that as the EU has become a mainstream player in the development community its unique character has allowed it to provide aid in innovative and effective ways. The sheer scope and coverage of EU aid allows the institution to be at the forefront of understanding how and why aid works. The Cotonou agreement allows the Commission to create equal and long-term partnerships with recipients. The APF is an important institution based on the special relationship between the EU and AU Commissions. And the EU is a global leader when it comes to humanitarian aid. The EU is different from other donors, but it puts that difference to good use.

This report by James Stewart summarizes WIDER Working Paper no. 2012/76 'EU Aid: What Works and Why' by Poul Nielson.

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