The European Union, Good Governance and Aid Co-ordination

Abstract

This article reviews the EU's distinctive approach to good governance, based on policy dialogue and incentives, in light of the significant transformations that have occurred in EU development policy since the early 2000s. The argument made here is that only when the EU decided to act as a single actor was it possible to agree on a harmonised approach to good governance. By doing so, the EU sought to promote aid effectiveness and at the same time raise its profile in international politics, thus challenging the leadership of the World Bank and of the USA. It is concluded that not only has the gap between the EU's lofty ambitions and the implementation record remained wide, but also that the search for better co-ordination between European donors has resulted in decreased policy space for developing countries.

Notes

1 Development Assistance Committee, Development Cooperation Report 2008, Paris: OECD, 2009.

2 This article, in addition to an analysis of primary sources, is based on a number of interviews with aid officials in the European Commission, some member states and some African countries, conducted by the author in May 2006 and in May–June 2009.

3 For a general introduction to the governance–development link, see B Smith, Good Governance and Development, Basingstoke: Palgrave Macmillan, 2007. See also G Hyden, J Court & K Mease, Making Sense of Governance: Empirical Evidence from Sixteen Developing Countries, Boulder, CO: Lynne Rienner, 2004; and M Kjaer, Governance, Cambridge: Polity Press, 2004.

4 For example, in the summer of 1998 the Dutch Minister of Development Co-operation announced a substantial reduction of countries receiving aid. Other European countries, by contrast, have resisted this trend. See W Hout, The Politics of Aid Selectivity: Good Governance Criteria in World Bank, US and Dutch Development Assistance, London: Routledge, 2007.

5 P Hoebink, ‘European donors and “good governance”: condition or goal’, European Journal of Development Research, 18(1), 2006, pp 131–161.

6 E Neumayer, The Pattern of Aid Giving: The Impact of Good Governance on Development Assistance, London: Routledge, 2003.

7 O Stokke (ed), Aid and Political Conditionality, London: Frank Cass, 1995; and M Doornbos, ‘“Good governance”: the rise and decline of a policy metaphor?’, Journal of Development Studies, 37(6), 2001, pp 93–108.

8 M Doornbos, ‘Good governance: the pliability of a policy concept’, Trames, 8(4), 2004, pp 372–387; and G Harrison, ‘The World Bank, governance and theories of political action’, British Journal of Politics and International Relations, 7(2), 2005, pp 240–260.

9 W Hout & R Robison (eds), Governance and the Depoliticisation of Development, London: Routledge, 2009.

10 These conclusions have been contested on a number of fronts, and the literature keeps increasing. For reviews, see H Hansen & F Tarp, ‘Aid and growth regressions’, Journal of Development Economics, 64, 2001, pp 547–560; and Tony Addison & George Mavrotas (eds), Development Finance in the Global Economy: The Road Ahead, Basingstoke: Palgrave Macmillan, 2008.

11 The IMF articulated its views on (good) governance only in 1997, when it published a document called Good Governance: The IMF's Role. The governance agenda in the IMF, according to Thirkell-White, has been driven by financial technocrats, who have narrowly focused on macroeconomic considerations in the formulation and implementation of the IMF's aid policy. Similarly, for Ian Taylor the concept of good governance has been used by the IMF as ‘an ultimate attempt to reconfigure territories in order to make them most attractive to international capital’. See B Thirkell-White, ‘The IMF, good governance and middle-income countries’, European Journal of Development Research, 15(1), 2003, pp 99–125; and I Taylor, ‘Hegemony, neoliberal “good governance” and the International Monetary Fund: a Gramscian perspective’, in M B⊘ås & D McNeill (eds), Global Institutions and Development: Framing the World?, London: Routledge, 2004, p 124.

12 Taylor, ‘Hegemony, neoliberal “good governance” and the International Monetary Fund’, p 124.

13 M Grindle, ‘Good enough governance: poverty reduction and reform in developing countries’, Governance, 17, 2004, p 526.

14 K Masujima. ‘Good governance and the Development Assistance Committee’, in B⊘ås & McNeill, Global Institutions and Development; and Hoebink, ‘European donors and “good governance”’.

15 DAC, Development Cooperation Report 2008.

16 Ibid, pp 29–30.

17 FRIDE, ‘From Paris to Accra: building the global governance of aid’, August 2008, at http://www.fride.org/download/DB_Paris_to_Accra_ENG_aug08.pdf, accessed 10 August 2009.

18 K Arts & AK Dickson (eds), EU Development Cooperation: From Model to Symbol, Manchester: Manchester University Press, 2004; and M Holland, The European Union and the Third World, New York: Palgrave, 2002. See also C Santiso, ‘Reforming European foreign aid: development cooperation as an element of foreign policy’, European Foreign Affairs Review, 8(1), 2003, pp 401–422.

19 For an analysis of the recent changes in EU development policy, see M Carbone (ed), Perspectives on European Politics and Society, 9(2), 2008, special issue. This issue includes articles by S Dearden on the reform process, J Mackie on the Cotonou Agreement, M Carbone on participation, and J Orbie and G Faber on trade and development.

20 M Carbone, The European Union and International Development: The Politics of Foreign Aid, London: Routledge, 2007.

21 Development Assistance Committee, Peer Review of the European Community, Paris: OECD, 2007.

22 European Commission, Financing for Development and Aid Effectiveness—The Challenges of Scaling EU Aid 2006–2010, COM(2006)85, 2 March 2006; European Commission, EU Aid: Delivering More, Better and Faster, COM(2006)87, 2 March 2006; and European Commission, Increasing the Impact of EU Aid: A Common Framework for Drafting Country Strategy Papers and Joint Multiannual Programming, COM(2006)88, 2 March 2006.

23 European Parliament, Council and Commission, ‘The European Consensus on Development’, Official Journal of the European Union, 24 February 2006, C 46, pp 1–19.

24 Ibid.

25 Another important commitment for member states (the EC had already implemented this) was to focus activities only on three sectors per developing country, particularly in those areas where they could add the most value, while taking into account what other donors were doing. See European Commission, EU Code of Conduct on Division of Labour in Development Policy, COM(2007)72, 28 February 2007; Council, 2800th Council Meeting, External Relations, 9471/1/07 REV 1 Press 103, Brussels, 14 May 2007.

26 Smith, Good Governance and Development, p 150; SC Carey, ‘European aid: human rights versus bureaucratic inertia’, Journal of Peace Research, 44(4), 2007, pp 447–464; KE Smith, European Union Foreign Policy in a Changing World, Cambridge: Polity, 2008; and SC Zanger, ‘Good governance and European aid: the impact of political conditionality’, European Union Politics, 1(3), 2000, pp 293–317.

27 K Arts, Integrating Human Rights into Development Cooperation: The Case of the Lomé Convention, The Hague: Kluwer Law International, 2000; P Hilpold, ‘EU development cooperation at a crossroads: The Cotonou Agreement of 23 June 2000 and the principle of good governance’, European Foreign Affairs Review, 7, 2002, pp 53–72; C Santiso, ‘Sisyphus in the castle: improving European Union strategies for democracy promotion and governance conditionality’, European Journal of Development Research, 15(1), 2003, pp 1–28; M Carbone, ‘Theory and practice of participation: civil society and EU development policy’, Perspectives on European Politics and Society, 9(2), 2008, pp 241–255; and O Babarinde & G Faber (eds), The European Union and Developing Countries: The Cotonou Agreement, Leiden: Brill, 2005.

28 European Commission, Governance and Development, COM(2003)615, 20 October 2003.

29 European Commission, Governance in the European Consensus on Development: Towards a Harmonized Approach within the European Union, COM(2006)421, 30 August 2006.

30 See also the introduction of this special issue on the details of the ECGIT methodology. A similar approach is used by the British Department for International Development (DFID). The central assumption of the Drivers of Change (DOC) approach is that reducing poverty is about ‘intervening in historical processes and not simply rational planning’. Going beyond the dominant good governance agenda, this approach reflects the wider recognition of ‘the inherently political nature of the implementation and efficacy of aid’. See V Chhotray & D Hulme, ‘Contrasting visions of aid and governance in the 21st century: the White House Millennium Challenge Account and the DFID's Drivers of Change’, World Development, 37(1), 2009, p 40.

31 ‘A new governance: the European Commission needs to go one notch further’, at http://challengeforeurope.blogactiv.eu, 11 June 2009, accessed 10 October 2009.

32 Interviews by the author, June 2009; and DAC, Peer Review of the European Community, p 64.

33 European Commission, Commission Staff Working Paper Accompanying the Communication ‘Governance in the European Consensus on Development: Towards a Harmonized Approach within the European Union’, SEC(2006)1020, 30 August 2006.

34 M Fouwels, ‘The European Union's Common Foreign and Security Policy and human rights’, Netherlands Quarterly of Human Rights, 3, 1997, pp 291–324; and Hilpold, ‘EU development cooperation at a crossroads’.

35 Council of the European Union, 2756th Council meeting, General Affairs and External Relations, Luxembourg, 16–17 October 2006, 13340/07 (Presse 265); and interviews by the author, May 2006.

36 Concord Cotonou Working Group, Whose Governance?, Brussels: Concord, June 2006; CIDSE, Governance and Development Cooperation: Civil Society Perspectives on the European Union Approaches, Brussels: CIDSE, nd.

37 Interviews by the author, May–June 2009.

38 European Commission, An EU Aid Effectiveness Roadmap to Accra AND Beyond: From Rhetoric to Action, Hastening the Pace of Reforms, SEC(2008)435; and European Commission, Aid Effectiveness after Accra: Where Does the EU Stand and What More Do We Need to Do?, SEC(2009)443, 8 April 2009.

39 Y Tandon, ‘Southern discomfort’, Development + Cooperation, 7–8, 2008, at http://www.inwent.org, accessed 10 October 2009; and R Bissio, Paris Declaration on Aid Effectiveness, Human Rights Council, Geneva, 7–15 January 2008. See also G Hyden, ‘After the Paris Declaration: taking on the issue of power’, Development Policy Review, 26(3), 2008, pp 259–274.

40 European Commission, Supporting Democratic Governance through the Governance Initiative: A Review and the Way Forward, Commission Staff Working Paper, SEC(2009)58, 19 January 2009; N Molenaers & L Nijs, The Bumpy Road from Paris to Brussels: The European Commission Governance Initiative Tranche, Discussion Paper 8, Antwerp: Institute for Development Policy and Management, 2008; Molenaers & Nijs, ‘From the theory of aid effectiveness to the practice: the European Commission's Governance Incentive Tranche’, Development Policy Review, 27(5), 2009, pp 561–580; and F Ceuppens, EC Support to Governance is a ‘Moving Target’: Where do We Stand Regarding EU–Africa Relationships?, ECDPM, September 2006.

41 S Meyer, Governance Assessments and Domestic Accountability: Feeding Domestic Debate and Changing Aid Practices, FRIDE Working Paper 86, June 2009. An interesting debate also occurred on the basis of a Dutch proposal for a more extensive use of budget support in the relations between the EU and the developing world. This proposal proved highly controversial and discussions were postponed as some member state governments found it difficult to justify it to their parliaments. Interviews by the author, June 2009.

42 European Commission, Governance in the European Consensus, p 20.

43 Arts & Dickson, EU Development Cooperation.

44 M Farrell, ‘Internationalising EU development policy’, Perspectives on European Politics and Society, 9(2), 2008, pp 225–240.

45 M Holland, ‘The EU and the global development agenda’, Journal of European Integration, 30(3), pp 343–362.