Much ado about nothing? The European Union and the global politics of untying aid

Abstract

This article has two main purposes. The first is that of providing a longitudinal analysis of the global politics of untying aid, by looking at a number of debates that have occurred within the Development Assistance Committee and in the context of a number of high-level forums on aid effectiveness. The second is that of proposing some explanations for the lack of significant progress in these contexts. The focus is on the European Union (EU), which has been widely perceived as one of the most fervent supporters of promoting the aid untying agenda. In all these debates, the EU's leadership aspirations have remained largely unfulfilled. Thus, the EU has failed to adopt a EU-wide vision on aid untying; persuade non-EU donors to untie their aid, even when it has played the reciprocity card; and promote a pro-poor use of foreign aid, by supporting local ownership and facilitating greater access of developing country firms to aid contracts.

Keywords:

• tied aid
• informal tying
• public procurements
• aid effectiveness
• European Union
• Development Assistance Committee (DAC)

Acknowledgements

This study was completed during a period of research spent at the German Development Institute, for which I want to thank Mark Furness, Christine Hackenesch, Stefan Klingebiel, and Svea Koch. I am also grateful to Chris Stevens, Niels Keijzer, Annamaria La Chimia, and Jan Orbie for helpful comments on earlier drafts of this paper.

Notes

1. These interviews were conducted in several rounds: a first round in January–February 2004 in Brussels, a second round in May–June 2009 (in Senegal and Gambia) and May–June 2010 (in Ethiopia and Djibouti), and a third round in July–September 2013. They include policy-makers directly involved with the issue of the untying of aid within the DAC Secretariat, the European Commission (including its delegation at the DAC), some EU Member States (specifically those officials representing their countries at the EU and the DAC), the four countries in sub-Saharan Africa mentioned above, and some NGO representatives.

2. Most donors do not disclose in advance offers for untied aid for specific projects, nor do they report systematically or comprehensively on contract awards, claiming that they do not maintain central records of the value or the origin of contracts awarded, or that information lies with aid recipients (DAC 2013).

3. For a review of the Helsinki Arrangement, see Moravcsik (1989), Owen and Lammersen (2001), and Hall (2011).

4. The European Commission – except for a brief period of uncertainty in 1999–2001 caused by bureaucratic clashes – has consistently attempted to promote an EU-wide approach on aid untying since the early 1970s. In line with the positions of their native countries, Chris Patten, the British Commissioner for External Relations, supported full aid untying, whereas Poul Nielson, the Danish Commissioner for Development, was against it (European Voice, 11 January 2001; 25 January 2001).

5. For a thorough analysis of these regulations, see La Chimia (2013).

6. This was partially modified in 2010, when it was decided to align the EDF to EU-budget aid rules.