Business Briefs

EU Development Policy

In times of austerity, development assistance is often the first victim. In the context of overall spending cuts, "aid abroad" becomes subject to more popular skepticism and increased scrutiny. This tends to result not only in a reduction of aid, but also in its further politicization, making for closer alignments between aid distribution, conditionality and strategic objectives of national foreign affairs agendas. From 2010 to 2011, official development assistance (ODA) by donors from the Organization for Economic Cooperation and Development (OECD) dropped by around €1 billion - to a total of €96 billion. In the European Union (EU), the collective share of aid as a percentage of gross national income (GNI) fell from 0.44 percent in 2010 to 0.42 percent in 2011. Despite this decrease, the EU can still pride itself as the biggest global donor. Nevertheless, the EU performs poorly against the background of a much-advertized promise to spend 0.7 percent of GNI on development aid by 2015. Sensing an erosion of EU credibility, the European Commission has launched an offensive to increase aid effectiveness and to streamline communal and member states' development policies.

This brief explores the history and background of EU development policies in order to place current trends in context. Along the way, the brief identifies the main hurdles to having the EU live up to its potential. These include the differences in member states’ strategic interests in providing development aid as well as the emergence of other state and non-state actors in the development aid market– for example China, the Gulf Countries or global charity foundations. Less bureaucracy, less conditionality and a less tainted colonial past seem to give these actors a comparative advantage over the EU.

  • EU development aid: the historical background
  • Policy Coherence for Development (PCD) and the EU Agenda for Change
  • EU aid: internal and external competitors
  • Conclusion


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