Good Governance and European Aid

Abstract

This research analyses whether Official Development Assistance (ODA) of Germany, France, the United Kingdom and the European Community/European Union (EC/EU) between 1980 and 1995 rewarded good governance in developing countries, using OLS regressions for three cross-sections over that time period. The results show that good governance, in the form of respect for basic human rights, democratic structures and low military spending, did not play a consistent or prominent role in European aid. The coordination between the European donors however seems to have increased during the first half of the 1990s. France and the UK give more aid to their former colonies, the EC/EU favours ACP countries. The results also indicate that both strategic and economic factors influence ODA distribution, whereas recipient needs receive only limited attention.