EU's top-down approach may run against high-impact aid strategy

The 11th European Development Fund is the European Union’s main tool for providing development aid to African, Caribbean and Pacific countries. Its budget of 30.5 billion euros ($33.5 billion) for the period 2014-2020 represents about one-third of the total EU foreign and development aid. The programming of the 11th EDF is a critical test of the EU’s strategy to deliver high-impact aid, the Agenda for Change.

At the European Center for Development Policy Management — an independent think tank — we have looked at how the EU conducted its programming process. Here are some of the findings:

1. Around 15 billion euros is dedicated to funding development cooperation programs in 74 countries in Africa, the Caribbean and the Pacific. Over 80 percent of funds are directed to least developed countries and low-income countries where, in theory, the needs are greatest and aid has more added value.

2. We also see that EU aid concentrates on a limited number of sectors per country, with a strong focus on the EU’s two key priority areas defined by the Agenda for Change: inclusive and sustainable growth; and governance, human rights and democracy.

The most popular sectors are agriculture and energy, which together account for 40 percent of funds. Governance (including public financial management, rule of law and accountability, and public service delivery) attracts one third of funds.

In terms of cuts, the transport sector has suffered a drastic change compared to the previous EDF, falling from 25 percent to 10 percent of funds. The EDF also mainstreams climate change in all sectors, albeit not systematically.

The EU has done a remarkable job in translating its own development policy priorities into country programming. Yet, ECDPM has collected substantial evidence that the EU had the upper hand in deciding on sector choices and that a top-down approach to programming was followed. This has important implications for development effectiveness commitments.

3. A top-down approach to programming eroded the key commitment to country and democratic ownership. Several African government officials and EU officials interviewed in this study reported that EU policy priorities prevailed over country preferences. An African government official told us: “After long talks, the EU delegation and the government reached an agreement, but it was not an equitable agreement, because the EU pulled out of transport against our will.”

Although significant efforts were done at the country level to consult civil society organizations, the outcomes of these meetings did not particularly influence the choice of sectors that the EU put its aid into.

4. EU coordination efforts at the country level were also ignored. As a member state representative interviewed for this study said: “After a long process of talking about the division of labor, mapping EU interventions and recommendations to the delegation, the end result in terms of sector choices was completely: ‘No matter what you said, we’ll just do whatever we like’ … but we cannot blame the delegation, they were simply overruled [by headquarters].”

Lessons learned

Knowledge of what works and what doesn’t was not necessarily a key driver in the choice of sectors. We gathered little evidence that the programming was based on a solid assessment of the quality and credibility of country policies, or even a sector’s absorption capacity. This means that although the EU may be investing in sectors that address very important development needs in the countries concerned, these may not be the ones where better results can be delivered.  

The EU may not have the right expertise to support energy as a key focus of aid. There is also a question on whether the shift away from transport to energy is fully justified. Several donors worry that the energy sector is already overcrowded in many countries, and that the European Commission does not (yet) have the necessary expertise in the energy sector, compared to the transport sector where it was recognized as the lead donor and had a track record.

Management at the Commission has argued that transport is a sector prone to corruption, maintenance and aid management problems. However, these issues are not exclusive to transport. It is also striking to see that the EU has increased its support to infrastructure — including transport — under its regional programming, arguing that this improves complementarity between the regional and the national programming exercises, but there are no guarantees that the problems identified at the national level will get better at the regional level.

Sector concentration, coupled to strong donor policy orientations, and a bias towards productive sectors such as energy and agriculture, has also led to a relative marginalization of social sectors under the 11th EDF at the country level.

Next steps

If the EU is serious about supporting the transition to sustainable development, it may need a more holistic approach to programming aid at the national level next time.

In a nutshell, by following a top-down approach to programming, the EU has sacrificed important elements of the development effectiveness agenda, in particular country and democratic ownership, EU coordination, and a more politically savvy approach to programming aid. Such a top-down approach to programming aid may run against EU’s strategy to deliver high-impact aid.

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