Development & Cooperation, No. 02 2008, Volume 49, February 2008

Competition, Not Coordination: Making European Foreign Aid More Effective

This article was originally published with the title "Thrive on competition."

Introduction

The total sum of international official development assistance now tops $ 100 billion per year, with Europe financing almost two-thirds. But the effectiveness of aid is reduced by the low share of aid going into country programmes, donors’ fragmentation into small and often disconnected projects, and by significant volatility over time. EU efforts to harmonise member governments’ aid can help, if aid agencies become more specialised and efficient. Competition among agencies should spur such efficiency.

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