Published in Bruegel’s collection of essays
Fragmented Power: Europe and the Global Economy
, Arne Bigsten’s contribution assesses the EU’s development policy, and states that “it is in Europe’s interest to have functioning and flourishing states in the developing world”, to increase trade and growth and reduce terrorism.
Bigsten outlines two further justifications for Commission (EC) support for development and poverty reduction in smaller countries: self interest in a stable and prosperous world, and solidarity with the world’s less fortunate citizens.
The author says that EC aid does “more or less the same things” as bilateral aid, “does not effectively fill any coordinating function” and is not necessarily more efficient than its bilateral equivalent. Indeed, “it is hard to see what the added value of EC aid is”.
To remedy this, future EC development policy could be expanded to cover the aid programmes of the member states, Bigsten says, suggesting that eventually they could even pool resources in a common fund.
Bigsten concludes by outlining a framework for the future EC development policy:
- Coordination between EC aid, bilateral aid and aid from other donors must be improved, perhaps making one party the coordinating agent.
- EC aid tends to be more geared towards commercial interests and less to recipients needs than bilateral funding, so it is important that a shift in allocation from national to EU level does not detract from the altruistic aim.
- The EU has an advantage relative to member states in promoting good governance and the accountability of institutions, and should focus on this role.
- Europe is “overrepresented” in global institutions, so if the EC assumed a greater role here at the expense of its member states, it would leave room for important developing countries like China, India and Brazil.
- Europe should open its markets even further as both European countries and the developing world would gain from this. Commission involvement is critical here as negotiations take place in the WTO context.
- More should be done to ensure the coherence of EU policies which influence development, as currently “action on coherence among decision-makers is limited and there is a lack of capacity to monitor policy coherence”.
- It is vital to change EC trade policy and the Common Agricultural Policy to show that the commitment to development is being taken seriously.