The European Union, good governance and aid co-ordination

This article reviews the EU's distinctive approach to good governance, based on policy dialogue and incentives, in light of the significant transformations that have occurred in EU development policy since the early 2000s. The argument made here is that only when the EU decided to act as a single actor was it possible to agree on a harmonised approach to good governance. By doing so, the EU sought to promote aid effectiveness and at the same time raise its profile in international politics, thus challenging the leadership of the World Bank and of the USA. It is concluded that not only has the gap between the EU's lofty ambitions and the implementation record remained wide, but also that the search for better co-ordination between European donors has resulted in decreased policy space for developing countries