Multilateralism at risk - Beyond Globalisation - 2-3 April 2004, Brussels

Session 8: Multilateral aid - an EU perspective - Summary

The first speaker addressed the problems of international co-operation in aid based on the theory of collective action. The potential advantages of a multilateral approach in development co-operation are well-known: it can lead to economies of scale, a political balance, cheaper procurement, etc. But what are the conditions for co-operation between parties? On the basis of a large number of studies, the speaker identified 16 conditions for co-operation: for example, parties share a common understanding, there is a high degree of trust, parties are relatively equal, and the groups are small enough so that free-riding will be noticed. Many of the identified key requirements for co-operation do not apply in the multilateral context, however, which makes multilateral co-operation difficult. There are ways to solve this, by making sure that the requirements for co-operation are met, for example, by making the costs of defection high, by keeping the groups small, only work on a few issues that really matter, etc.

The speaker also had some practical suggestions for improving co-operation in the UN and within the EU. For the UN he suggested, among others, to reduce cherry-picking by donors, by making one fund for the UN; the UN could distribute these funds over the various specialised agencies. Concerning EU development co-operation, he called for an increased focus on poverty reduction, improved leadership and more emphasis on quality.

The second speaker addressed development co-operation in the EU, focusing on developments over the last years and possibilities for improvement. He first noted that the EU can play a key function in development co-operation, stating that the EU played a large and leading role in the Monterrey Conference on Financing for Development. He then focused on two commitments that the EU has made in the context of development co-operation. First, to increase the level of official development assistance (ODA). Here, the EU is performing well, with level of ODA as a percentage of GDP increasing; the EU is in advance of its commitments. Second, development co-operation should be more effective, by focusing on the three Cs: co-ordination, coherence and complementarity. The EU does not fare very well in this respect. Development co-operation is often not coherent with donors’ domestic policies or between different donor countries. The lack of the three Cs means that development aid requires a lot of time from the recipients because of all the donors they have to deal with.

The speaker also thought it is a responsibility of the EU to display leadership in putting dynamism in North-South relations. The EU can do much to improve effectiveness and reduce transaction costs, e.g. by implementing a common framework for aid implementation. According to the speaker a major problem in this respect is that member states are reluctant to give up their own bureaucracies and flag works. This has to change in order to improve the effectives of EU development aid. More effective EU institutions are needed.

The first discussant asked how the EC thinks that it can improve co-ordination and coherence in practical terms. She also addressed the direction of EU aid, with financial aid flows to LDCs decreasing both in absolute and relative terms as a share of total EU aid. In that respect, the enlargement of the EU can also have important implications. Accession countries have no strong tradition in development co-operation: they focus on neighbouring countries rather than on the LDCs.

The second discussant raised the issue of the EU’s own experience. Within the EU there are skills, well-functioning institutions and management, and also large budgets like the structural funds. It would be good if the EU could apply its experience over the last decades to its development co-operation policies.

In the discussion, participants raised the issue of the importance of coherence, the fact that there is cherry-picking among donors in providing funds to multilateral institutions, and that the EU needs to develop some independent thinking on development co-operation, rather than following the IMF and World Bank development agendas.

Session 8: Speakers

Chair: Willem Molle (ECORYS-NEI, Erasmus University)

Speakers: Simon Maxwell (ODI, UK), Hugo Maria Schally (EC DG Development)

Discussants: Naomi Leefmans (EU-LDC Network Secretariat), Luis Rappoport (University of Bologna, Buenos Aires)

Session 8 - Papers and Presentations All files are downloadable files are Word documents unless specified otherwise.
	Why cooperate? A Multi-Disciplinary Study of Collective Action - Sarah Gillinson (PDF)

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