Trading for Aid: European Union Development and Pre-Accession Assistance.

This paper studies levels official development aid and pre-accession assistance provided by the European Commission by assessing the economic, political and institutional factors that determine why such assistance varies by recipient countries and years. Using ODA commitments, ODA disbursements, as well as pre-accession aid provided through the Phare and Cards programs as dependent variables, the paper analyses data for 153 countries over the 1970-2006 time period. The analysis reveals that while donors often ignore the receiving country’s needs with respect to political development, the latter’s economic needs significantly affect level of assistance. The analysis also shows ODA recipient countries that are former colonies of the EU member states receive higher levels of assistance simply because of their colonial past as well as when their former colonial power holds the rotating presidency of the European Council. Donor economic interests, expressed in trade relations, however, are among the most consistent and substantively significant explanations of aid variation, i.e. countries with larger share of the EU’s world exports receive higher levels of assistance than recipients that tend to imports less from the EU. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]