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Keywords:

  • aid effectiveness;
  • aid systems;
  • economic cooperation;
  • institutional change;
  • bilateral aid;
  • European Union;
  • transition economies

Abstract

This article analyses aid effectiveness from the donor's perspective. An aid contract is effective for the donor when she is able to observe her required levels of trade and institutional change on the territory of the recipient. The distinction between reciprocal, normative and just donors indicates three different approaches to aid effectiveness. The aid systems of the United Kingdom, Germany and the European Union are cases that differentiate along the lines of donors whose primary intentionality lies in the accumulation of trade and investment profits, donors that advance the implementation of institutional change and donors that put equal weight in both strategies. The existence of numerous veto players in the German aid system and the singularity of administrative organization in the British aid system operationalise the distinction between normative and reciprocal donors. The aid system of the European Union is defined as just because economic cooperation or institutional change alone is treated as insufficient for aid effectiveness. Hence, the success of the Technical Assistance to the Commonwealth of Independent States Program (TACIS) is due to the strategic choices of European Union bureaucrats and their treatment of antithetical donor preferences as complementary in the process of aid implementation. Copyright © 2011 John Wiley & Sons, Ltd.