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When international development policy prioritises goals determined by the donor's domestic policy concerns, aid agencies not only fail in their development objectives but can also generate conflict in the recipient country. In the Bolivian Chapare, where the United States is driven by the need to demonstrate success in controlling cocaine production, policies to eradicate coca leaf have led to programmes with limited development impact that increase conflict both locally and nationally. In contrast, the European Union's successful collaboration with local governments which began in 1998 provides insights into generating sustainable development and de-escalating conflict in drug-producing regions worldwide.