EU Politics of Foreign Aid in the Balkans: Development, Integration, and Reform in Perspective
BY ARNAUD KURZE
After over half a century of modern foreign aid practices, a vast literature has addressed the question of aid effectiveness1, particularly with regards to the questionable and perturbing record of poverty alleviation in least developed countries. Since the 1990s, however, post-Soviet countries and the war-torn Balkan region have also appeared on the donors’ lists, starting a trend for democratic transition tools in the development discourse.2 Input-oriented analysis has thus been flanked by organizational research and studies that disclose complex aid mechanisms, such as particular donor interests and domestic politics.3 As a case in point, multilateral European Union (EU) development aid to the Balkans illustrates how input-oriented theories—looking only at aid disbursement and its effects on democratic institution-building—fall short to shed light on the elusive processes of foreign assistance.
Using Southeast Europe as a regional case study, I look at structural, organizational, and political variables of EU aid in order to describe the mechanisms and dynamic processes between EU foreign assistance decisions, regional economic growth, EU enlargement, and EU reform capacity (see figure to below).
My goal is to evaluate whether EU foreign assistance is a tool to foster integration. In other words, do the financial incentives support potential candidate countries to access the EU? When grappling with this question, it is important not to ignore the EU’s institutional reform issues, such as the capacity limit problem and the debate on whether pre-accession negotiations catalyze long-needed structural transformation of the EU system. I argue that the EU does not pursue altruistic goals by advocating economic development in the Balkans, but promotes regional development that is beneficial for existing EU members such as Slovenia, Bulgaria, and Romania. Furthermore, by using conditionality the EU follows a double strategy. While it creates an incentive for the respective country to adhere to liberal trade policies, the EU is also “buying time” in order to reform EU institutions and implement structural adjustments, a sine qua non for future enlargements.
SOCIAL ENGINEERING À LA EU: EXPANDING TRADE AND PROMOTING DEMOCRACY
The EU’s promotion of liberal market economy and the expansion of the free trade space stand in contrast with the altruistic motives of development.4 Aid allocations for Southeast Europe, for instance, illustrate the EU’s à la carte commitment in the region. While certain more “advanced states,” such as Macedonia or Croatia, have access to more significant funds, Bosnia and Herzegovina mainly receives technical aid and institutional reform assistance. This discrepancy goes beyond the Balkan borders, when comparing the pre-accession instruments and the EU structural funds, for which only EU members are eligible (see table to the right). The amount of aid per capita in countries like Slovenia, Romania, and Bulgaria, is at least seventy-five times higher than in Bosnia and Herzegovina. The EU development aid therefore creates a competitive advantage for countries that have been recently admitted to the EU, widening the economic gap between adjacent non-EU member states in the Balkans and EU member states.
EU membership conditions for any Balkan state eager to join the EU hinges not only on candidate countries complying with the technical aspects of EU regulations—the so called acquis communautaire; however, it also requires accepting and implementing Western values and democratic institutions. These requirements result in complex and highly political negotiation rounds. On the one hand, the pre-candidacy stages insure flexible transition periods for accession candidates to adapt institutionally and structurally to EU requirements. On the other hand, it also leaves the EU with an important leverage to set the accession agenda. This begs the questions to what extent the EU could use this advantage in order to adjust its institutional settings for future enlargement rounds?
ENLARGEMENT DISCOURSE AND METAMORPHOSIS OF EU DEVELOPMENT AID
Although eager finance ministers, private lobby groups and economic experts in Brussels, push for market-oriented enlargement processes, they still face political and institutional constraints. Intergovernmental treaties, such as those signed in Maastricht or Nice, highlight how the political elites have incrementally integrated the constantly evolving discourse on the Union’s geographic boundaries. Interestingly, EU foreign assistance in the Balkans has changed its form and size in order to adapt to the EU’s enlargement discourse over time. Drawing on organizational concepts of Inside Foreign Aid by Judith Tendler, I explain this metamorphosis of aid.
In her work, a pillar of development aid literature, Tendler was one of the first to apply institutionalist theory, rather than input-output analysis of foreign assistance. According to her, it is the “portrayal of the organizational environment…[that plays]…a central role in determining the content of development assistance programs” (1975, 2). For this, she looks at the organizational rationality behind the behavior of development assistance organizations and explains how the US Agency for International Development (USAID) has institutionalized its discourse, structure and general functioning in response to the inter-organizational competition among US government institutions and agencies. USAID learned to absorb the outside criticism and transform it into its ontological discourse, legitimizing not only its mission, but also its programs.
This is far from obvious. In the minds of its founders, US development aid’s initial objectives were diametrically opposed to, for instance, the State Department with its long-term missions and particularly after 1945, its ideological Cold War doctrine. Foreign assistance was largely perceived as a short-time tool in the 1950s and 1960s to catalyze economic growth. Thus, the agency’s personnel had to accept limited career opportunities when working at USAID because the duration of aid programs was estimated to last no longer than five years (Ibid, 15). Several decades later, however, USAID is operational. Over the course of several decades it has managed to adapt to structural transformations and external impacts. The creation of the Millennium Challenge Corporation (MCC) in 2004 by the US government is a recent example how the agency will have to face yet another assimilation process in order to buttress its position in the political arena of US development.
Notwithstanding contextual variation, specific aspects of Tendler’s analysis are transferable to the case of EU development aid in the Balkans. In order to do so, let’s look briefly at the Central and Eastern European enlargement. During the democratic transition period in this region, the EU had several different tools, including the “Poland and Hungary: Assistance for Restructuring their Economies” (PHARE) program, the Structural Pre-Accession Instrument (ISPA)5, and the “Special accession programme for agriculture and rural development” (SAPARD).6 Despite the limited geographical intervention range of the programs, other countries eventually benefited as well. The increasing policy imbroglio was put to an end when the EU introduced a uniform tool for all pre-accession procedures in January 2007, the Instrument for Pre-accession (IPA), which replaces the panoply of aid tools used in the past.7 The main idea behind aid assistance centralization was to create a more coherent set of tools that can be applied according to specific needs (European Union 2006). What does this reorganization and rearranging in the higher levels of the EU administration imply?
As with any effort to centralize tasks, there is a goal to seize better control and increase legibility, but also to reaffirm the legitimacy of the development task by regrouping it (Scott 1998; Weber 1918). Interestingly, however, when looking at the umbrella terms for EU development, there is a threefold categorization: enlargement, neighborhood, and development. The Balkans and BiH falling into the first one. Needless to say that such a functional organization is extremely political. Countries already in the enlargement pool will eventually become EU members, while “neighbors” (especially Northern African countries and the Middle East) will only be able to strengthen trade relations with the EU, but not benefit from privileges offered by a full-fledged membership.
With this nomenclature, the EU also creates separate categories for the Balkans that are different from developing countries in Africa or Asia, abandoning cookie-cutter development practices applied a decade earlier. In the aftermath of the atrocious civil war of the 1990s, for instance, Western aid practices, using the French mission civilisatrice model, were importing cultural values to the region, including daily hygiene lessons. Offended local populations felt treated like tribal and indigenous communities that were exposed to Western civilization for the first time (Belloni 2001, 170). Following this model, the EU has incorporated its own mission civilisatrice in its development discourse, which it relentlessly promotes. Instigating euphemistic classifications, however, the EU is thus struggling to cope with aid-related identity politics. Additionally, this issue also highlights the perennial debate on whether foreign assistance is beneficial for societal development. While it is beyond the scope of this paper to tackle this problem, it is important to emphasize how local and regional reactions also shape perceptions and policies at the EU Level.
AID AND INTEGRATION: A TWO-WAY PROCESS
Ironically, the new development agenda for the Balkans stresses integration and accession albeit the EU’s absorption issues. Could this be an indirect impetus for EU institutional reform? In spite of the technical and procedural adjustment in the development aid discourse—which includes diverse hoops that candidate countries have to jump through before officially joining the EU—the accession rhetoric is not just an empty promise. The concessions that EU negotiators make when launching association talks—as well as the conditions they impose on the negotiation agenda—are part of a cyclical dynamic. Put differently, if the EU inducements are linked to a tangible goal, such as EU membership, they then incite candidate countries to implement political and economic reforms because eventually they strive to receive the next aid package. The more assistance flows into a country, the higher the pressure on Brussels to keep its promises. As a result, EU reform is likely to follow an incremental logic. Coalescing new EU member states—such as Slovenia, Romania, or Bulgaria, who benefit directly from regional development in the Balkans—are likely to lobby for an enhanced enlargement process to create a consensus among Western states, similar to Germany’s lobbying efforts to integrate Central and Eastern European countries into the EU after the fall of the Berlin wall.
LOOKING AHEAD
Since the last enlargement round in 2007, the EU has reached its institutional limits defined by the Nice treaty in 2001. Paradoxically, however, foreign assistance and accession discourses in the Balkans promote southeastern European integration into the EU. This dichotomy, instead of leading into a dead-end street, allows for progressive changes within the EU structures, because the trade and development road map for Southeast Europe constitutes an impetus for Brussels’ elites to reach a consensus on a future institutional system and EU organizations. The stake of letting the Balkans fall back into the abyss of instability, insecurity and violence is too high; and European leaders are aware of their responsibility.
Arnaud Kurze (akurze@gmu.edu) is Doctoral Student and Adjunct Professor in the Department of Public and International Affairs at George Mason University (http://pia.gmu.edu).
REFERENCES
Belloni, Roberto, 2001, Civil Society and Peacebuilding in Bosnia and Herzegovina. Journal of Peace Research 38, no. 2: 163-180.
Burnell, Peter, 2000, Democracy Assistance: International Co-Operation for Democratization. Frank Cass & Co.
Collier, Paul, 2007, The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It, Oxford University Press, USA.
Easterly, William R., 2006, The white man’s burden: why the West’s efforts to aid the rest have done so much ill and so little good, Oxford University Press.
European Union, 2006, Frequently asked questions on Instrument for Pre-Accession Assistance (IPA), November 8,
http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/06/410&format=HTML&aged=0&language=EN&guiLanguage=en. Accessed September 15, 2008.
Lancaster, Carol, 2007, Foreign aid: diplomacy, development, domestic politics, University of Chicago Press.
Sachs, Jeffrey, 2005, The end of poverty: How can we make it happen in our lifetime, London: Pergamon.
Scott, James C., 1998, Seeing Like a State: How Certain Schemes to Improve the Human Condition Have Failed, Yale University Press.
Tendler, Judith, 1975, Inside foreign aid, Johns Hopkins University Press Baltimore.
Weber, Max, 1918, Politics as a vocation, Lecture at the University in Munich.
ENDNOTES
- Collier, 2007; Easterly, 2006; and Sachs, 2005 offer more recent discussions. [↩]
- The author is aware that Germany was one of the first donor countries to introduce democracy assistance in the 1960s with its Stiftungen cf. (Burnell 2000, 37). [↩]
- This does not mean, however, that World Bank reports—which promote higher efficiency, decentralized disbursement structures, and institutional transparency in order to generate better results—are less important, nor that they have been superseded by an institutional rhetoric. [↩]
- Carol Lancaster offers an exemplary discussion of governments’ ulterior motives, using a comparative case study of five donor countries (2007). [↩]
- This former tool supports the candidate countries to prepare accession to the European Union in the field of environment and transport. [↩]
- See EU website for more information at: http://ec.europa.eu. [↩]
- See also EU website: http://ec.europa.eu/regional_policy/funds/ipa/index_en.htm. [↩]
