Multi-bi Aid in European Development Assistance: The Role of Capacity Constraints and Member State Politics

We analyse the patterns of multi-bi aid in the European Union. Using newly available multi-bi aid data and a large number of staff interviews at the European Commission, the World Bank and bilateral donors, we draw three conclusions. First, the Commission's capacity constraints and lack of specific expertise have prevented it from becoming an important host of trust funds like other international development organizations. Second, the same capacity constraints can generally explain its extensive participation in trust funds at other international development organizations. In the case of large global funds, however, Commission participation often reflects the outcome of member state politics. Third, once the Commission delegates its aid to multilateral agencies, it does not impose strong substantive earmarking, but requires a high level of legal and administrative controls.