Reviewing the evidence: how well does the European Development Fund perform? | ODI paper

The European Union (EU) is in the process of concluding a complex and contentious negotiation about its future seven-year budget, the Multi-Annual Financial Framework (MFF) for 2014-2020. In parallel, the EU is negotiating the budget for the European Development Fund (EDF), which covers the same period. The EDF is the EU’s main instrument for delivering development aid to the 78 African, Caribbean and Pacific (ACP) countries under the ACP–EU Cotonou Partnership Agreement. The Agreement is the world’s largest and most advanced financial and political contractual framework for North–South cooperation. Although the EDF is not part of the EU budget itself, the negotiations around the level of funding it receives are an important part of the broader debate and the outcome will be decided in conjunction with the MFF.

However, development aid has historically been considered a low political priority in the negotiations. And the development budget has suffered disproportionately from lower EU resource ceilings. Competing agendas include the Common Agricultural Policy (CAP) and structural funds. The EDF, in particular, with the main focus of its spending in sub-Saharan Africa, is at risk, with a proposed cut of around 11%.

This paper begins with an introduction to the EDF and its finances, and goes on to review the EDF’s performance in recent evaluations and assessments. It considers the main criteria typically used to assess the performance of the EDF and reviews the existing evidence against three critiques made by some Member States:

That the EDF targets middle-income countries (MICs) at the expense of a focus on poor countries.
That the EDF is inflexible in its procedures and unable to adapt quickly to changing circumstances.
That the EDF suffers from weak forecasting and slow disbursement of funds.

The paper concludes that these critiques overlook important considerations.

By Mikaela Gavas, Research Associate, Overseas Development Institute