Preferences and institutions: constraints on European Union foreign aid distribution

Abstract:

Despite its lack of a military, the European Union’s (EU’s) use of soft power is increasingly influential in world affairs. Understanding the politics behind setting the EU’s foreign aid priorities is a substantively important question. Applying a combination of factor analysis and time-series cross-sectional analysis of foreign aid received by 151 countries between 1981 and 2011, we examine the factors associated with EU foreign aid disbursement.

We find that far from being a tool of the larger member states, EU foreign aid policy is most similar to the foreign aid policies of the smaller Nordic members, Ireland and the Netherlands. Moreover, we find that measures of the human rights records of potential recipients significantly predict the amount of aid the EU disburses to those countries. Our findings shed light on the sources of EU foreign policy actions as well as on the politics within the EU.