The Bumpy Road from Paris to Brussels: The European Commission Governance Incentive Tranche

Abstract

The EC recently launched a new aid instrument for the ACP-community: the “governance incentive tranche”, a modality designed to incentivise ACP-governments to carry out governance reforms. In this paper we analyse whether this new initiative incorporates the principles spurred by the aid effectiveness debate and adopted by the Paris declaration (2005). Evidence suggests that in design and practice, the incentive tranche is surprisingly similar to some of the unsuccessful aid modalities of the past. The paper argues that in order to fully grasp the complexity of donor behaviour, the donor’s domestic issues and political arrangements have to be brought into the analysis. The incentive tranche illustrates how the complexity of the European construction makes formulation of a coherent policy exceptionally difficult.