Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions - Governance in the European Consensus on Development - Towards a harmonised approach within the European Union {SEC(2006) 1020} {SEC(2006) 1021} {SEC(2006) 1022}
Date: 2006-08-30
Institutions: European Commission
Subjects: EU policy, cooperation policy, developing countries, development policy, governance

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 30.8.2006 
COM(2006) 421 final 

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE 
EUROPEAN PARLIAMENT, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

Governance in the European Consensus on Development 

Towards a harmonised approach within the European Union 

{SEC(2006) 1020} 
{SEC(2006) 1021} 
{SEC(2006) 1022} 

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TABLE OF CONTENTS 

Introduction ................................................................................................................................ 3 

1. 

1.1. 

1.2. 

1.3. 

1.4. 

2. 

2.1. 

2.2. 

2.3. 

2.4. 

3. 

3.1. 

3.2. 

3.3. 

A stronger, innovative approach to democratic governance........................................ 5 

The many facets of governance.................................................................................... 5 

Ownership, dialogue and measuring progress ............................................................. 6 

Addressing the dual problem of political legitimacy and capacity building................ 8 

Harmonising approaches within the EU and with other international players............. 9 

Governance initiative: the ACP countries and the Strategy for Africa...................... 10 

ACP countries: dialogue on governance and aid programming................................. 10 

ACP countries: governance priorities and programmes............................................. 12 

Africa: support to African mechanisms ..................................................................... 13 

From Community to European level.......................................................................... 14 

Dialogue and programmes relating to cooperation with the other countries and 
regions ........................................................................................................................ 15 

Governance and the European Neighbourhood Policy (ENP)................................... 15 

Latin America............................................................................................................. 17 

Governance in Asia .................................................................................................... 18 

Conclusions .............................................................................................................................. 20 

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INTRODUCTION 

Poverty  reduction  and  the  Millennium  Development  Goals  (MDG)  will  not  be  achieved 
without  decisive  progress  in  the  areas  of  economic,  social,  environmental  and  political 
governance.  Development,  human  rights,  peace  and  security  are  indivisible  and  mutually 
reinforcing. In an increasingly globalised and interdependent world, peace and security hang 
to  a  great  extent  on  the  political  will  and  ability  of  governments  and  institutions  to  pursue 
policies  geared  to  the  rule  of  law,  the  protection  of  human  rights,  democratic  governance, 
eradicating poverty, promoting sustainable development and reducing the inequalities that lie 
at the root of the main challenges facing the world. 

The European Consensus on Development sets out the EU’s approach and contribution to this 
approach, identifying good governance, democracy and respect for human rights as integral to 
the  process  of  sustainable  development  and  as  major  objectives  of  EU  development  policy. 
The substantial increase in the volume of aid expected over the next few years demands the 
establishment of governance that will guarantee the efficiency and effectiveness of this new 
EU aid. The MDGs cannot, however, be achieved by financial resources alone. 

Community  policies,  each  having  an  external  dimension,  need  also  to  contribute  to  good 
governance.  Means  that  the  EU  has  at  its  disposal  are  various,  including  political  dialogue, 
conflict  prevention  measures,  cooperation  with  regional  and  international  organisations, 
thematic  programmes,  electoral  observation,  as  well  as  national  development  programmes, 
subject to multi-annual joint programming.  

The  political  dialogue  and  development  aid  programming  addressed  in  this  communication 
are  two  pivotal  moments  in  EU  relations  with  developing  countries;  they  provide  an 
opportunity  together  to  take  stock  of  the  situation  and  the  need  for  reform,  to  encourage 
change and to adopt the requisite support measures. They also serve to highlight governance 
issues with international implications.  

The principles on aid effectiveness adopted in March 2005’s Paris Declaration and approved 
by  the  Council  in  April 2006  must  be  applied fully  to governance.  The Community and the 
Member  States  must  therefore  work  with  each  other  and  with  the  other  donors  and 
international organisations to provide complementary and harmonised support for the partner 
countries’ efforts in this area. 

Accordingly,  the  Commission  proposes  that  the  Community  and  the  Member  States  agree 
practices  and  principles  for  dialogue  and  cooperation  with  developing  countries  on 
governance. The objective is gradually to develop a coherent common approach to promoting 
all  aspects  of  democratic  governance.  This  will  reinforce  the  concept  of  governance,  which 
was the subject of a communication and Council conclusions in 20031, and give it a new place 

1 

COM(2003) 615 “Governance and Development”. Governance concerns the state's ability to serve the 
citizens.  Governance  refers  to  the  rules,  processes,  and  behaviour  by  which  interests  are  articulated, 
resources  are  managed,  and  power  is  exercised  in  society.  The  way  public  functions  are  carried  out, 
public  resources  are  managed  and  public  regulatory  powers  are  exercised  is  the  major  issue  to  be 
addressed in that context. Governance is a basic measure of the stability and performance of a society. 
As  the  concepts  of  human  rights,  democratisation  and  democracy,  the  rule  of  law,  civil  society, 
decentralised power sharing, and sound public administration gain importance and relevance, a society 
develops into a more sophisticated political system and governance evolves into good governance. 

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in  development  policy.  The  Commission  is  also  proposing  innovative  implementing 
arrangements for cooperation with the ACP States, reiterating a number of priorities proposed 
for  the  Caribbean  and  Pacific  countries  and  launching  a  special  initiative  for  Africa,  as 
announced  in  the  European  Council’s  conclusions  of  December 2005,  “The  EU  and  Africa: 
Towards a strategic partnership”, to which the Member States are invited to sign up.  

This  communication  is  divided  into  three  parts.  The  first  sets  out  the  ways  of  approaching 
governance  and  supporting  the  processes  of  democratic  governance  in  development 
cooperation.  The  second  outlines  their  application  in  Africa  and  in  the  ACP  countries.  The 
third describes the Community's approach to democratic governance in the cooperation with 
other countries and regions. 

The communication takes account of the conclusions and recommendations of an evaluation 
report, finalised in March 2006, on European Community support for good governance, which 
deserves to be widely debated with a view to improving Community action in this area2.  

It  adds  to  work  under  way  on,  for  instance,  the  EU’s  approach  to  promoting  democracy  in 
external relations and could be followed up by other initiatives, such as the establishment of a 
framework  of  action  for  good  financial,  fiscal  and  judicial  governance  in  the  EU’s  external 
action. 

2 

See impact assessment SEC(2006) 1021. 

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1. 

A STRONGER, INNOVATIVE APPROACH TO DEMOCRATIC GOVERNANCE 

1.1. 

The many facets of governance 

Governance  has  become  a  priority  in  many  donors’  development  policies  and  aid 
programmes. It lies at the heart of many partner countries’ development strategies. Achieving 
the MDGs calls for proper delivery of public services and sustained economic growth based 
on the development of the private sector; these things are possible only in a climate of good 
governance.  At  a  time  of  rising  aid  budgets,  commitments  to  ensure  the  effectiveness  of 
international aid and growing economic and financial interdependence, the emergence in the 
developing  countries  of  a  level  of  governance  commensurate  with  the  expectations  of  their 
citizens and the international community is now high on the agenda. 

There  is  a  growing  consensus  on  the  relevance  of  a  broad  approach  to  governance  in 
development cooperation, an approach based on the universal principles3 and objectives and 
the common aspirations that must inform the main functions of government, all areas of state 
intervention and the interaction of public institutions and citizens.  

A broad approach 

There  is  no  particular  institutional  model  for  democratic  governance,  which  simply  affirms 
the rights of all citizens on the road to sustainable development. It includes: respect of human 
rights  and  fundamental  freedoms  (including  freedom  of  expression,  information  and 
association);  support  for  democratisation  processes  and  the  involvement  of  citizens  in 
choosing and overseeing those who govern them; respect for the rule of law and access for all 
to  an  independent  justice  system;  access  to  information;  a  government  that  governs 
transparently  and  is  accountable  to  the  relevant  institutions  and  to  the  electorate;  human 
security;  management  of  migration  flows;  effective  institutions,  access  to  basic  social 
services,  sustainable  management  of  natural  and  energy  resources  and  of  the  environment, 
and the promotion of sustainable economic growth and social cohesion in a climate conducive 
to private investment.  

The different levels of governance (local, national, international) are also important. The key 
role that local authorities can play in achieving the MDGs has to be underlined. But account 
must  also  be  taken  of  the  cooperation  expected  at  international  or  regional  level  to  resolve 
global problems. 

Governance is more than just tackling corruption 

Good  governance  means  more  than  tackling  corruption.  Though  the  EU  takes  an  extremely 
firm stance on this matter, viewing corruption as a major obstacle to achieving development 
goals, it nevertheless sees it as a symptom of poor governance and of a lack of transparent, 
accountable management and control systems. Tackling corruption must not be addressed in 
isolation but integrated into development and poverty reduction strategies and into support for 
the  processes  of  democratic  governance.  This  means  strengthening  the  role  of  civil  society 
and  the  media,  protection  for  multiparty  democracy and electoral competition, a  transparent 

3 

These principles have been developed by the adoption by the international community of a considerable 
number of international conventions and normative acts. 

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system  for  financing  political  parties  and  support  for  parliamentary  oversight  and  for  other 
public and judicial institutions. 

The multidimensional nature of governance in cooperation programmes 

Democratic governance is to be approached holistically, taking account of all its dimensions 
(political, economic, social, cultural, environmental, etc.). This multidimensional nature must 
be  reflected  in  development  cooperation  practice.  Accordingly,  the  concept  of  democratic 
governance has to be integrated into each and every sectoral programme4.  

A  compartmentalised  approach  to  governance  must  be  avoided:  political,  economic,  social 
and  environmental  factors  are  often  very  tightly  interwoven.  For  instance,  good  governance 
by  government  institutions,  especially  those  responsible  for  public  finances,  and  respect  for 
the  rule  of  law  help  create  an  environment  conducive  to  sustainable  economic  growth  and 
private  investment.  By  the  same  token,  poor  governance  of  natural  and  energy  resources  in 
countries  with  resources  such  as  diamonds,  oil,  timber  and  fish  can  lead  to  violations  of 
human rights and the rule of law and, ultimately, to armed conflict. Efforts to promote decent 
work,  especially  through  social  dialogue  and  the  effective  implementation  of  ILO 
conventions, are often accompanied by measures facilitating access to essential social services 
and have a positive impact on social cohesion, economic performance and poverty reduction. 

The  staff  working  paper  contains  specific  examples  of  governance  support  programmes5: 
support for electoral processes, civil society, parliaments, decentralisation, judicial reform, the 
security sector, the management of public finances, etc. 

1.2. 

Ownership, dialogue and measuring progress 

The  European  Community  supports  the  processes  of  democratic  governance  under  a 
partnership-based approach, through dialogue with partner countries’ governments and,  as a 
donor, through its various financial instruments. To maximise its impact, it needs to combine 
the means of action available to it more effectively and thereby strengthen its role as an agent 
for change, with due regard for the principles of partnership and ownership. 

New opportunities for enhanced dialogue on governance 

New opportunities have arisen in the dialogue between development partners. There is now a 
political desire for change in many countries.  

There  is  also  a  growing  awareness  on  the  part  of  all  donors  that  they  need  to  promote 
innovative and more effective cooperation methods, even in fragile states, and to coordinate 
their approaches better. The importance attached to democratic governance in the broad sense 
itself demands new methods and practices, changes in “aid governance”, based on the concept 
of mutual commitments.  

Lastly,  as  states  grow  ever  more  interdependent,  dialogue  on  the  consequences  and 
responsibilities  arising  from  interdependence  must  help  identify  the  impact  on  a  country's 

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5 

The principle of mainstreaming governance, democracy and human rights is enshrined in the European 
Development Consensus. 
SEC(2006) 1020. 

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partners  of its policies  in, for instance,  the  financial  and  fiscal  spheres, where the degree of 
interdependence is high. 

Ownership rather than conditionality 

The processes of democratic governance based on the universal principles cited above cannot 
be imposed from outside. In relations between the partner country and donors, it is vital that 
ownership of the reform processes be respected. Only the countries concerned can decide and 
implement  their  reforms.  If  there  is  no  political  will  inside  the  country,  outside  support  is 
unlikely  to  deliver  results.  The  donors  do,  however,  have  an  important  role  to  play  by 
developing incentive-based approaches.  

Respecting this ownership also means respecting the pace and schedule of reform processes, 
which are intrinsically complex and long-term, as they go to the very heart of the organisation 
of  a  state  and  a  society.  However,  this  can  never  justify  non-compliance  with  international 
agreements and acts ratified on “essential elements” or a lack of ambition or credibility in the 
achievement of the expected reforms. 

Dialogue rather than sanctions 

Dialogue  must  be  the  preferred  means  of  encouraging  countries  to  embark  on  reforms. 
Unilaterally  imposing  new  conditions  must  be  avoided.  Dialogue  must  have  a  substantial 
preventive  dimension  and  permit  the  discussion  of  often  politically  sensitive  issues  such  as 
respect  for  human  rights,  democratic  principles  and  the  rule  of  law,  the  reform  of  security 
systems, economic and financial governance, the management of natural and energy resources 
and  matters  of  social  governance.  Sanctions  may  nevertheless  prove  necessary  in  serious 
cases. In such instances incentive approaches must also be developed to remedy the problems 
identified.  

The  EU  must  enhance  the  performance  of  its  various  mechanisms  for  dialogue  and  current 
guidelines  by  tightening  their  operational  relationship  with  programming,  monitoring  and 
dialogue on cooperation programmes6.  

Assessing governance 

The  dialogue  must  cover  the  evaluation  of  governance  and  the  progress  made,  along  with 
appropriate action in the event of bad governance. The main purpose of assessing the state of 
a  country's  governance  is  not  to  establish  a  ranking  but  chiefly  to  help  identify  the  most 
appropriate reforms and support measures. 

All development partners must be able to assess the quality of governance in a country and 
gauge the ambition, relevance and credibility of a government’s reform commitments on the 
basis of suitable indicators. The indicators must be adaptable to the specific circumstances of 
fragile  and  post-conflict  states.  For  support  to  be  effective,  the  local  context  and  political 
systems need to be analysed in depth and factors and agents for change identified.  

6 

EU guidelines on human rights dialogue, adopted by the Council in December 2004 (doc. 15810/104). 
Structured dialogues (with China and Iran), dialogues based on the Cotonou Agreement (Articles 8, 96 
and 97), association agreements with Mediterranean countries, trade and cooperation agreements (e.g. 
Philippines,  countries  of  the  Caucasus  and  Central  Asia)  and  ad hoc  decisions  (e.g.  Russia,  Vietnam, 
Pakistan and India). 

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This analysis and the indicators used must be the subject of a regular, transparent dialogue in 
order to track trends and developments.  

Measuring  progress  in  democratic  governance  has  recently  proved  to  be  feasible.  This 
development, which must not lead to a mechanistic approach, is politically important in that it 
permits the development of useful indicators to help identify the reforms needed and compare 
countries  at  international  level.  Having  both  national  and  international/global  indicators  is 
useful because they serve different purposes. The international indicators permit comparison 
at  world  level.  National  indicators  help  establish  national  standards  based  on  the  country’s 
priorities  for  improving  governance.  The  indicators  developed  by  the  partner  country  itself 
have a greater incentive effect in that they encourage politicians to be accountable to citizens 
and  institutions  and  enable  civil  society  and  the  media  to  get  involved  in  a  monitoring 
process.  The  different  types  of  indicator  must  not  be  seen  as  competing  but  as  a  set  of 
complementary tools to be used according to the situations or problems that arise.  

Encouraging participatory evaluations 

It  is  important  to  encourage  governments,  politicians,  independent  public  bodies  and  civil 
society to develop their own tools and capabilities for identifying the reforms needed and for 
gauging the situation and the progress made. These national indicators must comply with the 
principles of ownership, participation and transparency and permit the necessary reforms to be 
identified7. This approach is likely to stimulate demand for reform and thereby reinforce the 
processes of democratic governance.  

Gradual approaches 

Support for governance must be tailored to each country’s situation. Faced with problems of 
bad  governance  or  analysis  showing  a  need  for  reforms,  the  EU’s  approach  must  be 
progressive,  proportionate,  transparent  and  dialogue-based  with  a  view  to  raising  standards 
gradually.  This  applies  not  only  to  the  political  and  institutional8  elements  but  also  to  the 
social, environmental and economic aspects of governance. 

1.3. 

Addressing the dual problem of political legitimacy and capacity building 

Many developing countries need a lasting solution to the gap between the lawfulness of the 
state’s  institutions  and  their  legitimacy  in  the  eyes  of  the  citizens.  Whereas  democratic 
lawfulness  depends  on  free  elections,  legitimacy  hinges  above  all  on  the  government’s 
capacity  to  keep  its  election  promises  and  meet  citizens’  needs.  In  this  context,  the  internal 
processes of dialogue and interaction between the different stakeholders in partner countries 
are  crucial.  The  EU  is  backing  the  gradual  establishment  of  participatory  approaches  by 
governments  when 
the  active 
involvement  of  a  broad  range  of  civil  society  stakeholders  (associations,  grassroots 
organisations, non-governmental organisations, media, employers and trade unions), political 
movements  and  institutions  representing  citizens  (parliaments,  local  and  decentralised 
authorities)  applies  the  principles  of  democratic  governance  and  favours  the  viability  of 
reform programmes. 

their  development  strategies.  Promoting 

they  design 

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8 

The METAGORA project described in the working paper illustrates this process. 
The  dialogue  on  the  essential  elements  of  the  Cotonou  Agreement  is  described  in  Annex 1  to  the 
working paper. 

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Budget support, a preferential arrangement 

A  fairly  extensive  range  of  development  cooperation  instruments  can  be  used  to  deliver 
appropriate  responses  and  the  requisite  support  to  partner  countries’  efforts  to  reform.  The 
growing  trend  towards  instruments  based  on  dialogue  and  led  by  the  partner  countries’ 
demands  (programme  approach/SWAp,  general  or  sectoral  budget  support)  opens  up  real 
scope for promoting democratic governance.  

Alignment  on  the  partner  countries’  development  strategies  and  increasing  use  of  budget 
support  reinforce  the  role  of  the  national  democratic  institutions,  e.g.  parliaments,  directly 
involved in the relevant decision-making processes under national law. Due account must also 
be taken of decentralisation strategies when implementing these instruments, otherwise they 
might lead to further centralisation. 

The  international  community  should  also  give  greater  thought  to  more  predictable  aid 
mechanisms, permitting long-term support for change, which are particularly relevant in this 
context.  Regular,  coordinated  monitoring  of  developments  in  governance  processes  must  be 
based  on  the  sharing  of  information,  evaluations  and  analyses,  which  must  in  turn  be 
underpinned  by  transparent  dialogue  between  partners  on  the  priorities  for  reform.  The 
processes and criteria for allocating aid according to developments in the governance situation 
must be transparent for the partner country. 

A preventive approach to fragile states 

New, complementary approaches must nevertheless be explored, especially in fragile states.  

In  fragile  states,  especially  difficult  partners,  a  lack  of  political  legitimacy  is  often 
compounded  by  very  limited  capacities.  Addressing  governance  in  these  states  demands  a 
step-by-step approach aimed at gradually raising standards. Many countries must first achieve 
basic stability and a minimum of institutional development before they can start implementing 
a  long-term  development  policy.  If  EU  aid  to  fragile  states  is  to  be  made  more  effective, 
lessons  must  be  learned  from  past  mistakes:  “stop  and  go”  financing  decisions  based  on  a 
government’s short-term performance leading to fluctuations in aid flows and uncertainty as 
to  future  financing;  the  imposition  of  conditions  linked  to  past  performance  in  matters  of 
governance; inadequate harmonisation between donors; the marginalisation of certain fragile 
states; a lack of coherent external action in matters of governance, security and development. 

Post-crisis  situations  also  call  for  integrated  transition  strategies  to  rebuild  institutional  and 
administrative capacities, infrastructure  and basic social services, increase food  security  and 
deliver  lasting  solutions  with  regard  to  refugees  and  displaced  persons  and,  more  generally, 
the  security  of  citizens.  The  need  to  prevent  states  becoming  fragile  and  a  concern  not  to 
marginalise  the  most  vulnerable  countries  and  peoples  are  an  integral  part  of  the  EU’s 
approach;  this  is  as  much  in  the  interests  of  solidarity  as  of  international  security  and  aid 
effectiveness. 

1.4. 

Harmonising approaches within the EU and with other international players 

Today most donors consider governance a priority. It is important that each should share its 
analytical tools with the others and avoid engaging in one-on-one dialogues with the partner 

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country in unilateral, uncoordinated support of certain reforms. The Paris Declaration on aid 
effectiveness  and  the  Council  conclusions  on  the  same  subject9  must  be  applied  fully  to 
governance.  The  Member  States  and  the  Commission  have  pledged  to  move  towards  joint 
programming, to develop operational principles for applying the principle of complementarity 
and division of labour and to facilitate cofinancing operations. 

The  aim  is  not  to  impose  standardised  approaches.  This  would  be  neither  realistic  nor 
desirable.  All  donors  should  nevertheless  be  involved  in  an  open  dialogue  with  the  country 
concerned  and  agree  on  operations  and  responses  to  priority  issues  in  the  matter  of 
governance.  External  support  must  be  founded  on  national  priorities  and  programmes  and 
make  use  of  existing  national  or  regional  structures.  The  drafting  processes  for  poverty 
reduction strategies, joint assistance strategies and the African Peer Review Mechanism can 
provide a springboard in many countries.  

Emerging players 

A dialogue on governance in development cooperation should also be initiated with emerging 
political and financial players10. This issue could be raised in the bilateral dialogue between 
the  EU  and  the  countries  concerned.  It  should  also  figure  prominently  in  efforts  to  involve 
them  in  the  multilateral  agenda  for  aid  effectiveness  in  the  relevant  organisations  and 
forums11. 

2. 

GOVERNANCE INITIATIVE: THE ACP COUNTRIES AND THE STRATEGY FOR AFRICA 

2.1. 

ACP countries: dialogue on governance and aid programming 

to  bring 

lasting  benefits.  Though  governance 

The EU expects ACP partners to embark on the reforms necessary for development aid and 
international  cooperation 
is  already 
systematically included in the regular political dialogue with the ACP countries, it will play 
an even more strategic role in the future, especially when programming the 10th EDF. A new 
incentive-based  approach  will  be  followed.  An  in-depth  dialogue  will  be  established; 
structured  around  parameters  for  gauging  progress  and  performance,  it  will  include  the 
Member  States  and  other  donors.  The  tools  developed  for  analysis  and  dialogue  in  the 
programming  process  -  tools  which  include  the  political  dimension  of  partnership  while 
addressing  the  many  facets  of  governance  -  should  in  their  turn  inform  political  dialogue 
under Article 8 of the Cotonou Agreement.  

€3 billion for governance 

When  preparing  new  cooperation  strategies  with  the  ACP  countries,  the  Commission  will 
propose  granting  additional  financial  support  to  countries  adopting  or  ready  to  commit 
themselves to a plan that contains ambitious, credible measures and reforms.  

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GAER Council meeting of 11 April 2006. 
BRICS: Brazil, Russia, India, China and South Africa. 
See 
"Options 
the  DAC’s 
DCD/DAC(2006)31/rev1. 

differentiated 

for 

engagement  with 

non-DAC 

donors", 

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This  innovative  approach  translates  into  operational  terms  the  principles  set  out  in  the  first 
part  of  this  communication;  based  on  dialogue  and  incentives,  it  is  aimed  at  bringing  real 
change and decisive progress in democratic governance.  

Part  of  the  financing  allocated  to  ACP  countries  under  the  10th  EDF  will  be  set  aside  for 
incentives.  A  sum  of  €2.7 billion12  has  been  earmarked  for  this  purpose  in  the  national 
packages; there will also be regional funding. Access to these incentives will depend on the 
outcome of an enhanced dialogue between the Commission and the country concerned on that 
country's governance plan. 

The  governance  profile  presented  in  the  staff  working  paper13  is  aimed  at  facilitating  this 
dialogue and detailed assessment. On the basis of a series of simple questions, it provides an 
overview of the situation in a partner country for the purposes of guiding dialogue on current 
or  planned  reforms,  identifying  the  main  difficulties  or  weaknesses  and  facilitating  the 
identification of areas for cooperation. It addresses governance from the political, economic, 
institutional,  financial,  fiscal  and  judicial  standpoint  and  in  terms  of  the  management  of 
natural resources and of migration flows. Aware of the need both to avoid creating new aid 
conditions and to harmonise donors’ approaches as far as possible in the obvious interests of 
effectiveness,  the  European  Commission  has  based  the  profile  on  existing  indicators  and 
studies14,  complementing  them  with  certain  components  specific  to  EU  policy,  and  in 
particular  components  derived  from  the  political  dialogue  with  partner  countries  on  human 
rights, democracy and topics such as security and migration.  

Considering  the  value  and  the  importance  of  the  evaluation  processes  conducted  by  the 
countries  themselves  under  participatory  and  transparent  approaches,  the  Commission  will 
take account of any such “self-assessments” that may exist. Where, for instance, peer reviews 
have been carried out under the APRM, the resulting reports will be used as a basis for the 
profile.  

Six steps for determining access to the incentive reserve and monitoring of results 

1. Assessment of the state of governance and trends 

The situation will be assessed on the basis of (i) indicators identified in the profile and their 
trend  over  time  and  (ii)  international  indicators.  These  two  sets  of  indicators  will  inform  a 
discussion between the Commission and the Member States present in a given partner country 
in order to reach a quantitative assessment of the state of governance in that country and the 
trend. The international indicators provide a benchmark in that any significant deviation from 
the  profile  must  trigger  an  in-depth  discussion  for  the  purposes  of  explaining  and  justifying 
the deviation observed. There is no pre-established weighting of the different indicators used: 
all nine categories identified in the profile have to be taken into account. 

12 

13 

14 

The 10th EDF totals €22.6 billion for the period 2008-2013.  
SEC(2006) 1020, Annex 2. 
Especially  the  governance  indicators  monitored  by  the  World  Bank  Institute  for  204  countries  since 
1996. 

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2. Assessment of the main weaknesses 

The Commission and the Member States present in the country will use the set of indicators in 
the  profile  to  identify  weaknesses  calling  for  reforms.  The  relative  importance  of  these 
weaknesses will also be assessed. 

3. Programming dialogue and identification of government’s main reform commitments (the 
country’s governance plan) 

In  the  dialogue  initiated,  the  government  will  be  invited  to  present  its  plan  of  current  and 
future  reforms.  This  plan  will  be  discussed  in  the  light  of  the  weaknesses  identified  in  the 
profile shared with the government. This dialogue is intended to encourage the government to 
commit itself to taking the measures necessary to remedy the weaknesses identified. The list 
of commitments given by the government in the wake of this dialogue will be annexed to the 
CSP.  

4. Assessment of the government’s commitments: relevance, ambition, credibility 

The  Commission  and  the  Member  States  will  assess  the  extent  to  which  the  commitments 
given by the government address the main weaknesses identified and are relevant, ambitious 
and credible. The aim is to avoid unrealistic promises and partial measures that fail to address 
the problems raised.  

5. Decision on access to the incentive tranche 

The decision to grant access to the incentive tranche and the ratio of this tranche to the initial 
allocation will be based on the assessment of the situation and the reform commitments given 
in the dialogue. The incentive effect and the encouragement given to reforms are paramount, 
without penalising (in relative terms) those countries that have already achieved satisfactory 
standards  of  governance.  Corrective  factors  will  be  taken  into  consideration  as  a  country’s 
absorption capacity or specific situations as in the case of post-conflict countries.  

6. Monitoring of performance 

The governance profile and commitments will be monitored regularly and the actual results of 
reforms  analysed  by  the  Commission,  the  Member  States  on  the  ground  and  the  partner 
country.  On  the  basis  of  this  analysis  and  in  line  with  the  revised  Cotonou  Agreement,  a 
country’s  allocation  may  be  increased  annually  in  the  event  of  outstanding  performances. 
Allocations may also be increased or decreased at the time of the mid-term review (2010) and 
the  end  of  term  review  (2012).  The  governance  profile  and  commitments,  which  are  the 
foundation of a new contractual approach, will thereby be taken into account at every stage of 
the programming cycle.  

The governance profile, which will be tested during the first stage of programming the 10th 
EDF for the ACP countries, could be improved and adapted in the light of experience.  

2.2. 

ACP countries: governance priorities and programmes 

In the Community’s country programmes, governance could  be  identified  as  a focal  area or 
non-focal  area,  especially  for  support  for  institutional  reform,  for  capacity  building  or  for 

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establishing the requisite conditions for budget support. In all countries, governance will be 
mainstreamed in focal and non-focal areas.  

The  Community  is  already  active  in  a  wide  range  of  areas15  with  a  view  to  promoting 
processes of democratic governance through dialogue and financial support. In the case of the 
ACP  countries,  when  the  9th  EDF  was  programmed,  governance  was  identified  as  a  focal 
sector in some twenty indicative programmes, accounting for a total of €879 million or 10% 
of  all  programmable  funding,  including  just  over  €200 million  in  aid  to  non-state  actors.  A 
proportion  of  general  budget  aid  must  also  be  viewed  as  support  for  governance,  especially 
for economic and institutional reforms. 

All  these  activities  will  be  continued  and  stepped  up.  New  practices  will  also  be  developed 
and  implemented  according  to  the  principles  of  the  enhanced  approach  referred  to  above, 
incorporating  the  conclusions  and  recommendations  of  the  evaluation  reports  and  taking 
account of the new provisions of the Cotonou Agreement (new Annex VII, amendments to the 
provisions  concerning  the  political  dialogue  on  the  essential  elements)  and  the  regional 
strategies  recently  adopted  for  Africa16,  the  Caribbean17  and  the  Pacific18,  which  give 
considerable attention to governance.  

The  priority  for  Africa  will  be  to  support  change  and  the  implementation  of  governance 
reforms  at  local,  national  and  regional  level  and  to  encourage  the  African  countries  to  take 
part in peer-review processes. Boosting social and economic vectors at local level is a lever 
for  economic  growth  and  a  factor  for  sustainable  development,  given  the  role  of  local 
authorities in providing access to services directly related to the MDGs (water and sanitation, 
etc.).  Support  for  other  democratic  institutions,  such  as  national  parliaments,  and  capacity-
building  measures  for  the  Pan-African  Parliament  will  also  figure  among  the  priorities.  For 
the  Caribbean  and  the  Pacific  regions,  the  Community’s  priority  will  be  to  promote  good 
financial,  fiscal  and  judicial  governance.  These  regions  need  to  rapidly  implement  OECD 
standards on transparency and the effective exchange of information for tax purposes and to 
eliminate  harmful  tax  practices.  Special  attention  will  be  paid  to  such  problems  as  money 
laundering, organised crime and terrorist financing.  

2.3. 

Africa: support to African mechanisms 

The  political  will  to  reform  and  progress  towards  good  governance  is  consolidating  in  the 
African  partner  countries.  The  EU  has  pledged  to  support  good  governance  programmes  in 
these  countries  and  to  help  build  the  capacities  of  the  African  Union  and  of  regional  and 
national  institutions  in  Africa  and  to  support  African  efforts  to  improve  and  monitor 
governance  through  dialogue  and  consultation  with  its  African  partners19.  Governance  has 

15 

16 

17 

18 

19 

aid, 

development 

For  further  details  of  programmes  and  projects,  evaluations  and  reports  on  the  implementation  of 
see:  http://europa.eu.int/comm/europeaid/projects/index_en.htm 
Community 
http://europa.eu.int/comm/europeaid/evaluation/index.htm 
http://europa.eu.int/comm/europeaid/reports/index_en.htm 
“The EU and Africa: Towards a strategic partnership”, Council of the European Union, doc. 15961/05 - 
19.12.2005. 
“An EU-Caribbean partnership for growth, stability and development” - COM(2006) 86, 2.3.2006. 
“EU relations with the Pacific Islands - A strategy for a strengthened partnership” - COM(2006) 248, 
29.5.2006. 
“The EU and Africa: Towards a strategic partnership”, Council of the European Union, doc. 15961/05 - 
19.12.2005. 

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now been mainstreamed in dialogue and cooperation between the Pan-African institutions and 
the EU.  

The African Peer-Review Mechanism (APRM) offers real scope for encouraging reforms and 
mutual learning. Specific EU support for the APRM is proposed at three levels:  

–  at Pan-African level: support for the APRM secretariat, its reviews and missions; 

–  at regional level: support for involving regional organisations in disseminating the results 
of  reviews  (discussion  of  country  reports,  exchange  and  dissemination  of  good  practice, 
promotion of membership of APRM, etc.); 

–  at  country  level:  integration  of  aid  for  reforms  identified  by  reviews  into  existing 
cooperation  instruments  (especially  national  indicative  programmes).  The  national 
component of the specific aid for the APRM is aimed solely at supporting and facilitating 
the  process  in  the  countries  (involvement  of  civil  society,  consultation  and  monitoring 
machinery); it is provided only if the country concerned requests it.  

The  Community  contribution  to  the  APRM  should  come  from  intra-ACP  resources  and  be 
supplemented  by  contributions  from  Member  States. The EU  should be ready to respond to 
requests  for  financing  and  cover  part  of  the  APRM’s  budget,  thereby  demonstrating  firm 
political support for the process (and respect for the principle of ownership). The Community 
contribution  should  be  aimed  at  covering  the  review  process  at  the  three  levels  cited  above 
(regardless of support for reform in the countries via their national indicative programmes). 

For  non-ACP  African  countries,  the  Community  approach  is  part  of  the  Neighbourhood 
Policy (see section 3 below).  

2.4. 

From Community to European level 

The  importance  attached  to  governance  in  the  EU’s  development  cooperation  policy  should 
translate into (1) a harmonised political approach at EU level and (2) additional coordinated 
support  for  partner  countries'  reform  efforts,  according  to  the  results  obtained  and  the 
credibility of commitments for the future.  

In line with the above principle of harmonisation, the implementation of this approach cannot 
be left entirely to the Commission. There is a need to pursue EU-level implementation, which 
presupposes  joint  analysis  and  dialogue  in  the  partner  countries,  and  to  work  within  a 
common programming framework. This harmonisation effort is obviously not confined to the 
EU: it must involve all donors and international organisations present in a given country. 

Thus, at EU level the governance profile should be drawn up jointly and, in countries where 
joint  programming  is  planned,  serve  as  a  basis  for  the  joint  analysis  of  governance  issues. 
Where  possible,  Member  States  could  also  use  the  profile  in  bilateral  relations  with  ACP 
countries. 

In  terms  of  financial  support,  the  EU  should  collectively  increase  its  aid  for  governance 
reform  processes.  There  are  a  number  of  conceivable  options,  and  these  options  are  not 
necessarily mutually exclusive: 

(a) an increase of bilateral programmes, i.e. of countries’ allocations, in coordination between 
the Commission and the Member States (joint analysis, shared criteria). 

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Furthermore, cofinancing and/or multidonor trust funds should be developed to channel these 
additional resources to back programmes in support of reforms.  

(b) extra funding (from the increase in official development assistance) that would be added 
to the NIPs and disbursed within the framework of the NIPs managed by the Commission. 

Whichever  option  is  chosen,  these  increases  would  be  decided  both  when  fixing  countries’ 
allocations and at the time of annual or mid-term reviews. 

At  regional  and  continental  level  the  EU  should  consider  contributing  to  trust  funds  to 
facilitate  a  coordinated  approach  to  governance  mechanisms  and  initiatives,  especially  the 
APRM described above. 

3. 

DIALOGUE  AND  PROGRAMMES  RELATING  TO  COOPERATION  WITH  THE  OTHER 
COUNTRIES AND REGIONS 

Governance is also a priority in EU relations with other regions, in political dialogue and in 
aid programming. Approaches to promoting democratic governance may vary from region to 
region and country to country, depending on their specific characteristics and the history of 
their  relations  with  the  EU,  but  all  are  holistic  and  take  account  of  governance’s  various 
dimensions. This is borne out by the European Neighbourhood Policy and relations with Latin 
America and Asia, the specific features of which are described below.  

For  political  dialogue,  for  instance,  a  number  of  structures  permit  a  privileged  dialogue  on 
human  rights20.  The  use  of  incentive  instruments  has  already  been  piloted  with  the 
Mediterranean partners, including the non-ACP African countries. The Neighbourhood Policy 
has been specially designed as an integrated set of incentive instruments aimed at promoting 
reform and progressively increasing the scope of cooperation. As regards financial assistance 
for the next financial perspective, aid programming is already well under way for the Asian 
and Latin American countries and for the countries concerned by the Neighbourhood Policy. 
Programming is based on an in-depth analysis of a country’s situation, addressing, inter alia, 
political, economic and  social issues.  Though  aid is  not earmarked for governance from the 
outset,  democratic  governance  is,  depending  on  the  country  concerned,  a  focal  or  non-focal 
sector. The concept of governance as the sound management of public affairs is, moreover, a 
cross-cutting concern that determines the approach to cooperation in all sectors.  

Cooperation between the Commission and the Member States is manifested in various ways, 
not  just  in  formal  political  dialogues  but  also  in,  for  instance,  EU  election  observation 
missions.  Coordination  takes  place  during  the  programming  process  and  continues  in  the 
identification  stage  of  the  project  cycle,  especially  with  regard  to  reforms  of  the  security 
sector or the judiciary, which are the prerogative of the state. There are also the coordination 
and  harmonisation  arrangements  between  donors  that  accompany  any  budget  support 
programme. 

3.1. 

Governance and the European Neighbourhood Policy (ENP) 

The privileged relationship with the EU’s neighbours (covered by the ENP) builds on mutual 
commitment  to  common  values,  principally  within  the  fields  of  the  rule  of  law,  good 

20 

See footnote 8. 

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governance,  respect  for  human  rights,  including  minority  rights,  and  fundamental  labour 
standards,  the  promotion  of  good  neighbourly  relations,  and  the  principles  of  the  market 
economy and sustainable development. The degree of ambition of the EU's relationships with 
its neighbours will take into account the extent to which these values are indeed shared. One 
prerequisite is, for instance, that an association or partnership agreement should be in force. 

The  partner  countries’  priorities  will  be  reflected  by  jointly  adopted  action  plans. 
Governance in the broad sense is central to these action plans, which comprise seven chapters 
and focus on: 

•  strengthening  democratic  practices,  respect  for  human  rights  and  the  rule  of  law,  and 

tackling corruption; 

•  establishing  sound  economic  management  based  on  market-economy  principles  and 
transparency, and active policies aimed at promoting sustainable development, including 
action against poverty and inequality and dialogue on employment and social policy;  

•  introducing  reforms  in  the  area  of  trade,  the  internal  market  and  regulation,  including 
reforms  in  the  area  of  competition  policy,  intellectual  property,  public  procurement  nd 
action against customs fraud; 

•  cooperation  in  fiscal,  judicial,  police  and  border-management  matters  aimed  at  tackling 

fraud and tax evasion, money laundering, and terrorism;  

•  cooperation  in  the  management  of  migratory  flows,  illegal  migration  and  fight  against 

trafficking of human beings; 

•  introducing sectoral reforms (transport, energy, information society, environment, etc.) in 
order to improve management and encourage the authorities to account for their decisions 
to those they administer; 

•  developing contacts between communities, developing human resources and strengthening 

civil society. 

Action plans, which offer a policy frame of reference for bilateral cooperation by the Member 
States and other donors, are already being implemented with seven countries covered by the 
ENP; another five are in the process of being adopted. Their implementation is backed up by 
regular monitoring of the progress made in the various areas of governance. Dialogue with 
the  partner  country  is  conducted  via  sectoral  subcommittees  (democracy  and  human  rights, 
judicial  system,  economic  and  trade  issues,  etc.),  and  progress  is  gauged  at  meetings  of  the 
association or partnership committees. Note that progress is measured against the objectives 
laid down in the action plans, not against international indices. 

The  priority  areas  for  EC  financial  assistance  identified  in  a  country’s  strategy  paper  are 
chosen on the basis of the action plans with a view to supporting improvements in governance 
in  the  broad  sense:  strengthening  democratic  practices,  respect  for  human  rights,  tackling 
corruption, improving economic and sectoral management, strengthening the judicial system 
and encouraging the local authorities to account for their decisions to those they administer. 

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Such cooperation mechanisms as twinning, TAIEX and SIGMA21, which were developed for 
the  purposes  of  enlargement  and  extended  to  the  ENP  countries,  are  particularly  geared  to 
governance and make it possible, inter alia, to involve the Member States in cooperation and 
to support the implementation of the action plans.  

One factor taken into account when determining the level of financial support allocated to a 
country  is  the  degree  of  commitment  and  implementation  of  reforms  figuring  in  the  partner 
country’s  action  plan.  Following  the  Commission  communication  of  May  2003  on 
reinvigorating EU actions on human rights and democratisation with Mediterranean partners, 
a MEDA Democracy Facility was introduced in 2006. The aim of the Facility, which was a 
pilot project, was to support those partners that had made the most headway with democracy 
and  human  rights.  Subsequently,  as  part  of  the  European  Neighbourhood  Policy,  the 
Commission is planning a Governance Facility to promote political and economic reforms in 
the countries covered by the ENP. The Governance Facility could take the form of additional 
financial  support  for  neighbours 
the 
implementation of action plans. The APRM will be taken into account in this context.  

that  have  made  considerable  headway  with 

3.2. 

Latin America 

Founded on a common heritage, shared values and broad agreement on the future challenges, 
the privileged relationship between the EU and Latin America naturally accords considerable 
importance to governance. This is expressed inter alia by the fundamental objectives of social 
cohesion  and  regional  integration  fixed  by  the  two  regions’  heads  of  state  at  the  2004 
Guadelajara  summit  and  the  2006  Vienna  summit.  Governance  is  intrinsic  to  each  of  these 
objectives  and  was 
the  Commission 
communication to the Council and the European Parliament22. 

the  object  of  particular  attention 

indeed 

in 

The  particularly  acute  social  inequalities  that  continue  to  affect  most  Latin  American 
countries  erode  democratic  legitimacy  and  undermine  the  economic  performance  of  these 
emerging  countries.  Without  tangible  social  progress,  the  burgeoning  disenchantment  with 
democracy in the region would bring political instability. Tackling exclusion and all forms of 
discrimination  and  involving  all  stakeholders  in  the  process  should  therefore  consolidate 
democracy  and  governance.  In  pursuit  of  this  objective,  the  Commission  hopes  to  go  on 
mainstreaming the objective of social cohesion in operations carried out in partnership with 
the Latin American countries.  

The promotion of human rights, democracy and good governance is a feature of the different 
political  dialogues  initiated  between  the  EU  and  Latin  America,  be  it  under  the  association 
agreements  with  Mexico  and  Chile,  the  political  dialogue  and  cooperation  agreements  with 
Central America and the Andean Community or the cooperation agreement with Mercosur.  

In a similar vein, the EU strives to help democratic institutions take root and gain credibility 
by sending election observation missions as and when necessary (Nicaragua, Mexico, Bolivia, 
Venezuela, etc.). 

21 

22 

See http://ec.europa.eu/comm/enlargement/institution_building/twinning_en.htm; http://taiex.cec.eu.int; 
http://www.sigmaweb.org  
“A  stronger  partnership  between  the  European  Union  and  Latin  America”  -  COM(2005)  636, 
8.12.2005. 

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For  cooperation  with  Latin  America,  the  Commission  plans  to  pursue  a  policy  of  active 
support  for  governance  in  most  countries,  contributing  support  for  the  modernisation  of 
government  in  areas  such  as:  the  representation  of  all  members  of  society  in  politics, 
cooperation  with  civil  society,  the  promotion  of  dialogue  between  social  partners,  access  to 
justice,  strengthening  the  judiciary,  capacity  building  in  the  security  sector,  promoting  the 
security  sector’s  adherence  to  the  rule  of  law,  decentralisation  and  good  governance,  the 
responsible  management  of  natural  resources,  tackling  corruption  and  anti-impunity 
initiatives. Sectoral budget support programmes, which are the preferred option in a number 
of  countries  in  the  region,  are  also  conducive  to  good  governance  (requiring  reliable  public 
spending,  the  strengthening  of  tax  administrations  and  the  implementation  of  long-term 
government policies).  

The approach to governance obviously varies from country to country: it is a central issue in 
relations with  Colombia and most  of  the  Central American countries, which are structurally 
fragile,  have  highly  unequal  societies  and  are  in  many  instances  emerging  from  long  civil 
conflicts. In these conditions, strengthening the rule of law, internal structures for dialogue or 
reconciliation  and  promoting  participatory  democracy  are  crucial  areas  of  cooperation. 
Conversely, in stronger states like Mexico and Brazil support for governance is increasingly 
taking the form of a comprehensive dialogue and partnership in a number of sectors of mutual 
interest, including government reform.  

Since  it  involves  establishing  and  complying  with  common  rules  and  international  legal 
frameworks, regional integration is also a powerful vector for good governance (especially 
in economic and trade matters) and therefore a major  strand in the  European Commission’s 
policy towards Latin America.  

3.3. 

Governance in Asia 

With  over  half  the  world’s  population,  over  two  thirds  of  them  poor,  Asia’s  great  political, 
economic,  social  and  cultural  diversity  is  reflected  in  the  highly  disparate  nature  of  its 
countries’ relations with the EU. The policy framework for EU cooperation with Asia reflects 
an  overall  commitment  to  supporting  democracy,  good  governance  and  human  rights.  A 
battery  of  instruments  are  employed  in  pursuit  of  these  objectives.  They  include  political 
dialogue and other initiatives used to address human rights: all agreements with non-member 
countries include clauses on human rights. In some countries working parties on governance 
and human rights have been set up in the joint committees to ensure genuine political dialogue 
and cooperation on these issues. Dialogue is the foundation of relations with China and India, 
the  world's  most  highly  populated  countries.  Besides  the  structured  political  dialogue, 
relations  with  China  take  the  form  of  more  than  twenty  sectoral  dialogues  concerning 
economic  governance  and  cooperation,  the  internal  market,  science  and  technology,  the 
environment,  etc.  Over  and  above  the  sectoral  policy  dialogues,  the  key  issues  in  dialogue 
with  India  are  global  governance,  multilateral  cooperation  and  peace  and  security  issues. 
“IDEAS”23  is  a  special  initiative  permitting  cooperation  with  India  as  an  emerging  donor, 
dealing with governance in its turn.  

In  Central  Asia,  regional  and  bilateral  political  dialogue  is  conducted  through  the  various 
structures introduced by those partnership and cooperation agreements that have been ratified 
or, in Turkmenistan and Tajikistan, on a more ad hoc basis through the EU representatives on 

23 

Indian Development and Economic Assistance Scheme.  

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the  spot.  In  Central  Asia,  the  dialogue  on  democratic  governance  and  human  rights  is 
bolstered by the presence of a special rapporteur for the region. The EU has also developed a 
regional-level  dialogue  with  the  countries  of  South-East  Asia:  governance  features  in 
regional-level  cooperation  with  regional  bodies  such  as  ASEAN  (“APRIS II”  –  ASEAN 
Programme  for  Regional  Integration  Support)  and  in  the  informal  dialogues  of  the  Asia-
Europe  meetings  (ASEM).  The  ASEAN  Regional  Forum  also  serves  to  promote  trilateral 
cooperation. 

When cooperation is programmed for the period 2007-2013, governance, the rule of law and 
human rights will be a focal sector for a number of countries, with adjustments to reflect their 
highly disparate needs. Cooperation with Afghanistan is a special case, distinguished by the 
scope  of  the  EU’s  commitment,  the  importance  of  the  multilateral  framework  and  the 
enormous  challenges  in  terms  of  democratic  governance  and  ownership  by  the  country. 
Democratic governance is also an essential aspect of the EC’s work in other conflicts, notably 
in Indonesia (Aceh). Governance will also be a cross-cutting issue in all cooperation activities 
in the Asian countries, ranging from China to the EU-India joint action plan. In Central Asia, 
democratic  and  economic  governance  is  a  priority  sector,  ranging  from  support  for  civil 
society to judicial reform and the management of public finances. 

Specific  projects  relating  to  governance  and  the  development  of  democratic  institutions 
reflect the great diversity of countries in the region. Examples include reforming and building 
the  capacity  of  public  bodies  (judicial,  prison,  electoral),  the  creation  of  new  democratic 
institutions (e.g. human rights commissions) and the development of local authorities. More 
direct  efforts  to  strengthen  democratic  processes,  and  in  particular  political  parties  and  the 
electoral process, are planned in a number of countries, as are measures to facilitate access to 
justice  for  vulnerable  groups,  especially  women,  children  and  minorities.  Building  the 
capacity  of  civil  society  is  a  constant  concern,  be  it  in  the  form  of  general  education  and 
information  campaigns  or  issue-based  campaigns,  against  child  labour  for  instance. 
Depending  on  the  country,  support  for  administrative  reform,  sound  management  of  public 
finances including fiscal transparency and sound management of natural resources, and social 
security reform are planned, as are specific measures to tackle corruption.  

As  in  other  regions,  the  trend  towards  global  and  sectoral  budget  support  programmes  is 
becoming  a  means  of  strengthening  governance  and  institutions  at  both  central  and 
decentralised levels in Asia, including the Central Asian countries. These programmes call for 
the prior establishment of an appropriate level of democratic oversight, financial management 
and  institutional  development,  thereby  increasing  transparency  and  accountability  to 
stakeholders.  

Given  the  number  of  “difficult  partnerships”  in  the  region,  thematic  instruments  (e.g.  the 
EIDHR) that can be used without the government’s agreement continue to play a major role in 
support  for  civil-society  projects  in  support  of  democratisation  and  human  rights.  In  such 
cases  the  EU  can  also  rely  on  benchmarks  in  the  area  of  governance,  e.g.  OSCE 
commitments.  Issues  relating  to  public  management  in  such  sectors  as  water,  in  connection 
with climate change, can also provide a springboard for governance dialogue, as exemplified 
by April 2006’s EU-Central Asia conference in Almaty.  

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CONCLUSIONS 

A  concerted  approach  is  the  only  way  for  the  EU  to  make  itself  heard  in  the  international 
debate  on  governance.  The  EU  must  make  a  stand  on  this  key  issue  of  development 
cooperation, basing its position on the defence of a number of principles: 

•  While  governance  and  capacity  building  should  indeed  be  high  on  the  development 
cooperation  agenda,  poverty  reduction  and  the  other  MDGs  remain  the  overriding 
objectives  of  EU  development  policy,  as  laid  down  in  the  European  Consensus  on 
Development. Good governance, though a complementary objective, is basically a means 
towards the ends represented by these priority objectives. 

•  The EU’s approach is based on a broad definition of governance, which it perceives as a 
process  of  long-term  change,  based  on  universal  objectives  and  principles  and  common 
aspirations  that  must  inform  the  main  functions  of  government,  all  areas  of  state 
intervention and the interaction of public institutions and citizens. Democratic governance 
affirms  the  rights  of  all  citizens,  both  men  and  women,  and  cannot  therefore  be  reduced 
simply to tackling corruption.  

•  Democratic  governance  must  be  approached  holistically,  taking  account  of  all  its 
dimensions  (political,  economic,  social,  cultural,  environmental,  etc.).  The  processes  of 
democratic  governance  will  be  supported  more  effectively  by  dialogue  than  by  sanctions 
and conditions. 

•  Ownership of reforms by partner countries and a dialogue-based approach, encompassing 
capacity-building support and the prevention of state fragility, will bolster the processes of 
democratic governance and help legitimise institutions in the eyes of the citizen.  

In  order  to  increase  the  effectiveness  of  support  for  governance  and  to  promote  processes 
towards  democratic  governance  in  a  harmonised  manner,  the  Community  and  the  Member 
States must agree practices in this area: 

•  Dialogue  with  individual  partner  countries  on  governance  reforms  should  be  conducted 
jointly  by  the  Commission  and  those  Member  States  represented  on  the  ground.  This 
dialogue  should  then  be  translated  into  coherent  approaches  to  aid  programming  and 
coordinated support for governments’ reform programmes. 

•  Via its governance initiative  for the ACP countries and Africa, the EU is creating a new 
incentive  mechanism  that  will  give  partner  countries  access  to  additional  funding 
according  to  their  governance  commitments.  Some  €3 billion  will  be  reserved  for  such 
incentives.  The  EU  will  also  provide  political  and  financial  support  for  the  African  Peer 
Review Mechanism, with due regard for the African countries’ ownership of the process. 

This contribution to the design of a common EU approach to democratic governance must be 
viewed in the broader context of the EU’s external policies, the promotion of peace, security 
and  sustainable  development,  and  take  account  of  the  likely  substantial  increase  in  official 
development assistance and the desire to ensure the effectiveness of aid, which fully justify a 
deeper debate on governance in development cooperation. 

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