EU Development Policy and the Promotion of the Financial Sector

Abstract

This paper assesses the Aid policy of the European Union. It highlights how this EU Aid provision has been intertwined with the process of fictionalization in two main ways. Firstly, a non-negligible proportion of Aid flows are linked to the promotion of private sector, for-profit activities, which very often include the development of the financial sector in developing countries. Secondly, the provision of Aid itself has become closely linked to the financial sector through the process of “blending”, which effectively increases the Aid budget by means of leveraging. These two aspects highlight how even cooperation policies with developing nations cannot be considered immune to the process of fictionalization.