This study sets out to assess the thrust, direction and scope of the current reform of European Community (EC) aid policies, strategies and structures, as it pertains to the efforts of the EC to encourage democracy, strengthen good governance and prevent violent conflict in developing countries. It explores the difficult combination of democracy assistance and governance conditionality to prevent democratic decay in developing countries. It argues that recent reforms have a technocratic bias, as they tend to focus on improving the administrative and managerial dimensions of European foreign aid. Less attention is paid to enhancing its political thrust and devising effective operational strategies. The study assesses the conceptual foundations of the EC's new policies for electoral assistance and conflict prevention and underlines their inadequacy to address the contemporary challenges of democratic governance. The strategic challenges of European foreign aid reside not only in designing efficacious strategies to consolidate democracy and strengthen governance in developing countries, but also in devising the right mix of positive and negative measures to respond to democratic decay and crises of governance. The article concludes with a series of proposals for enhancing the European Commission's ability to manage democracy assistance programmes and governance conditionality.
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