Chatham House has published a new research paper (The ‘myth’ of a Palestinian economy by Sami Abdel-Shafi) on the EU’s donor policies (based on the Oslo Peace Process). The core objective of the paper was worded as “to persuade the European Union (EU) to shift its policy from supporting the current framework of Palestinian economic development, which in effect subordinates the economy to a political process that has become stalled and dysfunctional. It calls for the decoupling of economic development from the peace process, irrespective of the political roadblocks – or possible future progress – in the latter.” One of its recommendation (p25) concerns “a joint review by the EU and the PA of the extent to which aid has achieved its aims seems timely. Similarly timely would be an assessment of how effective it has been for the EU to divert funds from development aid to humanitarian aid and budgetary support to the Palestinians.”

Everyone being familiar with the history of aid to Palestine knows that there are serious problems with the way how the EU supports the Palestinian statebuilding. The EU – the international donor community – has been busy with “building” a Palestinian state, the territories of which is partially occupied by Israel and controlled by the Hamas. For some more or less obvious reasons the EU has been pouring money to the Palestinian territorries (adminstration, statebuilding, security cooperation with Israel, supporting refugees, and victims of the Gaza wars). From an academic perspective the exciting question is why policy-paper writers, activists, scholars, researchers constantly feel compelled to write papers on the EU’s incompetence and urge it to change its policies? The EU – let it mean anyone – knows well the situation, each and every fact created on the ground; the EU has closely monitored and documented the “developments” since the early 1990s. Various European bodies and authorities published exhaustive “self-reflective” reports and papers throughout the years (see for example the evaluations prepared by the European Court of Auditors), to mention only the most recent one prepared to the EC:

Evaluation of the European Union’s Cooperation with the occupied Palestinian territory and support to the Palestinian people 2008 – 2013, Vol I (main report) + Vol II (Annex). Evaluation carried out on behalf of the European Commission, May 2014

This paper sincerely and explicitly concedes that “notwithstanding ardent declaratory policies, massive financial support, dialogue and deployment of other instruments, EU Cooperation had little demonstrable impact on the main obstacles to achieving the Two-State solution. The Evaluation collected abundant evidence that the goals of the EU have been seriously hampered by “binding constraints,” the most significant being the Israeli restrictions in relation to occupation and allocation of resources for settlements, but also including Palestinian political divisions and an absence of democratic process. While these binding constraints have been highlighted in EU statements, the evaluation findings indicate that the EU has been neither willing nor able to address these constraints squarely, with an effective political response” (Vol I. page VIII).

The EU knows everything. The Palestinians – Israel alike – know that it knows everything.


… this is how Adam Taylor started his article published in The Washington Post in early October. The article is an entertaining attempt to summarize the complexity of relations in the Middle East by collecting all those images, charts and graphs that have been drawn during the past years to explain the relations among various actors. One of the first such attempt was published in the Financial Times last year (22 August 2013):

A Short Guide to the Middle East (from Mr K N Al-Sabah)


This and the remaining eight attempts illustrates well why it is senseless to raise questions about the impacts or efficiency of foreign aid. The ‘civil society’, NGOs or the population in general are not part of the game. Not even in the graphic-drawing minds.

Jihadist friends and foes; The Economist, 15 September 2014

Jihadist friends and foes; The Economist, 15 September 2014

Source: Adam Taylor (2014) ‘9 attempts to explain the crazy complexity of the Middle East’, The Washington Post, 1 October, available at


Donors: keep out writes The Economist and then continues: Egypt and Hungary are just two fronts in an escalating war waged by authoritarian governments against groups promoting the Western vision of liberal democracy as not just regular elections but public, pluralistic debate. Recent years have seen a big rise in “philanthropic protectionism”, says Douglas Rutzen of the International Centre for Non-Profit Law (ICNL), which tracks how governments treat NGOs. Some, like Hungary, harass foreign-funded NGOs using existing tools, such as heavy-handed investigations. Others are writing new laws that serve the same purpose.

What is common in Azerbaijan, Mexico, Pakistan, Russia, Sudan, Venezuela, Bangladesh, Malaysia, Nigeria, Egypt and Hungary for that matter and to mention only a few? Members of the political leadership and the elite are simply unable to apply for and get a normal job on the market, except for the political marketplace. Their profession is being in power. Some of them probably have sincere worries for their own people, but the majority has to take care too much neither with their people’s will, nor with the borders of their playgrounds. As long as the nation state and national sovereignty is considered sacred by the international community, as long as the Western powers are not willing to risk their own citizens’ lives in real wars to protect political, social, religious, economic, etc, rights in the listed (and non-listed) countries, too much will not happen. Budgetary aid (grants, loans) and sanctions against governments are part of the game: these can ensure a balance between stability and instability in international relations. But will never lead to democratic changes within a society, unless, those in power can be convinced that they can have a much happier life outside the government, parliament, judiciary. Niebuhr’s famous thought (man’s capacity for justice makes democracy possible, but man’s inclination to injustice makes democracy necessary, 1944) probably misses one point: the gradual development of (Western) democracy was not externally forced upon the governing elites; sharing power was their enlightened self-interest, it was a sort of means guaranteeing the survival of the state in the 19th and 20th centuries. If ‘someone’ has a state(like entity) today guaranteed by international legal norms and principles, and supported by foreign grants, it will not be so much interested in voluntarily providing democratic rights to those that want to have his seat.

The Economist, Foreign funding of NGOs: Donors: keep out | The Economist, 13 September, 2014. // // // //

Interactions between foreign aid flows, sources of legitimacy and components of regime stability are not widely researched, even if there is a thematically related, ongoing research programme (Legitimacy and Efficiency of Political Systems) at GIGA, the German Institute of Global and Area Studies, see:

The listed concepts have been interlocked, especially in the Middle East, by a fourth one, namely, democracy.Global democracy building has become the main focus of foreign aid from OECD countries and international organizations for the past two decades. However, Western donors have also had competing political objectives in the MENA (stability), even if aid could have played a meaningful role in building democracy in this region too. The question why and how these countries have resisted democratic changes, emerged more than twenty years ago, after the ‘end of history’. While there is a tradition that emphasizes the exceptionality of the region not fitting into the framework of any general theory, others doubt any exclusiveness as being a real explanatory variable. Accepting the notion that even MENA can be studied by lenses of social sciences, various factors arise to explain the ‘stability of authoritarianism’ as well as the lack of real liberalization and democratization. Salamey and Pearson suggest that a combination of various factors – international interests in ‘stability’ over democracy coupled with local authoritarian manipulation of colonial legacies, along with ethno-religious interests – played a decisive role. Those referring to cultural reasons focus on traditions and perceived incompatibility of Islam and democracy. Others formulating their views more cautiously emphasize: there is nothing in Islam that would contradict democracy at most its interpretations or applications are contrary to democratic development. Yet others emphasize the lack of modern institutions and strong civil society, point either to the significance of traditional family ties, or to the importance of military establishments as factors being responsible for preventing structural-institutional reforms in the Middle East. Authors concerned with economic structures and political economy are convinced that oil revenues, rents and the lack of domestic taxes explain the inadequate democratization. Even the un(re)solved status of the Israeli-Palestinian conflict, and to some extent the very being of Israel has been cited as being the main source of oppression in the region and the main barrier of effective democratization.

Sources and recommended reading: Carl Brown, International Politics; Rex Brynen et al, eds Political liberalization and democratization in the Arab world. Vol. I-II. (Boulder, Colo.: L. Rienner, 1998); Halliday, The Middle East; Raymond A. Hinnebusch and Anoushiravan Ehteshami, The Foreign Policies of Middle East States (London: Lynne Rienner, 2002);Larry J. Diamond et al, eds Islam and Democracy in the Middle East. (Baltimore, MD: John Hopkins Univ. Press; 2003); Shireen Hunter et al, eds. Modernization, Democracy and Islam (London: Praeger, 2005); J. Lebovic and W. Thomson, ‘An Illusionary or Elusive Relationship? The Arab-Israel Conflict and Repression in the Middle East’ Journal of Politics 68, no. 3 (2006): 502-518; Bernard Lewis, Faith and power: religion and politics in the Middle East. (New York, NY: Oxford University Press, 2010); Giacomo Luciani, ‘Oil and Political Economy in the International Relations of the Middle East’ in Louise Fawcett (ed): International Relations of the Middle East (Oxford: Oxford University Press, 2005/2013); T. Niblock, T and P. Wilson, eds, The Political Economy of the Middle East. Vol 1-6.(Northampton, MA: E. Elgar, 1999); Ghassan Salamé, ed, Democracy without democrats? The renewal of politics in the Muslim world. (London: I. B. Tauris, 1994); Mark Tessler et al, eds, Area studies and social science:strategies for understanding Middle East politics. (Indiana University Press, 1999); Michael C. Hudson, Arab Politics:The Search for Legitimacy(Yale University, 1977); Khalid Abou El-Fadl, ‘Islam and the Challenge of Democratic Commitment’, Fordham International Law Journal 23, no. 1 (2003): 7.; Imam Salamey and F. Pearson F, ‘The collapse of Middle Eastern Authoritarianism: Breaking the Barriers of Fear and Power’ Third World Quarterly 33, no. 5. (2012): 931-948, p. 932.


Analyzing the effects of ‘unearned foreign income’ by econometric means (sample of 97 countries between 1975 and 2004), Ahmed (2012) concludes that foreign aid and remittances led to policies that resulted in reducing government expenditures on welfare goods in order to fund patronage. Unearned foreign income is defined as “income generated from outside a country’s border than can change (either directly or indirectly) a government’s revenue base”, foreign aid is “understood as a transfer of funds from the donor government to the recipient government”, whereas remittances represent a “transfer of funds from individuals abroad to individuals (households) in the home country” (Ahmed 2012: 146). Project aid, more specifically, development and humanitarian assistance which is channeled from foreign government to non-governmental or civil society organizations (NGO, CSO) is not part of the model. However, taking into consideration such aid is mostly spent either on consumption of goods or on providing ‘public’ services (health care, education, etc), one can assume an effect similar to that of the remittances. The mechanism established by Ahmed (2012) argues for a combined effect: a fraction of foreign aid finances patronage directly (income effect), whereas the remittances (income from foreign-financed NGOs, service provided by foreign-funded organizations) permit the government to divert expenditures from the provision of welfare goods to patronage (substitution effect) due to the fungibility of money (Ahmed 2012).

Accepting the argument that ‘unearned foreign income’ can prolong regime survival by mitigating revolutionary demands, it is worthwhile to explore the role foreign aid can play in maintaining stability or promoting change in the context of legitimacy. To formulate it more clearly: if ‘unearned foreign income’ can contribute to preserving the status quo, namely to the stability of authoritarian regimes and it is explained by the combined effects of aid and remittance inflows, how can we explain the Arab Spring, the sudden outbreak of public discontent, aspirations for democratic change and decreasing legitimacy of autocratic regimes? How are foreign aid disbursements related to legitimacy? How can they contribute to relative stability (Israel), modest demonstrations against the regime (Jordan, Lebanon, Palestine), ‘revolution’ and military coup (Egypt)? The next posts will try to explore these issues.


Faisal Z. Ahmed, ‘The Perils of Unearned Foreign Income. Aid, Remittances and Government Survical’. American Political Science Review 106, no. 1. (2012): 146-165.


Social scientists being familiar with the Middle East and IR tend to agree with recipients’ views quoted in the last post. Most researchers are equally critical towards the EU (West in general) probably because it is very easy to recognize the gaps between rhetoric and practice. Rosemary Hollis argues that the ‘Arab revolts has actually demonstrated the failure of EU policies’ the extent to which, ‘EU has favoured regimes and practices that ultimately proved intolerable to a broad stratum of Arab society’ (Hollis 2012: 81). Evaluating US and EU ‘democracy promotion’ in the Middle East Rex Brynen and his co-authors agree that ‘by polishing some of the “rough edges” of authoritarism, they might have even contributed to its persistence (Brynen et al 2012: 274). Riccardo Alcaro writes in the Introduction of Rethinking Western Policies in Light of the Arab Spring that ‘United States and Europe have for decades shown acquiescence towards, and often actively supported, Arab authoritarian regimes in return for Western-friendly policies.’ In his evaluation Western response to the Arab Spring would ‘make a perfect case study for those interested in the conflict between perceived interests and values’ (Alcaro 2012: 13). Indeed, authoritarian regimes have likely been supported – irrespective of the events taking place under the umbrella of the ‘Arab Spring’ – to serve security interests: they were seen as guarantees of stability, but to some extent, even potential facilitators of peaceful transition to democracy. In Ahmed Driss’ view ‘the European Union favoured stability … over the requirements of democratization and (uncertain) political changes’ before the Arab Spring (Driss 2012: 100). However, even the ‘new’  EU ‘approach’ (see an earlier post on its main elements) reminds to an old wine in new bottle as formulated by Natalie Tocci and Silvia Colombo (Colombo and Tocci 2012: 96). To sum up these interpretations, the West in general and the EU in particular seems to be taken hostage by itself, at least the extent to which it is unable to bridge the gap between its extraterritorial (and domestic?) interests and internal (or universal?) values.

Causes and consequences of the ‘Arab Spring’ have received considerable attention in Europe since winter of 2010/2011. While concerns about the stability of regimes go back many decades, fears about the decreasing legitimacy of long-supported allies and subsequent instability in the Middle East and North Africa (MENA) appears to be at higher level now than before. The research project embraces the issue how relations between the Middle East and the West (with particular emphasis on the EU) have been changing in a broad sense and more narrowly in the Israeli-Palestinian conflict. The project contends that an important component of these relations has been the trade-off between the foreign support channeled in the form of aid to governments in the Middle East and benefits (regional stability, regime stability) ensured for such support. However, this trade-off has been challenged by the ‘Arab Spring’. Despite the billions of foreign aid channeled to simultaneously maintain stability and promote peaceful democratic transition, the internal legitimacy of supported regimes as well as regional stability weakened all of a sudden during the winter of 2010/2011.

The ‘Arab Spring’ may be seen as an unintended consequence of Western aid policies, because those policies have contributed to breaking down legitimacy and stability in two, mutually reinforcing ways: (i) for decades foreign aid policies bolstered weak regimes that could not have survived on their own; (ii) while at the same time by putting emphasis on democratic ideals and models they have educated societies on the necessity of change the status quo. Considering the case of Egypt (an ‘aid darling’ experiencing ‘revolution’), the case of Syria (an ‘aid orphan’ experiencing unrest and oppression), those of the Palestinian National Authority (PNA) and Jordan (‘aid darlings’ exhibiting relative stability so far) combined with the specific case of Israel (a country which is neither entitled for, nor in need of development aid, but receiving billions of US military aid), the research seeks to answer the question how foreign support relates to domestic social-political phenomena (economic development, social conflict, power relations, legitimacy, political (in)stability) and how relations between the region and the EU have been changing in light of the recent events.