European Aid vs. European Integration : A Quantitative Analysis of 42 Non-Members

The objective of this paper is to connect the literature on the aid allocation to the research on European integration of non-members. The main idea of the paper is that the EU aid is an instrument promoting the strategic interests of its members. On the one hand, the assistance furthers development of the potential EU member states. On the other hand, it secures the EU control over the countries which are not granted the membership perspectives. I argue that the mutual effect of the recipient's income and democracy level plays the crucial role in the allocation of the EU aid. Additionally, non-member countries with larger aid shares are more likely to conclude the integration treaties with the EU. To assess the theoretical argument, I provide a series of statistical tests which analyse the allocation of the EU aid and its effect on the different types of the integration treaties between the EU and 42 non-members in years from 1990 to 2010. I explicitly investigate the mutual effect of the income and democracy in a multiplicative interaction model. The models for the panel data, the models for the ordinal outcomes and the duration models account for the specifics of the variables in the data set. Empirical tests support my argument. The EU is likely to give more aid to the relatively rich and democratic prospective members as well as to the low income and less democratic non-members with the absent mid-term membership perspectives