What explains the emergence of intergovernmental organizations (IGOs) as recipients of foreign aid? I argue that foreign aid provision to IGOs is a significant development in the foreign policy of the European Union and explain this phenomenon by modifying the traditional donor interest versus recipient need framework for understanding aid allocations, where aid giving to IGOs, rather than states, is a new tool of aid allocation for the purpose of recipient need rather than the pursuit of donor interests. Using original data on European Commission foreign aid allocations to PTAs from 1995-2013, I test the argument that EU aid allocations are primarily determined by economic and trade development considerations and present three key propositions, where a) foreign aid allocations from the EU will be larger when aid is allocated to PTAs with greater economic and trade development need; b) aid allocations from the EU are not driven primarily by donor interest considerations; and c) aid allocations from the EU will be greater when allocated to PTAs with a high degree of institutional independence from member states, indicating a depoliticized aid environment. Using quantitative analysis, I find considerable support for these propositions and supplement the statistical findings with qualitative case research based upon elite-level interviews of European Commission officials. I show that indeed, when the European Union provides aid to PTAs, they give aid predominantly to more needy, independent PTAs, not to further their own interests as an aid donor.
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