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With six months left before the deadline, the European Union (EU) is still negotiating both its multi-annual budget for 2014-2020 and the successor to the 10th European Development Fund (EDF), i.e. the 11th EDF for 2014-2020.

The European Commission (EC) has indicated that it intends to further strengthen the focus of the EDF on the poorest countries. It has, however, revealed few details of how it intends to do this.

This background paper explores the possible approaches that the EC could take to determine 11th EDF aid allocations; their respective implications for the future of development cooperation with the African, Caribbean and Pacific group; and the changing levels of development assistance to high-income and upper-middle-income countries, more commonly referred to as differentiation.

The new EDF aid allocation model is likely to be based on a number of criteria, which meet both traditional and recent EU policy trends and requirements. The technical process of constructing the model, however, offers a variety of methodological tools and options for adjustments and modifications, which leaves considerable leeway for particular allocation outcomes to be achieved. Any scientific, objective model may therefore still accommodate subjective judgments and political interests.