Foreign aid has increasingly been subject to political conditionality. In the 1980s, the Bretton Woods institutions and major Western governments made aid dependent on reforms of the economic policy of recipient countries. The main objective of this first generation conditionality was to bring balance in their internal and external economy. Market liberalisation was the primary instrument, if not an objective in its own right. In the 1990s, first generation conditionality, characterised by its structural adjustment programmes, was brought one step further. With the old bipolar world system breaking down, political conditionality of a different brand came out in the open. This second generation conditionality linked aid to political reforms which even involved the governing system at the recipient side: democracy, human rights and 'good governance'. This volume aims at taking stock of these developments. The volume emerges from a research project carried out within the framework of the Working Group on Aid Policy and Performance of the European Association of Development Research and Training Institutes (EADI). It will be of considerable interest to researchers and university teachers in the field of development studies, and of particular interest to politicians and administrators at all levels concerned with development assistance, in providing an overview of the state of the art of the most topical aid policy issue of the 1990s.