External relations policies, including development co-operation, have been evolving rapidly in the 1990s as the European Community (EC) took on greater responsibilities. Following intense political debate about accountability, in 2001 the EC made major improvements to its development policy and embarked on far-reaching management reforms to improve the efficiency and effectiveness of its aid programme to reduce poverty. This Peer Review assesses the situation after one year of the process expected to last until 2004.