Based on the existing literature and on rhetorical premises of the EU and the OECD, this study hypothesized that foreign aid has a positive effect on recipients' levels of good governance, democracy, and respect for human rights. I include other relevant variables in the model and conduct cross-sectional times-series analyses on the three concepts on data over the last two decades. The findings illustrates that EU foreign assistance to Third World nations does in fact have a positive effect on the latter's level of good governance, democracy, and respect for human rights. This prompts more research in this field as well as comparative analyses between different donors in order to identify the effects of aid from major donors on recipients' polities.