Long abstract

About Publications & Documents Information by Country

Aid tying by OECD donor countries has important consequences for developing countries. Tying aid to specific commodities and services, or to procurement in a specific country or region, can increase development project costs by as much as 20 to 30 per cent. Although the debate on the tying of aid has been raging for some time, this report is the first systematic study of this policy area undertaken to date. The author succinctly reviews the current literature on the tying of bilateral and multilateral aid and analyses the underlying economic and political motivations for its use, as well as its direct and indirect costs to recipients.