Since its creation in 1961, the OECD Development Assistance Committee (DAC) has discussed ways to improve the effectiveness of its Members’ aid efforts.  One major issue has been whether aid should be freely available to buy goods and services from all countries (that is, “untied aid”), or whether aid should be restricted to the procurement of goods and services from the donor country (that is “tied aid”).

Over the years, the issue has been discussed in the DAC, culminating in agreement by Development Co-operation Ministers and Heads of Aid Agencies on a Recommendation to untie official development assistance to the least developed countries at the DAC High Level Meeting in April 2001.

The objectives of the Recommendation are to:

The Recommendation also recognises that reinforcing partner country responsibility for procurement and the ability of the private sector to compete for aid funded contracts are required in order for the Recommendation to deliver its full benefits.