Untied aid has been increasing — but has it been effective?

By Anna Patricia Valerio 17 July 2015

Food aid distribution by the U.S. Agency for International Development in Ethiopia. The United States has relatively low shares of untied aid, according to an OECD report. Photo by: USAID / CC BY-NC

In 2008, the recommendation for untying aid to the least-developed countries agreed on by the Development Assistance Committee of the Organization for Economic Cooperation and Development in 2001 was amended to include heavily indebted poor countries. All DAC members except Japan agreed to extend the country coverage.

Over the years, donors have largely supported the move to loosen their grip over aid procurement — a trend that the 2008 Accra Agenda for Action, which called for the untying of aid “to the maximum extent,” and the 2011 Fourth High-Level Forum on Aid Effectiveness in Busan, South Korea, which urged donors to “accelerate efforts to untie aid,” might have spurred.

According to a 2014 DAC review based on 2012 aid untying figures, 91 percent of aid covered by the recommendation was untied.

“Not only has untying held up very well since the crisis, this picture also shows that DAC members, on average, have not felt a need to resort to more tied aid to ‘protect’ aid budgets,” the report said.

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About the author

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Anna Patricia Valerio

Anna Patricia Valerio is a Manila-based development analyst focusing on writing innovative, in-the-know content for senior executives in the international development community. Before joining Devex, Patricia wrote and edited business, technology and health stories for BusinessWorld, a Manila-based business newspaper.

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