Mot Mindre Bundet Bistånd

Sammanfattning: Abstract Aid-tying is considered costly and ineffective to recipient countries and it is estimated that costs increases by as much as 30 per cent due to its practice. The Paris Declaration on enhanced aid effectiveness suggested an end to tied aid. The purpose of this paper is to give a review of the development of aid-tying in the European countries in the last thirty years. It will also look at some of the reasons why certain countries uses more tied aid than others. The data is collected from the OECD CRS database and the paper focuses on the fifteen European DAC members. It is concluded that the use of bilateral aid-tying has decreased markedly over the years of 1979-2007. The most significant progress has been achieved by the countries of northern Europe followed in order of importance by the central European countries and the Mediterranean countries. In an attempt to explain why the later countries have a higher degree of tied aid, it was found that it has a strong connection with the amount of total bilateral aid the country gives. A high degree of aid in relation to GDP correlates to a low degree of tied aid and vice versa. However, it is also suggested that countries with a close to zero practice of aid-tying, still have the problem of informal tying.