Inter-nation Policy Co-ordination and the Untying of Aid

This volume argues on economic grounds for an internationally-coordinated move toward EC- or even OECD-untying. It presents empirical evidence which questions whether aid-tying produced significant macroeconomic benefits in the donor economies. The book recalls both the costs for the donor's national budget as well as the tying costs for the recipients. It argues that the "rent" which aid-tying has created within the protected business community is seldom transferred to the recipients. Finally, the text claims that the link between aid-tying and the domestic constituency for aid is weak. This economic analysis is placed against the background of recent policy discussions and decision-making on the issue, both in an EC- and OECD-framework, and focuses especially on the Helsinki Package operating since 1992.