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Tied aid
Tied aid is foreign aid that must be spent in the country providing the aid (the donor country) or in a group of selected countries. A developed country will provide a bilateral loan or grant to a developing country, but mandate that the money be spent on goods or services produced in the selected country. From this it follows that untied aid has no geographical limitations. In 2006 the Organisation for Economic Co-operation and Development (OECD) estimated that 41.7 percent of Official Development Assistance is untied.〔OECD. (2006). ''2005 Development Co-operation Report''. Volume 7, No. 1. Paris: OECD. ISBN 92-64-03651-2 Available for download: (OECD Journal on Development, Development Co-operation Report 2005 )〕 ==Definition== The full definition of ''tied aid'' as defined by OECD〔"Tied Aid Credits", (OECD Glossary of Statistical Terms )〕 is:
Tied aid credits are official or officially supported Loans, credits or Associated Financing packages where procurement of the goods or services involved is limited to the donor country or to a group of countries which does not include substantially all developing countries (or Central and Eastern European Countries (CEECs)/New Independent States (NIS) in transition).
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