1980-2000 Untying aid and private sector development

Within the Development Assistance Committee of the Organisation for Economic Cooperation and Development (OECD/DAC) the first recommendations to untie aid to the least developed countries (LDCs) were adopted in 2001, with revisions in 2006 and 2008. The main objective was to allow LDC's that were receiving development cooperation funds to ‘get the best deal’ on projects, not restricting the purchase of goods and/or services to contributing donor countries. Along with the shift towards sector-wide approaches emphasizing ownership, untying aid made sense.

The relationship between aid and trade from the 1970's to 2014 is discussed extensively in the IOB report 'Good things happen to those who make them happen'. A Dutch Advisory Council on International Affairs report in 2013 already concluded 'that it not impossible to give Dutch business a role in aid, provided that the objectives of development cooperation prevailed'.

Untying aid is not necessarily a solution to promote bilateral trade relations, that are an important goal of private sector development initiatives supported through ODA for development related activities.

References

https://www.adviesraadinternationalevraagstukken.nl/documenten/publicaties/2013/02/01/wisselwerking-tussen-actoren-in-internationale-samenwerking

https://www.iob-evaluatie.nl/publicaties/rapporten/2014/04/01/392---iob-study-good-things-come-to-those-who-make-them-happen-return-on-aid-for-dutch-exports

https://www.iob-evaluatie.nl/resultaten/integratie-nederlandse-hulp