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.
Read more about Tied Aid: Definition, Motivations For Tying Aid, Costs To The Recipients of Aid, The Problems of Untying Aid, Examples, See Also
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