The Practice of Tying Development Aid: A Critical Appraisal from an International, WTO and EU Law Perspective

Tied aid consists in tying development aid to the purchase of products from the donor country. Under a tied aid regime a developed country grants funds to a developing partner country on condition that the donation is spent by the latter through procurement procedures in which only companies established in former are able to tender. Is such practice compatible with the “right” to development as currently defined in international law? Moreover, what are the implications of tied aid on the principles of free trade and competition as affirmed in WTO and EU law? Leaving aside the ongoing debate on aid effectiveness and the harmonization of donors’ practices, this study attempts to provide plausible answers to these not extensively researched legal questions.