Question

Differentiate between tied aid and untied aid. Support your answer by giving one example for each.

Answer 1

Basis	Tied Aid	Untied aid
Authority	Donor country decides how the aid should be utilized.	Recipient country decides how the aid should be utilized.
Impact	Minimises corruption on both sides.	Can lead to corruption in the recipient country.
Accountability	Both countries are accountable for proper utilization of aid.	There is no accountability on either side.
Awareness of the needs	Awareness on the part of the donor country about the developmental needs of the recipient country.	Donor country may not be aware of the developmental needs of the country receiving the aid.