Tying foreign aid to the purchase of goods and services in the donor country increases the value of that aid by creating economies of scale.

Question

Quizplus · Accepted Answer

Tying foreign aid to the purchase of goods and services from the donor country often leads to inefficiencies and higher costs, as recipient countries are forced to buy potentially more expensive or less suitable goods and services than those available on the open market. This practice can reduce the overall effectiveness and value of the aid provided.

Tying Foreign Aid to the Purchase of Goods and Services