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International Development Act 2002

Conditionality and Tying

Can we attach conditions to assistance?

Yes, this is explicitly allowed (Section 7). But any conditions must be consistent with the purposes set out in the Act for providing development assistance (i.e. furthering sustainable development or promoting welfare) and be considered likely to contribute to the reduction of poverty (see footnote1). For example, it would be acceptable to link provision of assistance to a government’s performance in implementing its poverty reduction strategy. But a policy that linked the provision of assistance funded through the 2002 Act to, for example, a country’s willingness to accept asylum seekers whose applications had failed in the UK, would be vulnerable to legal challenge. Equally, it would not be permissible to adopt a policy of tying aid to the use of British goods and services.

Would Aid Tying be unlawful?

Yes. The primary purpose of a policy of tying UK aid to British goods and services would be to promote British exports and not to contribute to the reduction of poverty. It would therefore not be permissible under the Act. Any government that wanted to re-establish the link between aid and trade would need to return to Parliament to change the Act.

Why not explicitly prevent Aid Tying?

Two reasons. First, there is no need (see the answer above). Second, it would be impossible to do so without undesirable consequences. There is a range of legitimate commercial and political considerations in our work: for example the commercial viability of a micro-credit project or the political situation in countries where we want to work. It was found to be problematic to devise a definition of commercial and political considerations that would rule out Aid Tying without ruling out DFID’s ability to take account of these legitimate concerns.

1 Assistance to the UK Overseas Territories is not required to contribute to the reduction of poverty. Separate authority is given for humanitarian assistance, and contributions to Multilateral Development Banks and the Commonwealth Scholarship Commission, which are not subject to the requirement that they be given with the purpose of furthering sustainable development or promoting welfare and in the expectation that they are likely to contribute to poverty reduction.