Routledge Dictionary of Economics, Second Edition
FOREIGN AID given on condition that the recipient purchases the exports of the donor country.
This has been called ‘devalued aid’ as the recipient may have to purchase goods higher in price and lower in quality than are available on international markets; in extreme cases the aid is supplied in physical amounts, e.g. food and medicines. However, many donor countries with their own BALANCE OF PAYMENTS problems would give little aid at all if it were not in this form.
See also: bilateral aid; multilateral aid
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