Why Untie Aid? An Empirical Analysis of the Determinants of South Korea's Untied Aid from 2010 to 2013

As untying aid was widely considered key to enhancing aid effectiveness, the South Korean government decided to increase the share of untied aid. While the share increased substantially in recent years, considerable variation exists in the proportion of untied aid provided to different recipient countries. This article explores the reasons why. We identify three key variables: international factors, economic interests and recipient country governance. By analysing South Korea's aid data for the period 2010-2013, we find that Korea's aid-untying practice is affected by international norms and the recipient country's governance, but not by peer pressure and economic interests.