to place a lower weight on development objectives, relative to other donors, and a higher weight on “private” objectives related to commercial interests.

Descriptive statistics for these variables are provided in table 1 for the main sample of 1959 observations for the year 2007. Standard errors were adjusted for donor clustering of observations. Note that all observations where the donor is a multilateral aid agency are excluded from the sample, because they exhibit no variation in the dependent variable. All but the EC have no tied aid, and all of its aid is classified as partially tied<sup>6</sup> . Several small non-DAC donors are also dropped from the analysis, because they do not report aid tying status. The sample of donors thus includes 22 DAC members (all but the EC). All recipients of aid in the OECD’s Creditor Reporting System (CRS) are included, with the exception of a small number of countries that were already classified as high income by the World Bank.

Although our aid share measure varies across donors within each recipient, the number of donors does not. We therefore test the model’s prediction that more donors will be associated with higher tied aid using a cross section of 133 recipient countries for 2007. Specifically, we estimate the following equation: where _σi_ represents the share of aid recipient _i_ receives that is tied, _Ni_ is the number of donors present in recipient country _i_ , _LDCi_ is a dummy indicating whether the recipient country is classified as a Least Developed Country, and _Xi_ is a vector of recipient-specific controls. Summary statistics of these variables are found in table 2. Standard errors robust to possible heteroskedasticity are reported in all tests.

Data on aid tying shares were computed from the AidData portal, a database which provides development financing data at the project level<sup>7</sup> . AidData uses the CRS as a main source. The CRS reports for each project the total commitment amount, the amount of tied aid, the amount of partially tied aid and the amount of untied aid. Tied aid is defined as development assistance where procurement of goods and services is limited to the donor country or to a group of countries which do not include substantially all aid recipient countries. For aid to be classified as partially tied the latter must be the case, i.e. the group of eligible countries must include substantially all recipients. Finally, untied aid is defined as development assistance for which the associated goods and services may be fully and freely procured in all countries (DAC, 2001)<sup>8</sup> . Based on these definitions

> 6The EC is in some respects more like a bilateral than a multilateral donor. For example, Martens et al. (2002, p. 192) report that “national representatives in EC foreign aid decision-making committees spend a considerable part of their time exploring and pursuing contract opportunities for national suppliers”. Unlike multilateral donors, it is a member of the OECD DAC.

> 7See www.aiddata.org

> 8Although these data are the best available, they do not tell the full story on aid tying. Some aid that technically meets the untied criteria may be de facto tied (Clay et al., 2009). Many donors with a high rate of untied aid (including some small donor countries) nevertheless award a high share of aid contracts within the home country. Furthermore, some donors do not comply adequately with the transparency provisions of the 2001 DAC recommendation that call for ex ante notification to the DAC of aid contracts open for bidding and ex ante reporting on contracts awarded.

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