Donor governments have often pursued multiple interests in development assistance,
including economic and geo-political goals - e.g. contracts for their domestic
firms, support for friendly political regimes - which have not always been consistent
with the sustainable development objectives of host countries. This has resulted
in development aid, and particular tied bilateral aid, having a very mixed record.
It is increasingly recognised that Official Development Assistance (ODA) can
be better used to address the fundamental determinants of development, which
include a sound policy environment, strong investment in human capital, well
functioning institutions and governance systems and environmental sustainability
rather than as a leading source for investment in environmentally sound and
cleaner technologies. This realisation has arisen not least from the mixed experience
with development aid programmes.