The recent White Paper on Norwegian north-south policy (St. meld. nr. 19 (1995-96)) argues for an increased tying of Norwegian development assistance. The White Paper also advocates that NORAD's provisions for export and investment support should be extended to include projects in the fast growing Asian economies. These countries represent the most interesting markets for Norwegian enterprises. Based on economic efficiency and income distribution criteria, this paper questions the basis for changes in Norwegian aid policy in such a direction. The paper further argues that the funding of Norwegian exports to and investments in countries in East and Southeast Asia through the aid budget most likely implies subsidising projects that would be implemented anyway, since financing and credits on commercial terms are readily available for projects in these countries. This way of using the aid budget will imply less resources to projects in countries where the needs are greater and where commercial funding is available only to a limited extent. This working paper is only available in Norwegian.
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