New research suggests the tying of Australia's aid programme to Australian exporters has little effect on the donor country.
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The paper, by Matthew Dornan and Sabit Otor from the Australian National University's development policy centre, looked at the benefits of foreign aid for exporters.
It found that spending was hugely beneficial for the national interest, with a return of $A7 for every $A1 invested.
Dr Dornan said the research also found that if the funding was "tied" to Australian exporters it would have had no additional benefit for the donor - but it did have a detrimental impact on poverty alleviation programmes.
"Occasionally in Australia you'll hear calls to re-tie Australian aid to Australian suppliers. What we found would suggest that those sorts of calls are misplaced - they're, at best, a distraction. At the same time we know that the tying of aid reduces the poverty alleviation impacts of aid. So that's well established in the literature and that's why you'll often hear criticism of the tying of aid."
