To several donor agencies the structural adjustment epoch of the 1980s had as a consequence that programme aid, in the form of balance-of-payment assistance, particularly to Latin America and subSaharan Africa, came to occupy a growing proportion of foreign aid budgets (see Chapter 5). Grave foreign exchange shortages made the so far dominating project approach rather meaningless, unless it could be supplemented with supplies of foreign exchange, or import support, to finance or cover vital imports and some debt servicing. To make a change into programme assistance several donors have relaxed certain donor restrictions, such as detailed control over the use of aid funds, and ‘showing the flag’. These restrictions are by people in donor communities believed, or assumed, to be most likely realised through aid tied to projects, and through personnel assistance provided by nationals of the aid-delivering country.1 The idea of moving from project to programme aid, in its pure and untied version, is not easily accepted in aid constituencies. Also, powerful commercial interests, and even career interests within and outside national and international aid bureaucracies, may militate against a general untying of aid programmes. As a sort of compensation for relaxing direct control over aid resources much programme aid was made conditional on recipient governments conducting ‘sound’ economic and other policies, following first of all the so-called ‘Washington consensus’, agreed between the IMF, the World Bank and the us government on behalf of the international donor community some time in the 1980s.