The world's poorest countries rely heavily on aid from the World Bank, IMF and bilateral donors such as the UK, giving donors a powerful influence over poor countries' public policy.

The influence of aid donors is being abused by the practice of tying aid to risky and unproven economic policy conditions such as water and energy privatisation.

Despite recent attempts to increase poor countries’ ‘ownership’ of policy reforms, such as the Poverty Reduction Strategy Paper (PRSP), new ActionAid research has found that controversial policies such as utility privatisation continue to be pushed strongly by the donor agencies.

 Where poor countries fail to comply with these conditions, donors withhold aid money.

While there is no quick fix to the challenge of providing universal basic services, ActionAid believes that solutions have to be home-grown, and home-owned. Donors need to step back from intrusive policy conditions, and allow poor countries to reach policy decisions in a balanced and transparent way.