Bi-lateral and multilateral aid programmes of donor nations (most often Western countries) often attach business, purchasing and other requirements of recipient nations. This type of aid reinforces the image of the donor as benefactor of the world and the image of the recipient as inferior. Such assistance is also typically determined by the intentions and values of the recipient nations, as most donor nations refuse to support governments ideologically opposed to their own. In a campaign for universal democracy, for example, some Western countries may withhold foreign aid from those nations not striving toward democratic ends, regardless of the degree to which aid is needed. As such, foreign assistance is dependent on the donor nation's assessment of how the recipient nation treats its citizens. Current debates on human rights issues are consequently intrinsic to the allocation of foreign aid.
During the Cold War, developing countries were able to play West against East in seeking aid. Following the Cold War major industrialized countries agreed in 1993 to attach importance to respect for democratic principles in their agenda in extending new official aid which totalled about $64 billion in 1993.
During the course of the 1990s, over $100 billion was given in western aid to Poland, Russia and other eastern bloc countries, most of which was for democracy and private enterprise. Over 90% came not as grants but in the form of technical assistance, loans and export credits. The donors and recipients adjusted to accommodate each other, except in the case of Russia, which resisted. The pervasive distrust of foreigners and officialdom, the power of the old elite, and the persistence of established relationships and mentalities could not be easily eliminated. Western donors were caught in a paradox: to achieve their stated reform goals (pluralism, civil society and democracy) they selected and promoted specific political groups; but this strategy seemed to help narrow rather than widen the range of participation.
Paternalistic control blocks the efforts of those who seek to put their energies creatively into caring for the gifts of other cultures. This paternalism pervades the foreign policy of those donor nations which attach strings to their foreign aid grants, and also of recipient nations which package and market donors' cultures and social issues.
There is a vital connection between open, democratic and accountable systems of governance and respect for human rights, and the ability to achieve sustained economic and social development. Sustainable development requires a positive interaction between economic and political progress. This connection is so fundamental that participatory development and good governance must be central concerns in the allocation and design of development assistance.