Chapter 5 | Page 206 most demand. It also effectively reduces policy space of the State in determining how aid money could be used most effectively and efficiently. The OECD recognises that tied aid not only increases the cost of a project by as much as 15-30 percent, but also requires larger bureaucracies in both donor and recipient countries, thereby reducing the overall effectiveness of funds utilisation.83 In recent years, the proportion of untied bilateral aid rose progressively from 46 percent to 82 percent.84 An alternative approach to tied aid can be seen in the emphasis by emerging donors on mutual benefit, which contrasts with traditional donors’ emphasis on untied aid.85 5.3.1.3 Institutional capacity in recipient States Institutional capacity in recipient States is critical to the effectiveness of aid. Most developing States have inadequate institutional capacity in many aidrelated areas, particularly in negotiating aid with donors, managing aid resources and implementing aid programmes. From an ESC rights perspective, the ability and willingness of recipient States to recognise their international assistance needs in terms of specific ESC rights strengthens their position in aid and co-operation activities. In this context, the capacity of recipient States to conduct comprehensive needs assessments and develop effective negotiation strategies are fundamental to effective engagement with donors. Institutional and professional capacity to plan and conduct aid negotiations with donors can make a significant difference in securing adequate and relevant aid and assistance projects. In addition to low institutional capacity in many recipient States in this regard, the current level of donor fragmentation 83 Organisation for Economic Co-operation and Development, Untied aid OECD <http://www.oecd.org/development/untied-aid/>. 84 Edward J Clay, Matthew Geddes and Luisa Natali, Aid untying: is it working? (Overseas Development Institute, 2009), <http://www.oecd.org/dac/evaluation/dcdndep/ 44375975.pdf>. 85 Arjan de Haan and Ward Warmerdam, 'New Donors and Old Practices: The Role of China in the Multilateral System' in Hany Besada and Shannon Kindornay (eds), Multilateral Development Cooperation in a Changing Global Order (Palgrave Macmillan, 2013) 215, 228.