This article aims to review whether schemes incorporating human resources, funding, institution, and ideas from an aid recipient country had any effect on the policy-making process of International Development Agency. The diversification of new aid or fund providers, including emerging countries such as China and private corporations, has attracted much attention in recent research and implementations of international development projects. Critics maintain that this has led to an unbalanced power relation between aid provider and recipient. One of the most significant examples would be the shift toward Localization in development plans devised by International Development Agency, including organizations within the United Nations. Such development has been said to enable aid provider to broaden interactions with the recipient for its own agenda. Hence, by examining the conventional argument that local assets must be utilized to compensate for the lack of funds and resources of International Development Agency, this paper has revealed the ways in which International Development Agency policies can become dictated by conditions at aid recipient country, whereby indicating the possibility of finding a solution to the restoration of power balance.

In particular, this paper has followed Argentina’s transition from military rule to a democratically elected government, a period which had been marked by very specific reference to democratic values in policy documents of International Development Agency, especially that of United Nations Development Programme (UNDP). First, an overview of the Localization policy is given to trace its historic characteristics as it infiltrated the Latin American region in the second half of the 1970s. Second, democratization and economic development issues faced by Argentina are identified to provide a backdrop for the introduction of Localization policy. Third, an analysis of measures taken by UNDP onsite is presented through evidence found in the Country Programme documents. Finally, it discusses about how Localization of development project had swayed UNDP policies and analyses the main factors for these changes. As a conclusion, the paper has demonstrated that a growing tendency in incorporating resources from aid recipient country will inevitably embroil International Development Agency in local issues to such an extent, it does not only lead to alteration of policies but also heavy reliance on Country Office for responsive actions.