The increase in US aid to the poorest countries must be accompanied by a cut in bureaucracy and a decision to end the system of forcing aid recipients to buy American exports, according to an intergovernmental review, reports the Financial Times.

The three-yearly review of the US's aid effort by the OECD-the draft conclusions of which were released on Tuesday-welcomed the $5 billion-a-year "Millennium Challenge Account" (MCA) announced this year by US President George W Bush, but it said aid delivery was inefficient.

"The responsibility for overseas development assistance is being handled by about 50 US government entities," the OECD's development assistance committee said.

"There is a need for greater coherence between development and broader government policies (e.g., trade and agriculture)".

The OECD said that US aid was still overwhelmingly "tied" to the purchase of American exports, or delivered directly in food aid - both of which have repeatedly been criticized by development experts. "Transaction costs are expensive and can lead to inefficiencies in finding locally supported solutions in developing countries," the OECD said.

The US administration has been working on the details of how to deliver the money under its MCA, which aims to break with US tradition by funding good-performing developing countries rather than rewarding political allies. Other donors, including European nations and the World Bank, already have similar criteria in their aid efforts. The OECD urged the US to learn from others "to ensure there is consistency" between American aid criteria and other donors.