United States Foreign Aid: A Brief History

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MADISON, Wis. — If asked how much of the federal budget goes toward the United States foreign aid, most Americans today will answer 25 percent. As it turns out, this figure is astronomically inaccurate. So how much of the budget does the U.S. actually allot to foreign assistance?

Less than 1 percent.

For the well-versed on the topic, this is not an idea that is new. But how about those who believe that the U.S. really does give a quarter of its budget to foreign aid? For these people, such an idea is a radical shift in how they view international relations. It can change the way that they perceive foreign aid, and it has the potential to turn the average American into an advocate.

So it may be safe to say that U.S. foreign aid is a crucial area of knowledge for advocates that many people simply don’t know a great deal about, and it’s also an area that has not always had the most effective strategies or the best outcomes. Oxfam America argues that, for the past 20 years, U.S. foreign aid has had a negative reputation, and rightfully so; it has not been supplying people with what they say they need most, and it has lacked transparency crucial to its success. This was not always the case.

Modern foreign aid has its roots in the post-WWII era. It began with the Marshall Plan, which helped Europe restore infrastructure and find economic stability following the devastation of WWII. The Marshall Plan was viewed as a great success, and in 1949, then U.S. President Harry S. Truman worked off of its success to propose an international development assistance program. He called it the 1950 Point Four Program. It worked to create markets for the U.S. by reducing poverty and increasing production in developing countries. It also aimed to combat the feared spread of communism by demonstrating the success of countries under the capitalist system.

Through 1960, programs that supported technical assistance and capital projects popped up here and there. Organizations like the Mutual Security Agency formed around these technical assistance programs.

Then, The Foreign Assistance Act of 1961 founded USAID on November 3 of that year. For the first time, the U.S. had a single, unifying agency for supplying aid to other countries that fostered growth and development. Goals were fluid; the 1970s saw the organization make a key shift in thinking when it began focusing on protecting basic human rights with U.S. foreign aid. Now, this is an idea that many view as inherent to foreign assistance. With the 1980s came the move toward free markets. Foreign assistance set its main goals in stabilizing currencies and financial systems. The 1990s focused on sustainable development.

Now, aid from the U.S. is changing yet again. Not in its goals this time, but in the way it approaches its goals. U.S. government officials are beginning to partner up with leaders in developing countries. Oxfam America recently interviewed people on the ground, hands-on and in the front line of U.S. development efforts. They believed aid was headed in the right direction, noting changes like the ability of local leaders in the developing world to form partnerships with U.S., the priorities of aid being dictated by those receiving it and more stakeholder participation in development over all.

Today, U.S. foreign aid is a conglomeration of its history and the improvement of its past flaws. It emphasizes sustainable development that meets basic human needs, works with new models of operation that aim to make the U.S. more effective in its partnership with developing nations and fosters democratic governance. Simply put, U.S. foreign aid is dynamic; it has to be, and it is an area that will, with hard work, continue to evolve for the better.

Sources: OxFam America 1, OxFam America 2, USAID, Foreign Assistance
Sources: Roosevelt Campus Network

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