The U.S. Foreign Economic Aid System: from Truman to Trump

Abstract

This paper examines the evolution of the U.S. foreign economic aid system from the end of World War II up to and including the presidency of Donald Trump. It describes the scope of assistance and which countries were focused on. The United States has been and still remains the leader in providing economic aid. The maximum amount of aid was provided in the post-war period as part of the implementation of the Marshal Plan. In subsequent years, the amount of aid fluctuated in number due to external and internal reasons, the economic and political situation in the world and in the United States. Immediately after the end of World War II, an ideological concept of aid was formed, based on the ideas of a special role and leadership of the United States in countering communist influence. After the end of the Cold War, the idea of countering communist influence transformed into the idea of countering terrorism, and later was supplemented by the idea of countering a number of individual countries. At the same time, the idea of a special role and leadership of the United States in world affairs was preserved. The institutional foundations of the modern system of foreign aid were laid out during the Kennedy presidency, when the Foreign Assistance Act was passed (which is still in effect with numerous changes and amendments), and the U.S. Agency for International Development was created. At the same time, criticism of the foreign aid system, its fragmentation, complexity and lack of transparency was constantly heard. Regulatory decisions were made during Obama presidency to improve aid efficiency and transparency, but these decisions began to take effect only during the Trump presidency. The conclusion is drawn about the inertia of the foreign aid system associated with the procedures of the budgetary process, impact of influence groups, and difficulties of quickly terminating long-term aid programs or switching aid to other directions.