United States Foreign Aid Research Articles

Foreign physicians in the United States.

To the Editor.— While endorsing Long's good recommendations for the training of foreign physicians in the United States ( 217 :688, 1971), I do want to raise a question about the 1966 data that he cites in his article for drawing the conclusion that 80% of foreign physicians came from developing countries receiving direct United States Foreign Aid. Unfortunately, Long does not give the source of his data. The AMA's recent publication entitled The Profile of Medical Practice—1971 indicates that of the 53,552 foreign physicians in the United States on Dec 31, 1969, over 24,000 (45%) came from European countries, South Africa, Australia, New Zealand, and Israel, countries that are classified as developed. Physicians from Asia, the Far East, Middle East, and Africa (excluding South Africa), number about 20,000 or 38% of the total. Physicians from Latin American countries comprised 17% of the total. As of Dec 31, 1969, the United

What's Wrong with the United States Foreign Aid Programme?

The main problem with foreign aid in today's world is that there is not enough of it. Reasonable calculations by cautious development economists suggest that the aid needed in the early 1970s to enable the developing economies to grow at the maximum possible (and presumably desirable) rate, given their capacity to absorb capital inflows productively, is only about one per cent of the aggregate net national income of the rich countries. From this it follows that there is in general no insuperable economic problem in expanding foreign aid and that the fundamental donor problem is a political one of acceptance. Still, although the required total volume of aid looks small in relation to prospective donor national income, it is much larger than current flows, especially when netted of debt service charges and shorn (as they should be) of such essentially commercial transactions as loans at free market rates of interest and easy credit terms designed primarily to subsidize domestic industries. The basis for these statements is, I believe, a relatively hardheaded and conservative appraisal of the probable economic performance of major individual developing and developed countries, of the prospects for commodity exports, and so on. No account has been taken in these calculations of the need, passionately felt by some, for vastly increased international redistribution of income and wealth on purely humanitarian or egalitarian grounds. Yet, even this minimal prospectus of what is needed by way of aid -needed on any reasonable terms -looks wildly Utopian in the light of the recent experience of slackening aid outflows and lessening enthusiasm for the whole idea in most Western countries.

What's Wrong with the United States Foreign Aid Programme?

What's Wrong with the United States Foreign Aid Programme?

Looking a Gift Horse in the Mouth: The Economics of Food Aid Programs

In the late nineteen-fifties and early sixties, food aid became a large and popular part of the United States foreign aid program. Under Public Law 480, it took the form of concessional sales of foodstuffs for soft currencies and concurrent loans of most of the generated funds for economic development.' On the surface, food aid appeared to offer a convenient combination: it promoted economic development in the recipient countries and at the same time allowed the United States to defer a politically risky reform of its domestic agricultural price support policy, which was fostering surpluses. Soon, however, certain economists voiced fears that the proponents of PL 480 were ignoring a potential danger. By relieving the recipient countries of the necessity of supplying their ever increasing demands for food on their own, food aid may discourage them from attempting increased internal production. It may cause neglect of agricultural development and foster perma-

Foreign Assistance and Self-Help: A Reappraisal of Development Finance

IT is generally believed that foreign capital inflows play a strategic role in promoting progress toward self-sustained growth in developing countries. Yet the relationship between the two has received little rigorous analysis in the voluminous literature on economic development. The Foreign Assistance Act of 1961 enunciated the criterion of as a condition for United States foreign aid,' but the appealing self-help shibboleth has not been given analytical content. However, in a pioneering effort, Professor Rosenstein-Rodan recently raised some of the important analytical questions associated with the self-help notion:

The United States Foreign Aid Program: An Appraisal

The United States has maintained a foreign aid program since World War II, but the objectives of aid have been mixed. When President Truman announced the technical assistance program in 1949, many hoped that we had embarked on a continuing commitment to assist poorer coun tries toward economic development. Actually, aid in recent years has been largely military aid, and even economic assist ance has been concentrated in a few countries of strategic value to us. Aside from this overemphasis on military aid, our main problem has been the failure to recognize that haphazard, project-by-project economic grants or loans, administered by many agencies, do not much help poor countries. Economic development requires capital, technical skills, and entrepre neurship in combination. It will not take place without educa tion and social reforms creating incentives for progress among the majority in any country. The new program proposed by President Kennedy could go far to correct present deficiencies. It would commit the United States to long-term development assistance, administered by a new aid agency, in accordance with plans to be worked out by recipient countries. The role of the United States will continue to be difficult. We must learn to tie together money, projects, and people in effective ways and to supervise all programs closely. Yet we will have to avoid giving offense to countries which ask for aid, and we must persuade them to invite increasing participation by United States businesses in all types of enterprise. We should continue to try to strengthen the economic foundations of the free world, but we must not try to buy friendship, and we must be sympathetic toward true neutralism in politics.

Cargo Preference and the American Merchant Marine

* An earlier form of this article was written during the spring semester, 1958, for the course in International and Maritime Law at the School of Law, University of California, Berkeley. The opinions expressed herein are solely those of the writer. B.A. 1952, State University of Iowa; LL.B. I958, University of California, Berkeley. Member of the California bar; Assistant Counsel, California Farm Bureau Federation. 1 House Comm. on Merchant Marine and Fisheries, Administration of Cargo Preference Act, H.R. REP. No. 80, 84th Cong., ist Sess. 3 (1955) [hereinafter cited as H.R. REP. No. 80]. 2 Hearings on S. 2584 Before the Subconmittee on Merchant Marine and Fisheries of the Senate Committee on Interstate and Foreign Commerce, 84th Cong., 2d Sess. 59 (1956) [hereinafter cited as s956 Senate Hearings]. Three other congressional committee hearings are repeatedly referred to in this article and will be cited as indicated: (a) Hearings on S. 3233 Before the Subcommittee on Water Transportation of the Senate Committee on Interstate and Foreign Commerce, 83d Cong., 2d Sess. (I954) [hereinafter cited as 1954 Senate Hearings]; (b) Hearings on S. 3233 Before the House Committee on Merchant Marine and Fisheries, 83d Cong., 2d Sess. (I954) [hereinafter cited as I954 House Hearings]; (c) Hearings on Administration of Cargo Preference Act (50-50 Law) Before the House Committee on Merchant Marine and Fisheries, 84th Cong., Ist Sess. (I955) [hereinafter cited as 1955 Admin. Hearings]. For a general discussion of United States foreign aid and development programs, see Morray, Aid Without Tears: Opportunism in Foreign Development Policy, 46 CALIF. L. REV. 665 (1958). 8 1956 Senate Hearings 131. 'The bulk of American-flag vessels is over ten years old. about i6 per cent of our dry cargo fleet, which numbers 722 ships of 7.3 million deadweight tons, was built after the war. Shipping Outlook, March 1958, p. 4. ' Only 12% of vessels equipped for refrigeration fly the American flag. FMB & MARITIME ADMINISTRATION ANN. REP. 60 (1957). 6 In I957, total monthly vessel operating expenses of American-flag ships (not including depreciation) was estimated at $39,758, while Liberian-flag vessels had costs of about $I9,325. Hearings on Study of Vessel Transfer, Trade-in, and Reserve Fleet Policies Before the House Committee on

Lyman S. Moore as Consultant in Thailand

EXPERIENCE with United States foreign aid programs has increasingly emphasized the importance of strengthening the administrative institutions of those recipient nations whose traditions in self-government and in conducting extensive public services are relatively short. The assistance extended to such nations necessarily flows through local official channels, and its immediate and long-run usefulness is heavily influenced by the soundness of the administrative organization, the civil service, and the established ways of transacting governmental business. The administration of foreign aid programs naturally has made United States representatives fairly familiar with local administrative problems and resources. In some countries, notably Greece, United States aid groups have been staffed to provide technical assistance in governmental management. In many, however, American knowledge of local administrative problems has been a loose collection of impressions gained in securing customs clearances, in organizing a demonstration program in the field of agricultural extension services, in equipping a hospital, or in accomplishing any other of the diverse objectives embraced within the mutual aid programs. Such contacts, however, do not serve to sort out the basic problems from the peripheral; and while they have acquainted Americans with local officials whose dedication to their duties is profound and whose talents are of the highest order, they have also revealed that these same officials have neither the time nor, in many cases, the perspective to identify the causes of poor administration or to formulate remedies and the order in which they should be applied. Along with the recognition of the paramount importance of administrative improvement in realizing the optimum value from economic and military aid, and of the appropriateness of United States grants of technical assistance in furthering such improvement, t ere has come a growing realization of the need for an orderly approach to this objective. In some cases it has been sought by the addition of a public administration adviser to the aid mission's staff; in others, the initial phase of developing a program for improving public administration in the recipient nation has been entrusted to one man, to a team, or to an institution like Public Administration Service as a short-term undertaking, and the later phases have been carried on by the regular mission staff.

Foreign Aid with and without Dollar Shortage

DURING the period of the European Recovery Program (ERP), the first large scale provision of foreign aid by the United States in peacetime has been experienced. Foreign aid did not begin with ERP, and it may continue to exist as a general institution well beyond the duration of that particular program. But the practice of foreign aid outside times of acute national emergency required a deeper search for its rationale. The attention of policy makers and students came to be focused on the dollar shortage. The dollar shortage of foreign countries served as an explanation of the need for our aid, and its computation served as a means for establishing the amount of aid required. The search for an explanation of foreign aid in peacetime has suffered somewhat from the fact that the extraordinary situation of aid to Europe was not considered a part of a series of extraordinary situations that have been with us almost continually since 1940. The general problem of our foreign aid, its apparently prominent place in our scheme of things, was not sufficiently clear. It seemed necessary to rediscover some of the broader insights gained in World War II, especially during the great Lend-Lease discussion, regarding the nature of the relations between the United States and certain groupings of foreign countries. At the same time, it became apparent that it was necessary to distinguish between various phases of foreign aid which are characterized by different approaches. The dollar shortage is merely one line of approach. The dollar shortage is understood here as a particular process of foreign aid administration. This is not offered as a novel definition but rather as an attempt to catch the common meaning of the term in the time when it appeared and became operational in international economics. In particular, it seems useful to use the term not merely as a synonym for either United States foreign aid or a United States export surplus. Two Viewpoints on Dollar Shortage

European Rearmament and United States Foreign Aid

TNTIL very recently American aid programs to European countries consisted mainly of shipments of goods and services for immediate consumption or for building up productive capacity. At the present time, however, a new kind of aid, the Mutual Defense Assistance Program, consisting of military equipment, is also flowing to most of the ERP countries to refit underequipped defense forces and to arm new units. The London Conference of Foreign Ministers which ended May I9, I950, distributed the total burden of European rearmament among the Atlantic Pact member countries without, however, publishing any military or cost statistics. But it is clear that the new additional military responsibilities will require increases in present European military budgets. In the full employment economies of ERP Europe, where total output can rise only slowly, these new military responsibilities are so much greater than present levels of American arms aid under the Mutual Defense Assistance Program that a shift of productive factors away from civilian production will be required. To that extent, the purposes of ERP and the European rearmament program would seem contradictory. This paper will attempt to estimate the new economic and fiscal efforts required of these countries as a result of superimposing the new rearmament program on their recovering economies, as well as the amount of addib tional American aid that would be needed to fulfill both recovery and rearmament goals. Under the provisions of the Mutual Defense Assistance Act of I949, the United States is sending Western Europe approximately $i billion worth of arms during the present fiscal year. One hundred million dollars of this total is to be used to defray the transportation costs of American surplus equipment (originally worth $450 million), while the other $900 million is to pay for weapons which come from the United States reserve stocks, which must be replenished by current production. The procurement phase of the first year of MDAP ended on June 30, I950, and on June 30, I950, the Senate authorized the expenditure of an additional $1,223 million for the second year of MDAP. The recipients of this aid are the Benelux countries, France,2 the United Kingdom, Norway, Denmark and Italy. At this time, these countries are spending a total of $4,28o million per year on defense. Of this amount, France and the United Kingdom are spending $3,380 million, or more than 75 per cent of the total. The major responsibility for expanding the defense establishment of the Atlantic powers will thus fall on them.

United States Foreign Aid Programs: Past Perspectives and Future Needs

For the past five or six years American foreign economic policy has constantly been forced to scramble to keep pace with rapidly changing reality. On March 30, 1950, the President entrusted the retiring Secretary of the Army, Gordon Gray, with responsibility for “a careful analysis of the various factors bearing on the present disparity between imports and exports.” Mr. Gray scarcely had time to assemble a staff and begin an intensive investigation when the attack on South Korea introduced significant alterations into the factual setting of the world's economy.