Agency for International Development. The Foreign Assistance Act of 1961 created the Agency for International Development (AID), a semi‐autonomous organization within the State Department which became the central bureaucracy responsible for economic aid programs. The agency's predecessors included the Economic Cooperation Administration, which implemented the
Marshall Plan; the Mutual Security Administration (1951), which continued economic and military assistance to Western Europe and began addressing the needs of underdeveloped states; and the International Cooperation Administration (1955). Using loans, food assistance, and technology transfers, among other methods, AID sought to enhance the productivity and overall market expansion of less developed nations. By the 1990s, the agency operated in more than one hundred countries, with two thousand employees in the field, and nearly ten thousand contractors.
Although concerned with the economic growth of poor nations, agency policies also reflected the real and perceived needs of the American political economy. AID officials proclaimed that their programs sought to foster a thriving private sector in the Third World and to guarantee an open door in recipient nations to foreign private investment, particularly from the United States. The agency's efforts to build a strong private business community in the less developed world contributed to the larger U.S. strategy of creating stable governments capable of resisting communist or economic nationalist movements that were anticapitalist.
AID programs sought the integration of developing countries into the global marketplace. The agency often pushed these countries to limit their social spending, increase privatization, and promote the export economy. Starting in the 1980s, for example, AID urged recipient nations to develop nontraditional, capital‐intensive crops for export. This policy of promoting export‐led growth aimed at alleviating the crushing levels of international debt that many third world countries had incurred during the oil‐price rises of the 1970s. Critics pointed out, however, that it destabilized traditional farming in many places, increasing poverty while simultaneously creating new markets for U.S. and other petrochemical and agribusiness corporations.
See also
Federal Government, Executive Branch: Department of State;
Foreign Aid;
Foreign Relations;
Foreign Trade, U.S.Bibliography
Frances Moore Lappe,, Rachel Schurman,, and and Kevin Danaher , Betraying the National Interest, 1987.
Vernon W. Ruttan , United States Development Assistance Policy: The Domestic Politics of Foreign Economic Aid, 1996.
Nathan Godfried
