Assistance for Development
Over the last 50 years, rich countries have accepted a responsibility to help poor countries. Development assistance grew directly from the violence of the first half of the 20th century. As explained in the Issue Brief on the International Financial Institutions, the World Bank was created at the Bretton Woods Conference to assist the countries shattered by the Second World War.
The European Recovery Program, commonly known as the Marshall Plan after one of its key architects, then U.S. Secretary of State George C. Marshall, was the world's first development program. Through the Marshall Plan, the United States provided billions of dollars to wartime allies like Great Brittain, France, and the Netherlands to help them back on their feet. But it also stood military and political tradition on its head: Instead of taking money and resources from its defeated enemies as reparations for damage in allied countries, under the Marshall Plan the United States also poured billions of dollars into the economies of Germany, Italy, Austria, and others as a way to prevent war in the future.
The Marshall Plan thus established for the first time two key principles of development assistance:
- That it is morally correct to help people struggling to improve their lives; and
- That giving development funds would benefit the United States itself by contributing to its foreign policy goals and creating foreign markets for American exports.
By emphasizing these two principles government officials were able to convince the public of the desirability of giving development assistance and to ensure that Congress would approve budgets for this important work. Ultimately, the Marshall Plan proved a moderate success. It was hailed by leaders of the nations that benefited from it, particularly Germany, France, and Britain, as the key to a speedy economic and social recovery from the war and the foundation of a new era of peace and prosperity in Europe.
However, with Great Britain receiving the greatest amount of aid, perhaps the balance and distribution of the aid was skewed. To critics, the Marshall Plan is seen as a major obstacle to development. Instead, the Plan symbolizes American imperialism and willingness to throw money at a problem. These critics often cite saving and business strategies as more important long-term economic factors than foreign cash.
Another feature of the post-Second World War world dramatically affected development. At the end of the war, the people in Africa and Asia began to agitate—politically and militarily—for their independence from European colonial powers. Those powers-such as Britain, France, Belgium, and the Netherlands—were impoverished from years of war and in little position to resist. As a result, much of the non-Western world, including India, Pakistan, Indonesia, and many African nations began decolonizing.
As decolonization gathered momentum in the 1950s and 1960s, it became clear that many newly independent nations did not have the skills and resources needed to thrive in their new era of freedom. Money, together with expertise and infrastructure, was needed to make the most of new opportunities and develop economies for the improvement of the lives of local people.
In response to these needs, wealthy countries began to establish agencies to contribute development advice and resources to the developing world, as described in the following section.
|
