foreign aid

During and after World War II

Foreign aid, as an integral part of U.S. foreign policy, began (1941) during World War II with lend-lease. In planning for the postwar world, the United States hoped that after a brief relief program, the international balance would gradually be restored, and long-term reconstruction projects would be financed by loans from the International Bank for Reconstruction and Development (IRBD; also known as the World Bank) and the International Monetary Fund (IMF). Therefore U.S. foreign aid was chiefly in the form of emergency grants without any kind of central organization. Initially, the United States provided a large proportion of the funds of the international cost-sharing organization, the United Nations Relief and Rehabilitation Administration (UNRRA), established in 1943 by the Allied governments to provide a broad range of services to the war-devastated Allies. UNRRA spent billion, but the actual dimensions of postwar reconstruction had been greatly underestimated. Conditions in Western Europe, which, unlike Southern and Eastern Europe, had received little UNRRA aid, became desperate, and in June, 1947, the Marshall Plan was announced by Secretary of State George C. Marshall. Known formally as the European Recovery Program, it distributed (1948–51) over billion through the Organization for European Economic Cooperation (the predecessor of the Organization for Economic Cooperation and Development).

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