Theory and Politics of Foreign Aid in the United States

Term Paper, 2013
15 Pages, Grade: 1,0


Table of Contents


1. Introduction
2.1. US aid before 9/11 - an economic discourse biased by the Cold War?
2.2. US aid after 9/11 - an effective tool for the war on terrorism?

3. Conclusion

4. Bibliography

5. Figures


illustration not visible in this excerpt

1. Introduction

The Al-Qaeda terrorist attacks against the United States of America on September 11th 2001 changed worldwide political dynamics and the perception of political challenges and issues in regions, in which mainly Muslims live. The symbolic attack of the extremists against the Western world opened the debate why such hatred developed and - more important - how the repetition of such events could be avoided in the future. While the Bush administration quickly and publicly decided to intervene militarily in Iraq and Afghanistan in order to find the responsible ones behind the attacks, it has been concluded as well to work on the security of US citizens through development assistance in long-term projects. Reconciliation, the promotion of democracy and the increase of the education level in regions, in which Muslim extremist were trained and radicalized have been perceived as key aspects of the war on terror, going beyond the military classic concept of war. Nevertheless, military forces have spent more than a decade in Afghanistan and left Iraq earlier with a poor administrative state. A possible connection between violence, attacks and humiliation and the present forces supposedly has been observed by the Muslim community after cases of torture by soldiers became public, which appears to be a contradiction to the noble goal of the promotion of peace, freedom and security. Surely, not the only challenge in the regions, that had been a breeding ground for terrorism.

Therefore the leading question of this essay will be “is development assistance an effective response to global terrorism after 9/11?” but the main focus will be set on the foreign aid of the USA, since the direct political reactions after the terrorist attacks had a bigger impact than the ones of the European Union or other states, in spite of the terrorist attacks in London and Madrid. Furthermore, it is important to focus on a rather narrow and clear aspect in order to achieve a deepened discourse instead of a superficial catch­all debate, which could not be provided properly with the formal limitations of this paper anyway.

In order to answer the question, in the following chapter firstly it will be briefly described how US aid was provided before 9/11, including the most important countries and methods applied to achieve the goals. Afterwards the shift of perspective in foreign policy and the related aid allocation will be presented, while the increased effort and the outcomes will be portrayed. Finally, concluding remarks will summarize the findings and arguments of this essay.

2.1. US aid before 9/11 - an economic discourse biased by the Cold War?

The US had started providing aid on a significant level yet after the end of World War II, introducing the European Recovery Program - also known as the Marshal Plan - to the devastated countries in Europe in order to construct infrastructure, fight poverty, fascism, establish democracies and loyalty against the Soviet Union[1]. Since then, foreign aid has been an established tool in international relations, diplomacy and security, used to work on problems in less developed countries but as well on national interests, operating on a global scale. During the period of Cold War for instance, US aid was provided mainly in economic and military terms, which was directly linked to benefits for the US security, perceiving the Soviet Union as a constant threat, so that ethical motives and the support of human rights per se were not directly in the focus of development assistance, but rather a concomitant of the promotion of democratic values[2]. Assuming that democratic states have a peaceful and stable relation towards each other without exercising aggression when conflicts of interest occur[3], US aid provided to Africa peaked the first time in the 1960s during the great Cold War tension (e.g. Cuba Crisis) and later again in the middle of the 1980s due to a striking famine, but partly a relation to the Cold War and the maintenance of a particular positive public image can be supposed[4]. During the whole Cold War period, throughout the wars (e.g. in Vietnam) and tensions until the first Bush mandate in the early 1990s, the main goal was without doubt the containment of the Soviet Union, and in the first years after World War II, foreign aid was explicitly used as a main instrument in the ideological fight, that was even perceived as more important than military actions, to achieve this goal like after the emerge of the Korean war, which led to cuts in the military budget and an expansion of foreign aid between 1947-50[5], consuming 2.5 per cent of the US GDP. Of course humanitarian aid was provided when needed as well as the promotion of education, healthcare and protection of the environment, but regarding the methods until the 1990s, rather institutional ODA had been allocated, addressing local governments instead of societies.

While as well economic incentives led to the promotion of foreign aid (e.g. food aid as an opportunity to export US groceries), criticism against the policies of newly introduced USAID in the 1960s rose, when training and technical assistance were applied to South America, showing only very slow results and questioning if foreign aid was a suitable tool of diplomacy like President John. F. Kennedy had portrayed it during his mandate[6]. Despite of Kennedy’s attempt to promote foreign aid, after completing the Marshall plan, aid had constantly dropped on average 30 billion US Dollar per year, never reaching more than 1 per cent of the GDP after the 1960s again, falling to 0.09 percent in 1997 (Figure 3) and not rising higher until the terrorist attacks in 2001, although there had been brief peaks, but staying far from the goal to address 0.7 percent of the GDP to foreign aid.[7] After the collapse of the Soviet Union, the main goal of containing communist ideologies shifted in the 1990s during the Clinton administration towards sustainable development (including not only economic growth, but as well democratization and measures improving human life conditions), which was criticised by the Senate, arguing this could be promoted better by the private sector, therefore the Bush administration later modified this concept by introducing the three main pillars of his foreign aid policy: economic growth, agriculture and trade[8]. This adjustment again shows the focus on advantages for the US economy when supporting these aspects in development politics, enabling the emergence of new markets and trade partners.

Although it appears that US aid has been simply driven by economic and security motives, it has been a rather complex decision, how aid should be provided. In the 1980s, when the foreign aid budget consumed 0.5 per cent of the US GDP, both diplomatic and developmental purposes led to the fact that in this decade the biggest recipients of US aid were: Egypt, Israel, India, Turkey, Indonesia, Bangladesh, Sudan, Philippines, Jordan and Somalia[9], showing that the stabilization of sensitive areas, not only in an ideological sense was crucial, without arguing about the importance of the presence of the Soviet Union. Poverty alleviation and the promotion of human rights as such haven’t been the main incentive for the USA to allocate foreign aid at any time[10], but it hasn’t been promoted to be the main focus either.

On this stage, it can be concluded that US aid has been established in the decades from the beginning of the provision until the terrorist attacks in 2001 as a diplomatic tool, aiming to support the development and maintenance of US economy and security, but as well targeting stability and developmental improvement of less developed countries, without focussing on the poverty alleviation of the poorest ones in the world, that hardly appear on the US agenda. This can be explained by the poor significance of these countries in the international system regarding economy, military force and non- traditional security threats. Moreover, it can be stated, that the importance of foreign aid decreased with time until the terrorist attacks in 2001.

2.2. US aid after 9/11 - an effective tool for the war on terrorism?

While foreign aid was once perceived as a crucial instrument in order to strengthen the USA, it lost its importance in the post-war period until 2001, referring to the relative amount given for the purpose of aid. The events of 9/11 shocked the unprepared US administration, and raised the questions why the terrorist attacks happened and how to react on them in order to secure the country in the long term. Beyond the military intervention in the Middle East, there has been a demand for an increase of education - without concretely specifying in which regard it might be necessary -, poverty alleviation and development, assuming the existence of a causal connection between poverty and extremism, which as well has been questioned[11]. Krueger and Malečkov argue that from the empirical data, there is no connection between the economic and educational background on an individual level regarding violent crimes, and furthermore suggest that many of the members in terrorist groups have a rather better educational background and are not driven by economic pressure, but hate[12]. Nevertheless, there are positions emphasizing the importance of foreign aid, as it can positively influence the local governments and their will to cooperate when education and other important sectors are being improved, in spite of the often well-educated background of terrorists[13]. Furthermore, it has to be taken into account that changes in society’s attitudes after the provision of foreign aid require a social and cultural shift of perspective, which happens in the long term and therefore cannot be measured in a short period of time[14].


[1] Roger C. Riddell, Does Foreign Aid Really Work? (Oxford: Oxford University Press, 2007), 24.

[2] Titjen Demirel-Pegg and James Moskowitz, “US Aid Allocation: The Nexus of Human Rights, Democracy, and Development”, Journal of Peace Research, Vol. 46, No. 2, 182.

[3] Ibid., 181.

[4] Ted Dagne, “Africa: U.S. Foreign Assistance Issues”, Congressional Research Service, September 2001, 2.

[5] Lawrence Korb,”Foreign Aid and Security. A Renewable debate?” in Foreign Aid and Foreign Policy, Lessons for the Next Half-Century, ed. Louis A. Picard, Robert Groelsema, Terry F. Buss (Armonk: M.E. Sharp, 2008), 28.

[6] Carol Lancester, Foreign Aid. Diplomacy, Development, Domestic Politics (Chicago: University of Chicago, 2006), 70.

[7] Korb, Foreign Aid and Security, 29.

[8] Ibid, 31.

[9] Lancaster, Foreign Aid, 80.

[10] Demirel-Pegg and Moskowitz, “US Aid Allocation: The Nexus of Human Rights, Democracy, and Development”, 185.

[11] Alan B. Krueger and Jitka Malečkov , “Education, Poverty and Terrorism: Is There a Casual Connection?”, Journal of Economic Perspectives, Voi. 17, No. 4, Fall 2003, 119.

[12] Ibid, 122.

[13] Jean-Paul Azam and V ronique Thelen, “Foreign Aid Versus Military Intervention in the War on Terror”, The Journal of Conflict Resolution, Voi. 54, No. 2, Terrorism and Policy (April 2010), 255.

[14] Ibid, 255.

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Theory and Politics of Foreign Aid in the United States
University of Wroclaw
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ISBN (Book)
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Sicherheit, 9/11, Terrorismus, Terrorism, Foreign Aid, Entwicklungshilfe, Terrorismusprävention
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Alice Greschkow (Author), 2013, Theory and Politics of Foreign Aid in the United States, Munich, GRIN Verlag,


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