Editing Development aid (section)

===Postwar expansion===
[[File:Marshall Plan poster.JPG|thumb|A poster promoting the [[Marshall Plan]] in Europe, the first large scale development program. It was designed to boost European economies shattered by [[World War II|war]] and prevent the growth of [[communism|communist]] influence.]]

The beginning of modern development aid is rooted in the context of Post-[[World War II]] and the [[Cold War]]. Launched as a large-scale aid program by the United States in 1948, the European Recovery Program, or [[Marshall Plan]], was concerned with strengthening the ties to the [[West Europe]]an states to contain the influence of the [[USSR]]. Implemented by the [[Economic Cooperation Administration]] (ECA), the Marshall Plan also expanded its reconstruction finance to strategic parts of the Middle East and Asia.<ref name="Httpwwwusaidgovabout_usaidusaidhisthtml">{{cite web |title=USAID: USAID History |url=http://www.usaid.gov/about_usaid/usaidhist.html |url-status=dead |archive-url=https://web.archive.org/web/20111009131110/http://www.usaid.gov/about_usaid/usaidhist.html |archive-date=9 October 2011 |access-date=12 March 2011 |publisher=[[USAID]]}}</ref>

Although Marshall aid was initially offered to Europe in general, the Soviet Union forbade its neighbouring states from accepting it. This has been described as "the moment of truth" in the post-[[World War II]] division of Europe.<ref name="bideleaux">Bideleux, Robert and Ian Jeffries, ''A History of Eastern Europe: Crisis and Change'', Routledge, 1998, {{ISBN|0-415-16111-8}}</ref> The Soviet Union provided aid to countries in the communist bloc; for instance, on Poland's abstention from the Marshall Plan, [[Joseph Stalin|Stalin]] promised a $450 million credit and 200,000 tons of grain.<ref>{{cite news |date=9 February 1948 |title=Carnations |url=https://content.time.com/time/subscriber/article/0,33009,855998,00.html |url-status=live |archive-url=https://web.archive.org/web/20090114182613/http://www.time.com/time/magazine/article/0,9171,855998,00.html |archive-date=14 January 2009 |access-date=2 March 2021 |magazine=[[Time (magazine)|Time]]}}</ref>

In January 1949 the inaugural address of U.S. president [[Harry Truman]] announced an extension of aid to "underdeveloped areas" in the form of technical assistance.<ref>{{Cite web |last=Truman |first=Harry S. |title=Inaugural address of Harry S. Truman |url=https://avalon.law.yale.edu/20th_century/truman.asp |url-status=live |archive-url=https://web.archive.org/web/20081027211730/http://avalon.law.yale.edu:80/20th_century/truman.asp |archive-date=27 October 2008 |access-date=2 March 2021 |website=The Avalon Project}}</ref> While the main theme of the speech was strengthening the free world against communism, in his [[Point Four Program|fourth point]] Truman also appealed to the motives of compassion and pride in civilization. "For the first time in history, humanity possesses the knowledge and skill to relieve the suffering of these people."<ref>[http://www.bartleby.com/124/pres53.html Transcript of the speech]</ref> The United Nations followed up the US initiative later that year by setting up an Extended Programme of Technical Assistance (EPTA) to help pool international donor funds for technical assistance and distribute them through UN agencies.<ref name=":27">{{Cite web |title=United Nations. Extended Programme of Technical Assistance - UNESCO Archives AtoM catalogue |url=https://atom.archives.unesco.org/united-nations-extended-programme-of-technical-assistance |access-date=6 March 2021 |website=atom.archives.unesco.org}}</ref> EPTA was a precursor of [[United Nations Development Programme|UNDP]].<ref name=":27" />

U.S. aid for development in the 1950s came to include grants and concessional loans as well as technical assistance. This development aid was administered alongside military aid within the framework of the [[Mutual Security Act]].<ref>{{Cite journal |last=Haviland |first=H. Field |date=September 1958 |title=Foreign Aid and the Policy Process: 1957 |url=https://www.cambridge.org/core/journals/american-political-science-review/article/abs/foreign-aid-and-the-policy-process-1957/0AF9B1AF4123FFF21DF8E06791A51269 |journal=American Political Science Review |language=en |volume=52 |issue=3 |pages=689–724 |doi=10.2307/1951900 |issn=1537-5943 |jstor=1951900 |s2cid=144564474|url-access=subscription }}</ref><ref>{{Cite journal |last=Morgner |first=Aurelius |date=1967 |title=The American Foreign Aid Program: Costs, Accomplishments, Alternatives? |url=https://www.jstor.org/stable/1405813 |journal=The Review of Politics |volume=29 |issue=1 |pages=65–75 |doi=10.1017/S0034670500023731 |issn=0034-6705 |jstor=1405813 |s2cid=145492668|url-access=subscription }}</ref> But for most of the decade there was no major multilateral body to provide concessional loans. An initiative to create such a body under the UN met with resistance from the U.S. on the grounds that it was premature. Accordingly, when the UN's "Special Fund" was created at the end of 1958, its remit was only for technical assistance not loans.<ref>{{Cite journal |last=Manzer |first=Ronald A. |date=1964 |title=The United Nations Special Fund |url=https://www.jstor.org/stable/2705530 |journal=International Organization |volume=18 |issue=4 |pages=766–789 |doi=10.1017/S0020818300025315 |issn=0020-8183 |jstor=2705530 |s2cid=153645652|url-access=subscription }}</ref> (The Special Fund was differentiated from EPTA by assisting public infrastructure rather than industrial projects.)

In 1959, a significant annual amendment to the Mutual Security Act declared that it was "a primary objective of the United States" to assist "the peoples of other lands who are striving to establish and develop politically independent and economically viable units".<ref name=":28">{{Cite web |title=Public Law 86-108, July 24,1959 |url=https://www.govinfo.gov/content/pkg/STATUTE-73/pdf/STATUTE-73-Pg246.pdf#page=1 |url-status=live |archive-url=https://web.archive.org/web/20200712130032/https://www.govinfo.gov/content/pkg/STATUTE-73/pdf/STATUTE-73-Pg246.pdf |archive-date=12 July 2020 |access-date=9 March 2021 |website=www.govinfo.gov}}</ref> This shifted the emphasis of U.S. economic aid away from immediate Cold War security needs, towards supporting the process of dismantling the empires of the UK, France and other European colonial powers. The amendment also made clear that Congress expected those industrialized nations which had been helped by U.S. aid to rebuild after the war would now share more of the burden of helping less-developed countries.<ref name=":28" />

Following on, the U.S. encouraged the Organisation for European Economic Cooperation (OEEC) to set up a Development Assistance Group (DAG) composed of the main donor states, in order to help coordinate their aid. This was done in January 1960. The following year the DAG adopted a "Resolution of the common aid effort", vowing to increase the volume of aid, and to share the task equitably. Shortly after this, the OEEC was succeeded by the [[OECD]], expanding its scope from Europe to the world, and embracing a particular concern with less-developed countries. The DAG became the [[Development Assistance Committee]] (DAC).<ref name=":29">{{Cite web |last=Führer |first=Helmut |date=1994 |title=The story of Official Development Assistance |url=https://www.oecd.org/dac/1896816.pdf |url-status=live |archive-url=https://web.archive.org/web/20130526011653/http://www.oecd.org/dac/1896816.pdf |archive-date=26 May 2013 |access-date=9 March 2021 |website=[[OECD]]}}</ref>

1960 also saw the creation of a multilateral institution to provide soft loans for development finance. The [[International Development Association]] (IDA) was created as part of the World Bank (over which the U.S. and other Western countries exerted more influence than they did over the UN).<ref>{{Cite web |title=History |url=https://ida.worldbank.org/about/history |url-status=live |archive-url=https://web.archive.org/web/20160422003753/http://ida.worldbank.org:80/about/history |archive-date=22 April 2016 |access-date=6 March 2021 |website=[[International Development Association]]}}</ref>

In 1961 several Western states established government departments or agencies to administer aid, including [[United States Agency for International Development|USAID]] in the United States.<ref name=":29" />

In 1960 the USA was providing half of all aid counted by the OECD. This proportion increased to 56% by 1965, but from 1965 to 1973 (the year of the [[1973 oil crisis|oil price crisis]]), the volume of U.S. aid generally declined in real terms (though it increased in nominal terms, due to inflation). The other OECD-DAC members meanwhile generally increased their aid, so that the total volume of OECD aid was fairly constant up to 1973.<ref>See chart on the right. Data from [https://stats.oecd.org OECD.Stat].</ref>