Editing Aid effectiveness (section)

==== 1945 – early 1970s: Post-war boom ====
Although US aid is widely credited with having hastened the reconstruction of western Europe after World War II, there have been doubts about the effectiveness of this aid. [[George Alexander Duncan|G. A. Duncan]] in 1950 deplored the governmental character of [[Marshall Plan|Marshall Aid]], arguing that private loans could have achieved the economic purposes more efficiently. He acknowledged that the provision of official aid also had other – political – purposes.<ref>{{Cite journal|last=Duncan|first=G. A.|date=1950|title=Marshall Aid|journal=Journal of the Statistical and Social Inquiry Society of Ireland|volume=18|pages=293}}</ref>

When US economic aid shifted from Europe to poorer countries – as initially signalled by [[Harry S. Truman|President Truman]] in [[Point Four Program|Point Four]] of his 1949 inauguration speech – the strategic framework was one of building a "free world" in the face of communist threat. In the 1950s, official US development assistance was mobilized alongside military aid within the [[Mutual Security Act|Mutual Security Program]].<ref>{{Cite journal|last=Haviland|first=H. Field|date=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|jstor=1951900 |s2cid=144564474 |issn=1537-5943|url-access=subscription}}</ref> A 1957 Senate Special Committee report admitted it was impossible to prove how effective US aid since World War II had been, but considered that, without it, several countries might have been lost to the [[Soviet Union|Soviet Union's]] sphere of influence.<ref>{{Cite book|last=US Senate Special Committee|title=Report of the special committee to study the foreign aid program|publisher=United States Government Printing Office|year=1957|pages=7–8}}</ref> For greater clarity in future, the committee attempted to distill the purposes of US aid into four:

* The defense need: aid could persuade and enable other nations to be military allies (important for maintaining air bases in distant parts of the world).
* The economic need: aid could bring more nations into a global system of commerce that would benefit the US.
* The political need: aid could be one factor (among many others needed) for helping countries to make "long-range political progress toward freedom" rather than totalitarianism.
* The humanitarian motive, which was seen in responding to "natural disasters or other unexpected conditions".<ref>{{Cite book|last=US Senate Special Committee|title=Report of the special committee to study the foreign aid program|publisher=United States Government Printing Office|year=1957|pages=8–10}}</ref>

The first of these aid drivers could be seen, during the Cold War, as part of a competition with the Soviet Union to win influence.<ref name=":6">{{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=72–73|doi=10.1017/S0034670500023731 |jstor=1405813 |s2cid=145492668 |issn=0034-6705|url-access=subscription}}</ref> But aid was often observed to fail in this respect; for instance, in the 1950s and 1960s Egypt and Afghanistan took aid from both sides without making a decisive commitment either way, and large Russian support to China and Indonesia did not prevent those countries' leaders turning against their former patron.<ref name=":6" />

A more detailed theory about the kinds of effect and the causal paths through which aid could be effective was developed by [[Max Millikan]] and [[Walt Whitman Rostow|Walt Rostow]] in the mid- to late-1950s, expressed in [[iarchive:proposalkeytoeff0000mill|"A Proposal"]] of 1956. This propounded that aid in the form of investment funds could promote the "take-off" of economies into self-reliant growth. It further suggested that this economic transformation, channeled properly, could produce a free and democratic type of society by providing: a constructive outlet for nationalism; a social solvent by interesting the urban elites in a dynamic agricultural sector; a stimulus for the emergence of authentic leaders; incentives for the attitudes of political responsibility needed to support democratisation; and feelings of international solidarity.<ref>{{Cite book|last=Millikan|first=Max F|title=A proposal: Key to an effective foreign policy|publisher=Harper & Brothers|year=1957|location=New York}}</ref> Rostow later elaborated the "take-off" theory of development in his more famous work, [[iarchive:stagesofeconomic00rost|"The Stages of Economic Growth"]], in which he stated that greatly increased economic aid was needed in order to outrace the effects of population growth.<ref>{{Cite book|last=Rostow|first=W. W.|title=The Stages of Economic Growth|publisher=Cambridge University Press|year=1962|pages=143}}</ref>

In 1966, [[Hollis B. Chenery|Hollis Chenery]] and Alan Strout published a still more sophisticated and influential macro-economic model of the way aid could boost development.<ref name=":7">{{Cite journal|last1=Chenery|first1=Hollis B.|last2=Strout|first2=Alan M.|date=1966|title=Foreign Assistance and Economic Development|url=https://www.jstor.org/stable/1813524|journal=The American Economic Review|volume=56|issue=4|pages=679–733|jstor=1813524 |issn=0002-8282}}</ref> It involved identifying for each country whether the bottlenecks to economic growth lay in the availability of skills, domestic savings, or export earnings. In this way, an appropriate mix of technical assistance, grants or loans could be decided. The focus was on achieving a target level of [[Gross national income|GNP]] growth, which helped consolidate this as the prime indicator of aid effectiveness. At this time Chenery and Strout pointed to the Philippines, Taiwan, Greece and Israel as examples of countries that seemed to have achieved self-sustaining growth rates with the help of aid.<ref name=":7" />