The United States government provides tangible and intangible varieties of aid or assistance to several foreign countries and organizations. While this aid is primarily distributed with the goal of advancing the country's national security and commercial interests, it has also bolstered humanitarian causes around the world. The funding for these foreign aid programs comes from American taxpayers and other appropriated revenue sources as assessed by Congress on an annual basis through the United States budget process. It is dispersed through "over 20 U.S. government agencies that manage foreign assistance programs," although about half of all economic assistance is channeled through the United States Agency for International Development (USAID).
Historically, countries of strategic importance to the United States are regularly destined for United States foreign aid. Today, the vast majority of recipients of United States foreign aid are developing countries and countries recovering from war or disaster. Foreign aid as employed by the United States serves three basic functions—to provide security, developmental, and humanitarian assistance. While the United States has given aid to other countries since 1812, it was not until World War II that these efforts expanded to become a sustained part of government policy, as attested by the Marshall Plan (1948) and the Mutual Security Act (1951), which were the largest foreign aid programs of the post-war period. The current United States foreign aid spending system was implemented in 1961.
Quantitatively, United States foreign aid is more than that of any country in the world, though as a percentage of GDP, it ranks nearly last in a comparison with foreign aid spending by other developed countries.
Foreign aid typically receives bipartisan support in Congress because it is seen as an effective method of promoting global economic development under the United States sphere of influence, thereby promoting national security. Conversely, it is deeply unpopular among the American public, possibly due in part to the spread of inflated figures for the scale of government spending on foreign aid programs.
History
Earliest instances One of the earliest and least known instances of US foreign aid is also a good example of how aid has a long history of being used as a tool of foreign policy. On May 6, 1812, despite continued hostilities over independence from British colonial rule, US senator from Kentucky Henry Clay submitted a bill appropriating $50,000 for disaster relief food aid to Venezuela after a massive earthquake devastated the capitol, Caracas, that was enacted on May 8 by the 12th Congress (Chap. LXXIX). Coincidentally, Venezuela was also fighting a war for independence from Spanish colonial rule, from 1810 to 1823. The food aid was accompanied by diplomat Alexander Scott, who stated that this aid was "strong proof of the friendship and interest which the United States…has in their welfare…and to explain the mutual advantages of commerce with the United States." A case may be made that some motivation for this act of generosity was diplomatic (i.e.: transactional) in nature, insofar as that both nations were seeking diplomatic recognition as sovereign from colonizers, and that this gesture would elicit such a desired reciprocal response. Later, in 1927, the US Congress appropriated $41,000 for the creation and transportation of a statue in Henry Clay's likeness to be erected in Caracas, where by all accounts it remains to this day, memorializing Clay as a symbol of US generosity abroad.
World War I During World War I, the Commission for Relief in Belgium (CRB), which sent food to the hungry in Belgium, received $387 million from the U.S. government (as well as $314 million from the British and French governments and about $200 million from non-governmental sources). These government monies were given in the form of loans, but a considerable portion of those loans was forgiven.Annotated CRB documents , retrieved September 2009. The U.S. aid commenced after April 1917; Britain had been contributing since 1914. The amounts contributed by the governments are from the table near the beginning of the web page. 200 million is calculated as 22 percent (100 – 78 percent) of the 900 million distributed by the committee (mentioned in the discussion preceding the table).
After the war, the American Relief Administration, directed by Herbert Hoover who had also been prominent in the CRB, continued food distribution to war-devastated European countries. It also distributed food and combated typhus in the Russian Soviet Federative Socialist Republic during its famine of 1921–23. The U.S. Congress appropriated $20 million for the ARA under the Russian Famine Relief Act of 1921.
World War II Levels of United States aid increased greatly during World War II, mainly on account of the Lend-lease program. United States government aid remained high in the decade after the war because of contributions to European reconstruction, and competition for influence versus the Communist powers in the first years of the Cold War. By 1960, the annual aid amount had receded to about half of what it was in the early post-war years, and, in inflation-adjusted terms, it has remained at that level—with some fluctuations—until the present.This paragraph refers to inflation-adjusted ("constant-dollar") levels. Generally, the other data in this section is in historical dollars. USAID, Greenbook, interactive version, "Program Reports"; then selecting "Custom Report" allows you to get data going back to 1946. Retrieved September 2009.
The Lend-lease program, which began in 1941 (before the U.S. entrance in the war) was an arrangement whereby the United States sent large amounts of war materials and other supplies to nations whose defense was considered vital to the defense of the United States. It began with the passage by Congress of the Lend-lease act (PL 77-11) on 11 March 1941.United States government (ourdocuments.gov), Lend-Lease Act (1941), essay about the Act , and transcript of the Act . Retrieved September 2009. Initially, the main recipient was the United Kingdom; the Soviet Union began receiving supplies (paid for in gold) in June 1941 outside of Lend-lease, and was included in the Lend-lease agreement in November 1941. By the end of the war, most of the Allied countries had been declared eligible for Lend-lease aid, although not all received it. By the time the program was ended by President Harry S. Truman in August 1945, more than $50 billion worth of supplies had been disbursed, of which the Commonwealth countries received $31 billion and the Soviet Union $11 billion. Although formally the material was loaned, in the end only partial repayment was demanded.
A second wartime aid program, the United Nations Relief and Rehabilitation Administration (UNRRA), was founded in November 1943, by 44 Allied governments, for the purpose of assisting and resettling displaced victims of the war.Although the UNRRA was called a "United Nations" agency, it was established prior to the founding of the United Nations. The explanation for this is that the term 'United Nations' was used at the time to refer to the Allies of World War II, having been originally coined for that purpose by Roosevelt in 1942. Its initial focus was on assisting people in areas the Allies had captured from the Axis powers: distributing food, clothing and other essentials, and helping with medical care and sanitation. Later it also assisted in the resumption of agriculture and industry. Each of the 44 signatories was supposed to contribute one percent of its national income.Assisting the victims of war: 'nations will learn to work together only by actually working together.' (United Nations Relief and Rehabilitation Administration). U.N. Publications, 1994. The chief beneficiaries were China, Czechoslovakia, Greece, Italy, Poland, the Ukrainian SSR and Yugoslavia. UNRRA returned about 7 million displaced people to their countries of origin and provided refugee camps for about one million who were unwilling to be repatriated. UNRRA ceased operations in Europe in mid-1947;United Nations, Assisting the victims of war ..., op cit., says the UNRRA decided on 16 August 1947 to liquidate itself, "a process completed in 1948;" Infoplease (Columbia Encyclopedia), "United Nations Relief and Rehabilitatin Administration" , says UNRRA discontinued its operations in Europe on 30 June 1947. some of its activities in Asia continued under other auspices until early 1949. In the end 52 countries had contributed as donors. Contributions from governments and private organizations during the four years of the program totaled over $3.8 billion; more than half of that was from the United States.
Cold War After the war, the United States began giving large amounts of aid to Greece and Turkey under the Truman Doctrine. Both countries were experiencing civil strife between communist and anti-communist factions, and the President and his advisors feared that their efforts to keep European countries from adopting communism might be about to suffer a serious setback. In December 1946, Greek Prime Minister Konstantinos Tsaldaris visited Washington and requested additional United States aid. Truman promulgated his containment doctrine in early 1947, a major component of which was to be aid to the world's poor countries in order to blunt the appeals of radicalism to their hungry peoples and to bolster their anti-communist political elements. In May 1947 the U.S. government granted Greece $300 million in military and economic aid. Turkey received $100 million. The U.S. government gave Greece $362 million in 1949, and U.S. aid to Greece generally remained over $100 million annually until 1998.These amounts are in historical (not inflation-adjusted) dollars. USAID, Greenbook Historical query , select Country Reports >> Greece, Custom Report >> the data you want, and the year (Ctrl+A selects all years). Retrieved September 2009. Also, Time Magazine, "Greece: The Poly-Papadopoulos", 3 April 1972; retrieved September 2009. After the Chinese Civil War and the Korean War, U.S. military aid both to Europe and the developing "Third World" increased, with military aid composing 95 percent of all U.S. aid by 1954 and going largely to countries in Cold War proxy conflicts against communist forces.