During the Cold War
The Truman Doctrine of the same year provided aid to Greece in its struggle against Communist guerrillas, and to Turkey, which was under pressure from the Soviet Union. Later, with the escalation of the cold war, U.S. foreign aid to Western Europe shifted from economic to military assistance to members of North Atlantic Treaty Organization. Concurrently, the increasing needs of the underdeveloped nations led to President Truman's Point Four program. From the time of the Korean War, defense became the umbrella for most forms of U.S. foreign assistance. The administration of aid was centralized under the Mutual Security Agency, an executive agency in the office of the President. During the early 1950s surplus agricultural commodities, accumulated under domestic price-support programs, became available as an additional source of aid: the Food for Peace program. In 1955 responsibility for foreign aid was returned to the Dept. of State when the International Cooperation Administration was established. Military aid was administered by the Dept. of Defense.
Aid, as administered under Presidents Reagan and G. H. W. Bush, was increasingly used to promote American investment, national interests, and market economies, but its main impetus was to protect other nations from Communist influence. In the early 1950s the Soviet Union began a program of technical and economic aid to the underdeveloped nations. Soviet aid, over $6 billion by 1966, was generally low-interest loans, industrial equipment on credit with technical assistance, and long-term commodity purchase agreements. Begun in 1955, it was discontinued with the collapse of the Soviet Union. Since then, the American rationale for foreign aid has become politically more vulnerable.
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