The Roles of Aid in Politics Putting China in Perspective

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Ruttan, Vernon W. (1989), “Why Foreign Economic Assistance?” in Economic Development and Cultural Change, Vol. 37, No. 2, pp. 411-424.

The first conclusion that emerges from this review is the weakness of the self-interest argument for foreign assistance. The individual (or group) self-interest arguments, after careful examination, often represent a hidden agenda for domestic rather than international resource transfers. The political “realists” have not been able, or have not thought it worthwhile, to demonstrate the presumed political and security benefits from the strategic assistance component of the aid budget. Rawlsian contractarian theory does provide a basis for ethical responsibility toward the poor in poor countries that goes beyond the traditional religious and moral obligations of charity. It also provides a basis for making judgments about the degree of inequality that is ethically acceptable.

But the contractarian argument cannot stand by itself. Its credibility is weakened if, in fact, the transfers do not achieve the desired consequences. Failures of analysis or design can produce worse consequences than if no assistance had been undertaken.51 There is no obligation to transfer resources that do not generate either immediate welfare gains or growth in the capacity of poor states to meet the needs of their citizens. It becomes important, therefore, to evaluate the consequences of development assistance and to consider the policy interventions that can lead to more effective development assistance programs.

Since the 1950s our understanding of the development process has made major advances. But we can never fully understand the consequences of any assistance activity or of intervention into complex and interdependent social systems. Our limited knowledge about how to give and use aid to contribute most effectively to development does not, however, protect us from an obligation to assess the consequences of our strategic or development assistance and to advance our capacity to understand the role of external assistance in the development process.

Ruttan, Vernon (1996), “The Domestic Sources of Foreign Assistance Policy,” in Ruttan, Vernon, United States Development Assistance Policy: The Domestic Politics of Foreign Economic Aid, pp. 1-18, Baltimore: Johns Hopkins University Press.

My basic premise in approaching the study of U.S. foreign economic assistance policy is that domestic sources have been more important in determining the size and direction of assistance than has the international economic and political environment the assistance is intended to influence. In this chapter I have outlined a three-level context in which to test this premise against the history of U.S. development assistance policy.

At the macropolitical level I emphasize the persistent aspects of U.S. political culture: the tendency to vacillate between the two offspring of American exceptionalism – the liberal doctrine, which emphasizes cooperation in international relations, and the realist doctrine, which emphasizes the need for political dominance by the United States. At the policy formation level, I emphasize the role of American economic and political power, a reactive style of policy formation, and popular anticommunist ideology. At the micropolitical level – the level of program direction and design – I emphasize the role of the several constituencies and interest groups that bring their influence to bear on the process of policy formation and program design and project administration. In subsequent chapters I assess the role of these domestic macro- and micropolitical factors they impinge on the actors or agents involved in assistance policy formation and program design.

Ruttan, Vernon (1996), “Economic Assistance for Strategic Objectives,” in Ruttan, Vernon, United States Development Assistance Policy: The Domestic Politics of Foreign Economic Aid, pp. 253-332, Baltimore: Johns Hopkins University Press.

Activities programmed under the ESF budget declined steadily after the mid-1980s (Chap. 7). The growth of the ESF during the late 1970s and early 1980s reflected, in large part, the more activist approach of the late Carter and Reagan administrations to contain actual and presumed Soviet political penetration of Southwest Asia, Central America, and Africa. It also reflected an effort to circumvent what the administration viewed as excessive congressional earmarking of resources allocated under development assistance in the foreign aid budget. One effect of the dramatic increase in the number of countries that received ESF aid was to erode the separate rationale of the development assistance and ESF programs. The collapse of the Soviet empire further weakened the rationale of economic assistance for strategic purposes. In draft legislation submitted to Congress late in 1993, the Clinton administration proposed eliminating ESF as a separate item in the AID budget. But elimination of ESF as a budget item will not eliminate the use of economic assistance for strategic purposes.

What lessons should be drawn from the history of economic assistance for strategic purposes? The lesson from earlier experience in Latin America, Western Europe, Greece, China, and Korea did not provide useful guides to our experience in Vietnam. Nor have the lessons that were drawn from Vietnam protected the United States from devoting excessive resources to the defense of presumed national interests in other areas of little strategic significance, such as Nicaragua and El Salvador. The lesson from assistance to Egypt – that economic assistance to strategically important countries typically produces little in the way of economic development – had been learned earlier in Turkey. The lesson that we have learned from assistance to Israel is that domestic political pressure can be mobilized to force an allocation of assistance resources that are clearly inconsistent with an incumbent administration’s definitions of broader U.S. strategic interests. One of the most difficult lessons to accept from the history of economic assistance for strategic purposes is that, in the area of foreign policy, American presidents and their senior advisors cannot be expected to be honest with the American people or their representatives in Congress.229 Each president from Eisenhower to Nixon tried to plant both feet firmly on both sides of the Vietnamese issue, promising to minimize American commitment to Vietnam while exaggerating the significance of Vietnam to American society. And each president since Eisenhower shamelessly lied to Congress and the American people about the commitments being made in Vietnam. Peace proposals were advanced with the objective of sustaining domestic support for the war rather than with any realistic expectation that they could be accepted by North Vietnam. The art of dissembling to the public and to Congress was practiced with particular skill and deliberation by Henry Kissinger during his term as national security adviser and as secretary of state. It was practiced with at least as much deliberation, but with somewhat less skill, by President Reagan and his national security staff in defending U.S. policy toward Nicaragua and El Salvador and during the Iran-Contra controversy.

The acceptance of this practice by the establishment press has been particularly disturbing. Joseph Kraft of the New York Times commented about Kissinger, “While he almost certainly lied, the untruths are matters of little consequence when weighted against his service to the state.” I cannot be so generous as Kraft. Lack of honesty in dealing with the American people destroys the credibility of the policies that are being advanced and of the institutions the policies are designed to protect. I am not able to go as far as the iconoclastic journalist I. F. Stone, “Every government is run by liars, and nothing they say should be believed.”230 But I do insist that we have been taught to look behind every policy pronouncement – to ask not what was said but why it was said.

The failure to deal openly with the American people and with Congress on issues of national security has been costly. In his introduction to the Tower commission report, R. W. Apple argued that “Lyndon B. Johnson was shouldered into retirement by massive disenchantment with the war in Vietnam. Richard M. Nixon was sunk by Watergate and resigned in the face of probable impeachment. Gerald R. Ford was doomed by the pardoning of his predecessor. Jimmy Carter ran aground on the shoals of Iran.”231 From the perspective of the mid-1990s, one might add that Ronald Reagan’s incapacity for governance was revealed by the Iran-Contra affair and that the legacy of George Bush’s presidency was severely tarnished by his failure to dislodge Saddam Hussain from power in concluding the 1990-91 war with Iraq and by his effort to deflect attention from his role in the Iran-Contra affair.

I see little hope, however, that the lessons from the past will provide substantial guidelines in considering the use of economic assistance in a post-Cold War environment. The power of the American government to act in the national interest is so influenced by parochial interests and by cycles in popular sentiment that the capacity to pursue longer-term national interests lies effectively outside the competence of those charged with the shaping and execution of foreign policy.

I argued earlier that the tendency to vacillate between the two offspring of American exceptionalism – between idealist and realist doctrine – has been a persistent aspect of U.S. political culture (Chap. 2). The tension between these two poles has been a continuing theme in the political dialogue on economic assistance for strategic purposes. Liberal politicians and their constituents have found it difficult to support economic assistance that could not be rationalized in terms of the well-being of aid recipients. Conservatives have typically insisted that economic assistance be justified in terms of U.S. economic or strategic self-interest.

From the end of World War II to the mid-1960s, liberals found it easy to support foreign economic assistance because of a presumed convergence between moral purpose and strategic interest; a more prosperous world would also be a safer world. In contrast, conservatives typically opposed foreign assistance. They could find little political or ethical justification for taxing Americans to do good for foreigners (Chap. 2).

By the late 1960s positions had reversed. Liberals found the moral costs of the Vietnamese war – the human and material costs to both Vietnam and the United States – too large to continue to rationalize when measured against the limited strategic value of South Vietnam to the United States. In contrast, conservatives came to view success, or at least “peace with honor,” in Vietnam as a test of America’s credibility in its effort to contain communism. By the 1980s, this same test was being applied in Nicaragua and El Salvador.

By the 1980s liberal and conservative roles again began to reverse positions.232 In the 1992 presidential campaign, there were calls by conservatives, in both the Republican and the Democratic parties, for disengagement from international responsibilities. But the breakup of the Soviet empire, followed by an eruption of genocide in former Yugoslavia, and the breakdown of civil order in Somalia provided a moral rationale, acceptable to liberals and even some conservatives, for humanitarian assistance to parts of the world of little economic or strategic value to the United States.

It is now time for the United States to undertake a thoroughgoing reassessment of its strategic interests in a post-Cold War world and of the use of economic assistance for strategic purposes. I argued earlier (Chap. 2) that ethical considerations require, at a minimum, that foreign assistance do no harm to recipients. The history of our use of economic assistance for strategic purposes suggests that this minimum criterion has seldom been met when U.S. assistance has been given for strategic purposes.

Schraeder, Peter J., Hook, Steven W. and Taylor, Bruce (1998), “Clarifying the Foreign Aid Puzzle: A Comparison of American, Japanese, French, and Swedish Aid Flows,” in World Politics, Vol. 50, No. 2, pp. 294–323.

The cross-national analysis clearly demonstrates that the origins of the foreign aid policies of the northern industrialized democracies are complex and varied. Despite the fact that the four donor states under review maintained shared democratic values and a common industrial base of development, notable differences as concerns historical backgrounds (for example, French colonialism in Africa) and positions within the international system (for example, the U.S. as a strategic hegemon and Sweden as a middle power) ensured that foreign aid policies were influenced by different combinations of foreign policy interests. No two cases were alike, a fact that reinforces the need for detailed scrutiny of the individual cases.

Yet empirical patterns that emerged in three of our four cases allow us to draw some general conclusions about the nature of the foreign aid regime of the final cold war decade. First, the results clearly reject the rhetorical statements of policymakers within the industrialized North who publicly assert that foreign aid is an altruistic tool of foreign policy. Rather than demonstrating a positive relationship between foreign aid and recipient social-welfare factors, our findings discounted the role of humanitarian need in the aid policies of these industrialized democracies. In the cases of France, Japan, and the United States, the fact that foreign aid does not stem from altruism is hardly a new finding –despite vigorous past efforts on the part of French, Japanese, and American policy makers to project such an image abroad. Indeed, in the case of Japan, aid was targeted toward countries with relatively high levels of life expectancy, the opposite of what one would expect if humanitarian interests were operative. However, the lack of a relationship between foreign aid levels and humanitarian need in the case of Sweden cast doubt on the preponderant view that Sweden and other middle powers, most notably Canada and the other Nordic countries, were exceptional in this regard. Specifically, our findings call for a thorough reexamination of the prevailing assumption within the aid community that the Nordic countries and other middle powers maintained a unique, humanitarian based set of policies within the foreign aid regime of the 1980s.67

The second cross-national trend confirmed that ideology played an important role in the foreign aid regime of the 1980s. In the American, Japanese, and Swedish cases, there existed a positive relationship between foreign aid levels and the ideological posture of African regimes. Whereas U.S. foreign aid policies were targeted toward capitalist regimes willing to support Washington's containment policies, Swedish policymakers were particularly interested in strengthening like-minded progressive regimes in Southern African and Japanese aid policies favored capitalist over Marxist regimes. The French case emerged as an anomaly. Yet despite the fact that ideological factors as conceptualized in this study ultimately did not influence French policies toward Africa, French policymakers approached the necessity of ensuring the spread of French culture with the same ideological fervor adopted by U.S. policymakers to prevent the spread of communism during the cold war era. In this regard, la francophonie could be characterized as a culturally based ideology that strongly influenced all other French interests in Africa.

A related yet less pervasive cross-national trend was the importance of strategic interests in the foreign aid regime of the 1980s. As correctly surmised in the qualitative case study literature, neither Japanese nor Swedish policymakers based their foreign aid policies on the strategic importance of recipient states, although Japan did pursue a foreign aid relationship with Tanzania based not on economic self-interest but on calculations of Tanzania’s regional diplomatic influence. Only among American and French policymakers – representing states with aspirations to global political leadership – did security interests play an important role in foreign aid calculations. In the case of the U.S., these pretensions emerged in the form of security alliances with strategic allies willing to join Washington in its quest to contain communist and revolutionary expansion throughout Africa. In the case of France, aid supported growing local military forces designed to keep pro-French elites in power and therefore ensure continuation of the status quo.

A fourth cross-national trend evident in all four cases was a negative relationship between aid levels and GNP per capita, clearly rejecting the expectation that northern donors favored those recipients that represented the most powerful economies in their region. Taken at face value, these results could be interpreted as verifying the importance of humanitarian need in the calculations of foreign aid administrators. Specifically, although GNP per capita is utilized as an economic variable, its inclusion as a humanitarian interest variable could suggest that aid has been targeted toward the neediest countries (that is, those with a low GNP per capita). However, a careful reading of the case study literatures and a comprehensive view of the statistical relationships suggest that factors other than humanitarian need explain this possibility. In the case of the U.S., for example, the top recipients of U.S. foreign aid were anticommunist, authoritarian regimes that, like those regimes supported by Japan, France, and Sweden (albeit for different reasons), were confronted with the ongoing deterioration of economies marked by corruption and the negative repercussions of externally imposed structural adjustment policies.68

Perhaps the most surprising cross-national trend was the emergence of trade as an important determinant of northern aid policies. Whereas this result was anticipated in the case of Japan, it clearly confounded the conventional wisdom concerning American and Swedish foreign aid policies. However, when one focuses on the evolution of domestic politics in each of our four cases during what was earlier referred to as the “hinge” decade of the 1980s, the emergence of trade interests in retrospect is more understandable. Even with Sweden, long recognized by foreign aid opponents and proponents alike as a special case within the global foreign aid regime, increasingly vocal domestic actors were demanding a positive linkage between foreign aid and the promotion of the Swedish economy, most notably in terms of trade. According to the OECD, this trend was prevalent throughout the industrialized northern democracies by the end of the 1980s.69 In this regard, the end of the cold war merely laid bare the growing importance of trade in a foreign aid regime that was already being readjusted to meet the new economic challenges of the 1990s.

The findings of this study not only help to clarify the foreign aid regime of the 1980s but also provide us with a base from which to undertake further analyses of earlier cold war decades and particularly the post-cold war decade of the 1990s. For example, the decline of the majority of Marxist and socialist regimes throughout the African continent in the aftermath of the fall of the Berlin Wall in 1989 will almost certainly lessen the impact of the role of ideology in foreign aid calculations, most notably in the cases of the U.S. and Sweden. In the case of France, the devaluation of the CFA franc in 1994 – the first such devaluation since the creation of the Franc Zone – perhaps suggests a decline in the overriding importance of culture and the beginning of greater French concern with economic issues in an increasingly competitive post-cold war economic environment. One would therefore expect trade interests to become more salient in French foreign aid calculations during the 1990s. Indeed, it is likely that the statistical importance of trade as seen during the 1980s – regardless of whether this decade was unique during the cold war era or constituted part of an ongoing trend – will intensify in the post-cold war era.

A final note is required concerning the generalizability of our results beyond the African subset of the global donor-recipient foreign aid regime. Our study was based on the assumption that countries constituting a specific region such as Africa share certain characteristics that differentiate that subsystem from other geographical regions and therefore potentially affect northern aid policies differently. For example, will the interests driving French policy be different if the region of analysis (for example, Central America) is not part of what France historically has considered to be part of its African chasse gardée (private hunting ground)? Similarly, will U.S. policy be driven by different interests if, rather than focusing on a region considered peripheral to U.S. foreign policy interests (for example, Africa), the region of analysis constitutes part of what those policymakers historically have considered to be part of the U.S. backyard (for example, Central America and the Caribbean)? Definitive answers to these questions will be possible only when further empirical research focuses on donor-recipient relations in other regions of the developing South during both the cold war and post cold war eras.

Schraeder, Peter J. (2001), ‘‘‘Forget the Rhetoric and Boost the Geopolitics’: Emerging Trends in the Bush Administration’s Policy Towards Africa 2001,” in African Affairs, Vol.100, pp. 387-404.

This article assesses the Bush administration's self‐proclaimed ‘realist’ policy towards Africa, the essential thrust of which is captured by the motto: ‘Forget the rhetoric and boost the geopolitics’. Three essential elements of this approach include the strategic imperative of cultivating strong links with Africa's leading regional powers, most notably Nigeria and South Africa, harkening back to the Nixon administration's strategy of relying on such powers to ensure regional stability; building upon the Clinton administration's success in promoting US trade and investment with African countries, with a special focus on oil‐producing countries; and underscoring the need for Africans to ‘do more for themselves’ in the realm of conflict resolution, suggesting a low‐profile Bush administration approach to involvement in either peacekeeping or peacemaking operations. Emerging trends are analyzed by treating the US policymaking establishment as a series of three concentric circles: the inner circle of the White House; a second circle comprising the bureaucracies of the executive branch; and an outer circle inclusive of the US Congress and the larger African affairs constituency. An important result of White House and Congressional neglect of Africa is that the Bush administration's foreign policy towards Africa, perhaps more so than that directed towards any other region of the world, essentially will be delegated to the high‐level bureaucrats and political appointees within the executive branch, leading to an outcome best characterized as ‘bureaucratic incrementalism’ in which continuity rather than change will mark the administration's policies towards Africa.

Schweinberger, Albert G. and Lahiri, Sajal (2006), “On the Provision of Official and Private Foreign Aid: A Political Economy Approach,” in Journal of Development Economics, Vol. 80, No.1, pp. 179–197.

The main purpose has been to explain the striking differences in the provision of official relative to private aid among donor countries. To this end we have developed a political–economic model of official and private aid provision. To endogenize the public provision of foreign aid we have made use of a political support function. Also we assume – except in Section 5 – that a group of households is not altruistic toward the recipients. Furthermore we allow for the fact that government may not be able to credibly commit itself to a certain level of foreign aid.

One of the key features of our model is that an increase in the income tax rate creates a conflict of interest between donors and non-donors: the welfare of the donor households rises and the welfare of the non-donors falls. Private foreign aid is reduced and therefore there is an increase in the underprovision from the donors' point of view. This decline implies, ceteris paribus, a decline in the welfare of donors. However there is also a transfer effect, i.e. an implicit transfer of income from the non-donors to the donors. In our model the latter positive effect on donor's welfare dominates the negative crowding out effect.

Initially we treat official aid exogenously and derive several ‘crowding out’ results in the sense that an increase in official aid reduces private aid (see Section 2). These preliminary results enable us to integrate our approach with the received literature on the official and private provision of public goods. They also appear to be relevant to the explanation of the differences between official and private aid provision in countries such as Japan and the USA. We generalize the main results of our benchmark model in three directions: (a) we allow for official aid from a third country, (b) the assumption that official and private aid are perfect substitutes is relaxed and (c) we drop the assumption that the utility functions of the donor households are separable in consumption expenditure and aid provision.

We proceed to endogenize official foreign aid in Section 2.2. Proposition 1 in Section 2 represents our first main result. We show that, contrary to intuition, total aid provision is lower in a country where the government can credibly commit itself to official aid. In deriving Propositions 3 and 4) we treat the government and the donor households as players in a simultaneous game. The effect of differences in country size and household composition on total aid and official aid raised from each household is analyzed. It is shown, for example, that in more populous countries official aid raised from each household is lower than in less populous countries. Proposition 3 and 4 can explain differences in the provision of official aid raised from each household in large countries such as the USA and Japan on the one hand and smaller economies such as the Scandinavian countries on the other hand. It can also explain the fact that the five countries which provided (per one million of inhabitants) more than one hundred million US dollars of total foreign aid in 1998 are all relatively small countries: Denmark, Norway, Luxembourg, Sweden and the Netherlands.

In Section 4 we allow for the provision of official foreign aid from a third country (see Proposition 5). It is shown that official foreign aid from a third country crowds out official foreign aid from the home country. If the number of non-donor households is relatively large there may even be a crowding out of private aid.

Proposition 6 of Section 5 focuses on differences in the distribution of income between the two donor types in different countries as a ‘cause’ for different levels of total aid provision. In this section, we allow the non-donors to be altruistic as well, and the fact that they are non-donors is treated endogenously. We derive a counterintuitive result: if the distribution of income favors the more altruistic household total aid is lower. This again appears to be relevant to a comparison of aid provision between countries like the USA and Sweden.

In our view the modeling framework put forward in this paper could be extended in three directions. First, one should allow for the disincentive effects of income taxation. Second, one may argue that warm glow effects are important; i.e., that an increase in the contribution per se increases the utility of the donors because of ‘joy of giving.’ Third, one could allow for the interaction of official aid provision between two or more donor countries by endogenizing the provision of official foreign aid making use of political support functions. The latter may, of course, be different in the various donor countries.

Sewell, John and Mathieson, John (1982), “The United States and the Third World,” in Cassen, Robert, Jolly, Richard, Sewell, John, and Wood, Robert (eds.) Rich Country Interests and Third World Development, pp. 41-93, London: Croom Helm.

At the beginning of the 1980s, America’s relations with the developing countries seem to have come almost full circle since the 1950s. Over the past three decades, US policies towards the countries that comprise the Third World have gone through several phases. First there was a concern with alliances and aid designed to ‘contain’ the Soviet Union. In the 1960s the emphasis shifted towards ‘nation-building’ and winning the ‘hearts and minds’ of people in the Third World. The 1970s was a period of relative neglect as the United States focused on domestic problems, tempered only by a dawning awareness of dependence on certain countries – most notably for petroleum – and a sense that ‘interdependence’ was strengthening the links between developed and developing countries and at the same time making conduct of American foreign policy more difficult. Most recently the primary concern seems to have swung back to the activities of the Soviet Union and its allies.

The Regan Administration, which came into office committed to restoring America’s relative economic and military power and pursuing America’s national interests vigorously overseas, has been slow to define its policies towards the developing countries. Renewed worries over the strategic intentions and military capability of the Soviet Union is dominant along with growing anxiety about US resource dependence, most marked in the case of oil, but not negligible in the case of some other raw materials. Once again the developing countries are viewed largely as an arena for East-West competition reminiscent of the Cold War era, as a drain on scarce US budgetary resources, and as potentially unstable sources of key materials needed in the United States.

The preparation for participation in the Cancun summit provided the stimulus that helped the Regan Administration develop its basic approach towards development issues and US-Third World relations. This approach, essentially a variant of the administration’s domestic programs, attaches great importance to the role of the private sector as opposed to government and lays great stress on the need for developing countries to adopt a proper set of domestic policies, rather than to attempt to change the rules of the international economic game. Within this framework, efforts to inaugurate global negotiations on North-South economic issues are viewed great scepticism by the Administration, as is the possibility of new government initiatives, whether bilateral or multilateral, to improve the economic prospects of the developing countries. By the end of 1981, however, the Regan Administration’s approach still lacked specifics and many issues remained to be decided.

Yet the world in which these ‘new’ concerns are being addressed is very different from the bipolar world of the 1950s and the 1960s, in which US economic and political pre-eminence as well as military power was unmatched. The position of the United States in the world’s economy has changed considerably. The US now shares its formerly dominant position in the world economy not only with the other industrial countries, which have greatly increased their economic competitiveness in the post-Second World War period, but also with a number of developing countries that have emerged in recent years as major actors in international economic transactions. As a corollary development, the United States is no longer immune to external economic shocks. Floating exchange rates, import penetration, commodity shortages (with resulting inflationary pressures) and oil price rises have all signalled the end of the relative economic independence of the United States. These developments have in turn given rise to a growing unease among many Americans.

Moreover, most industrial nations are now beset with a combination of slow growth, high unemployment and high inflation, and only marginal improvements in economic performance can be anticipated. Most economists agree that a return to the historically spectacular growth rates experienced by much of the world in the 1950s and 1960s is unlikely at least for the first half of this decade. In this environment – and particularly in the absence of greater co-operation – the prospects for dampened growth in trade (along with increasing pressures for restrictions), continued financial imbalances and instability and uncertainties in the supply price of major commodities such as food and oil.

The international system has also become far more complex because of the greatly increased number of nations which are asserting […] in effect designed by only two countries, the United States and the United Kingdom, and for several decades was managed almost exclusively by the United States. In contrast, the Law of the Sea negotiations include representatives of 154 independent countries. In 1959 there were only 92 independent countries; by the beginning of the 1980s, the number of independent countries had grown to 164, and all of the new entrants were developing countries. These numbers alone could complicate management of any international problem, but in addition, the actions of the developing countries, in some cases individually and certainly collectively, now can affect the interests of the United States in significant ways.

The developing have for some time called for reforms in international economic and political systems, which are seen by the Third World nations to be providing inequitable representation and opportunity. Their proposals – referred to as the ‘New International Economic Order’ – call for comprehensive changes in existing rules and institutions, and are being advanced in practically every international meeting and forum. One of the remarkable features of the 1970s was the surprising unity of the developing countries in pressing for these changes despite their disparate levels of economic and social development.

The historic ‘North-South’ summit meeting of the leaders of the governments of 22 developed and developing countries who met at Cancun, Mexico in October 1981 underlines the new importance of relations between the rich and poor countries and sets the stage for a reassessment of American relations with the Third World. American policy-makers, and those concerned with US foreign policy, therefore need to identify US economic as well as political and strategic interests in the development of the Third World nations and US relations with them, in light of the changes that have taken place over the last three decades both in the developing world and in the international environment in which those relations will be carried out. This paper is designed to contribute to that process.

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