{ "id": "97-62", "type": "CRS Report", "typeId": "REPORTS", "number": "97-62", "active": false, "source": "EveryCRSReport.com", "versions": [ { "source": "EveryCRSReport.com", "id": 451701, "date": "1997-01-06", "retrieved": "2016-05-24T21:00:40.487941", "title": "The Marshall Plan: Design, Accomplishments, and Relevance to the Present", "summary": "

Periodically, Members of Congress and others have recommended establishment of a 'Marshall Plan' for Central America, Eastern Europe, the former Soviet Union, and elsewhere. They do so largely because the original Marshall Plan, a program of U.S. assistance to Europe during the period 1948-1951, is considered by many to have been the most effective ever of U.S. foreign aid programs. An effort to prevent the economic deterioration of Europe, expansion of communism, and stagnation of world trade, the Plan sought to stimulate European production, promote adoption of policies leading to stable economies, and take measures to increase trade among European countries and between Europe and the rest of the world. The Plan was a joint effort between the United States and Europe and among European nations working together. Prior to formulation of a program of assistance, the United States required that European nations agree on a financial proposal, including a plan of action committing Europe to take steps toward solution of its economic problems. The Truman Administration and the Congress worked together to formulate the European Recovery Program, which eventually provided roughly $13.3 billion of assistance to 16 countries. Two agencies implemented the program, the U.S. Economic Cooperation Administration (ECA) and the European-run Organization for European Economic Cooperation. The latter helped insure that participants fulfilled their joint obligations to adopt policies encouraging trade and increased production. The ECA provided dollar assistance to Europe to purchase commodities -- food, fuel, and machinery -- and leveraged funds for specific projects, especially those to develop and rehabilitate infrastructure. It also provided technical assistance to promote productivity, guaranties to encourage U.S. private investment, and approved the use of local currency matching funds. At the completion of the Marshall Plan period, European agricultural and industrial production were markedly higher, the balance of trade and related \"dollar gap\" much improved, and significant steps had been taken toward trade liberalization and economic integration. The Plan had contributed to more positive morale in Europe and to political and economic stability which helped diminish the strength of domestic communist parties. The U.S. political and economic role in Europe was enhanced and U.S. trade with Europe boosted. Although the Plan has its critics, many observers believe there are lessons to be learned from the effort that are applicable to present foreign aid programs. However, the extent of the Plan's replicability is subject to question. Central Europe and the former Soviet Union may most closely fit the mold of war-devastated Western Europe, but the vast differences in economic systems and environmental burden left by communist regimes, among other factors, show up the distinctions between 1947 Europe and the present. Undertaking an effort equivalent to the original would be an enormous task costing $88 billion in current dollars.

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