Skip to content

How foreign aid was invented by accident

Truman’s Inaugural Address on January 20, 1949 is usually taken as the beginning of foreign aid, after it included these stirring words:

Fourth, we must embark on a bold new program for making the benefits of our scientific advances and industrial progress available for the improvement and growth of underdeveloped areas…More than half the people of the world are living in conditions approaching misery….For the first time in history, humanity possesses the knowledge and the skill to relieve the suffering of these people….  And…we should foster capital investment in areas needing development.…this program can greatly increase the industrial activity in other nations and can raise substantially their standards of living.

Foreign Aid was at first referred to as the Point Four program because it was the 4th point in the speech. I recently stumbled across an old article by a participant in the 1949 events, Louis J. Halle.[1]

The events were roughly these. Halle worked for the State Department and one evening in 1948 had a conversation with the Deputy Director of American Republic Affairs (DDARA) about a program of technical assistance that only covered Latin America. The two agreed something similar could possibly be useful other places.

In November 1948, the President’s speech-writing assistant asked the State Department for some proposals to include in the Inaugural Address. A meeting happened and they came up with three proposals. The Director of Public Affairs called for additional ideas. The DDARA remembered the evening conversation and said something like “how about a program of technical assistance for undeveloped countries, like that in Latin America?” The fourth proposal was noted and the meeting adjourned.

The proposals went through the regular clearance procedures in the State Department. The fourth proposal was killed in the clearance process. Halle thought it was probably because officials thought it would be irresponsible to announce such a program when nobody had a clue about what it would mean in practice. So only the first three points were sent over to the White House for the Inaugural Address.

Then the speechwriting assistant called the State Department’s Director of Public Affairs back a few days later complaining that the three proposals were boring. The President wanted something original. As Halle describes it:

At this juncture, without proper time for reflection, the Director of Public Affairs found himself standing on the shore of his own Rubicon. He took a deep breath, and crossed over. There had been a fourth point, he said, but it had been thrown out. What was it? The Director told what it was. “That’s great,” said the voice from the White House, and “Point Four” went back in again.

Halle says nobody gave the matter another thought until the delivery of the address. To continue his narrative:

“Point Four” was a public-relations gimmick, thrown in by a professional speech-writer to give the speech more life. When the newspapers dramatized it in their principal headlines on the morning of January 21, the White House and the State Department were taken completely by surprise. No one – not the President, not the Secretary of State, not the presidential assistant or the Director of Public Affairs –knew any more about “Point Four” than what they could read for themselves in the meager and rather rhetorical language of the speech….It was only now, after the Inaugural Address had been delivered and the “bold new program” acclaimed all over the world, that machinery was set up in the government to look into the possibilities of such a program and make plans.

President Truman was asked six days later about background on the origin of Point Four. He replied with a good story that had no relation to the reality:

The origin of Point Four has been in my mind, and in the minds of the Government, for the past two or three years, ever since the Marshall Plan was inaugurated. It originated with the Greece and Turkey propositions. Been studying it ever since. I spend most of my time going over to that globe back there, trying to figure out ways to make peace in the world.

We want always to think our leaders take intentional, decisive actions , especially on something so important as foreign aid. It’s hard to say in this case to what extent it was an “accident,” or whether the fundamentals made aid an accident waiting to happen. But it’s good for the soul to realize that policies can happen by accident more than we are usually willing to accept.

[1] ON TEACHING INTERNATIONAL RELATIONS , Virginia Quarterly Review, 40:1 (1964:Winter) p.11. I found the reference in Gilbert Rist’s wonderful book, The History of Development: from Western Origins to Global Faith (3rd edition 2009)

This entry was posted in History and tagged , . Bookmark the permalink. Follow any comments here with the RSS feed for this post. Both comments and trackbacks are currently closed.


  1. Adam Baker wrote:

    It reminds me of the revelation in one of Woodward’s books that mention of the “axis of evil” was included in the State of the Union simply to draw attention away from the Iraq invasion, which was then impending.

    Posted November 14, 2010 at 10:31 pm | Permalink
  2. Don Stoll wrote:

    Sixteen years elapsed between Fleming’s accidental discovery of penicillin in 1928 and what I believe was its first occasion for massive application to wound treatment: D-Day. Foreign aid has taken a bit longer to attain comparable levels of effectiveness. . .

    Posted November 14, 2010 at 11:30 pm | Permalink
  3. Rafe Champion wrote:

    It is a pity that they did not realise that the Marshall Plan was a failure, the major beneficiaries were US firms that unloaded surplus goods like tobacco and peanuts on the Europeans. Thanks to research by Tyler Cowen, summary and link here

    Posted November 15, 2010 at 7:08 am | Permalink
  4. RJS wrote:

    Interesting post. Thanks for doing it. I’ll see if I can get the VA Quarterly article.

    Posted November 15, 2010 at 8:15 am | Permalink
  5. booksquirm wrote:

    It’s interesting that official aid was instigated as a “public relations gimmick” while most of our globalised NGOs started out as DIY acts by people concerned about suffering they’d seen at home or abroad. In this context the current (and I would say mostly justified) reaction of aid professionals against amateurs and PR opportunists sounds like the parent’s lament of ‘do as I say, not as I do’. I didn’t imagine it would feel better to think of official aid as an extension of foreign policy but at least that’s a bit more grounded than something to spice up a dull speech; a little more open to democratic input than a writer’s need for a zinger. Your 5th November post and Teddy Ruge reminded us that the people living the lives about which we talk, are largely unaware of us: another unexpected cause for relief.

    Posted November 15, 2010 at 10:04 am | Permalink
  6. Rafe Champion wrote:

    The late Stanislav Andreski wrote some helpful reports on aid in South America and also in
    Africa. He pointed out that locals could not write the truth about the situation, nor could visitors who wanted to return regularly.

    Posted November 15, 2010 at 4:10 pm | Permalink
  7. Guy Pfeffermann wrote:

    Stanislav Andreski coined the word “kleptocracy”.

    Posted November 15, 2010 at 8:20 pm | Permalink
  8. Demetrio wrote:

    I’ve recently read an article of Cowen and Shenton (1995, The Invention of Development).
    They are pretty convincing in pointing out that development is a policy of Industrialisation made to take care of its social consequences i.e. keep calm the powerless with some top-down solutions. In that perspective today’s International Development and Foreign Aid just continues, denying it and forgetting its lessons, the tradition of those same social policies applied to the colonies. The Truman speech, they continue, is just a spin doctor moment where the old development concept as colonial social administration gets recycled with new words and slogans, but keeps on enforcing the same old undercover power relations.

    Hope it’s interesting, Dem

    Posted November 17, 2010 at 10:30 am | Permalink
  9. Garth Luke wrote:

    Nice story, but do you really think that this was the beginning of foreign aid or just the beginning of modern US aid?

    Posted November 19, 2010 at 11:37 pm | Permalink
  10. Paul Hoebink wrote:

    Please note that the most authorative book on US foreignh aid, Vernon Ruttan’s ‘United States Development Assistance Policy’ (p. 50) carries a different story about the origins of ‘Point Four’.

    Posted November 20, 2010 at 8:46 am | Permalink

6 Trackbacks

  1. […] This post was mentioned on Twitter by Benjamin Geer, Conduit Journal. Conduit Journal said: How foreign aid was invented by accident […]

  2. […] accidental invention of foreign […]

  3. By Remainders: Ethics : South Capitol Street on November 15, 2010 at 4:59 pm

    […] Foreign aid was invented by mistake. […]

  4. […] Easterly at AidWatch […]

  5. […] The accidental invention of foreign aid  […]

  6. […] If he reads William Easterly’s blog, Professor Corbridge might be spluttering into his muesli right about now. Easterly has recently discovered Post Development, in the form of Gilbert Rist’s book, and yet, first contact between the Professor (who for all his iconoclastic thought in some areas, is basically in agreement with the core tenets of the Washington Consensus) and Monsieur Rist hasn’t been some form of fission reaction. Not at all. Easterly, loves the book, referring to it as ‘wonderful’. […]

  • About Aid Watch

    The Aid Watch blog is a project of New York University's Development Research Institute (DRI). This blog is principally written by William Easterly, author of "The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics" and "The White Man's Burden: Why the West's Efforts to Aid the Rest Have Done So Much Ill and So Little Good," and Professor of Economics at NYU. It is co-written by Laura Freschi and by occasional guest bloggers. Our work is based on the idea that more aid will reach the poor the more people are watching aid.

    "Conscience is the inner voice that warns us somebody may be looking." - H.L. Mencken

  • Archives