A Brief History of U.S. Foreign Aid

Between 1946 and 2023, the United States spent an average of $51.4 billion each year on foreign aid. That aid has a far reach: economic and development aid that helped rebuild Europe after World War II, humanitarian aid in Africa, and more recently military and development aid to Afghanistan. Only a few places in the world haven’t felt the influence of U.S. aid in some way. 

The major destinations and goals of U.S. foreign aid have changed over time as new issues come to the foreground and U.S. priorities shift. The graphs below chart the ebb and flow of U.S. foreign aid into different countries and regions at different times. By looking at the aid flows in the context of what was happening in the world at the time, this resource explores how the relationship between foreign aid and foreign policy priorities has evolved. 

U.S. Foreign Aid to Regions Over the Years

Rebuilding Europe with the Marshall Plan: 1947–53

The modern era for U.S. foreign aid began after World War II, when the United States sent Western Europe one of the largest foreign aid packages in history. The Marshall Plan had two primary purposes: to rebuild Europe after the devastation caused by World War II and to prevent the Soviet Union, the United States’ main postwar rival, from spreading its communist ideology and influence in Western Europe. U.S. politicians thought that if European countries could avoid mass poverty as they rebuilt, their citizens would be less likely to launch a communist revolution. The Soviet Union and Eastern European countries in its orbit were offered the same aid package. But it was refused, with the Soviet Union condemning the program as U.S. interventionism. The Marshall Plan is especially significant because it influenced the national security focus of future U.S. foreign aid projects.

Defending Ukraine: 2022–Present
Since Russia has launched a renewed and expanded invasion of Ukraine in 2022, the United States has been one of the top providers of security assistance to Ukraine. Since 2022, the United States has sent more than $100 billion to Ukraine in financial, humanitarian, and military aid. The aid sent to Ukraine marks the first time a European country holds the top spot of receiving U.S. aid since the Marshall Plan.

Fighting Communism in the Vietnam War: 1946–77

The Vietnam War was waged from the mid-1950s to 1975 between communist North Vietnam, supported by China and the Soviet Union, and South Vietnam, supported by the United States. In the years leading up to and during the war, the U.S. government poured money into South Vietnam to support the military and promote stability. But following the North Vietnamese victory, the U.S. Congress severed diplomatic relations with Vietnam and restricted most aid to the country. The United States only resumed providing aid when U.S.-Vietnamese relations began to normalize in the early 1990s.

The United States also sent significant amounts of aid to South Korea and Taiwan during the Cold War. In South Korea, U.S. economic and military aid helped fend off a communist North Korea during the Korean War. It also helped jumpstart a dormant economy. In fact, some historians credit South Korea’s economic rise in part to U.S. assistance. Similarly, U.S. aid to Taiwan in the 1950s and 1960s helped keep the communist government of China from attempting to claim control over the island. It also helped lay the foundation for Taiwan's economic growth.

Fueling the Green Revolution: 1959–70

Because of a postcolonial focus on industrialization over agriculture, India was in the midst of a massive famine by 1961 as farmers were not producing enough food to feed the population. The United States sent foreign aid in the form of wheat to help alleviate the famine. In 1965, one-fifth of all U.S. wheat production went to India. The United States Agency for International Development (USAID) also helped fund agricultural development, including by helping to institute university programs that studied agriculture. This helped fuel what became known as the green revolution—the rapid development of new agricultural techniques that dramatically increased how much food countries could produce.

Stabilizing Afghanistan: 2001–present

After the terrorist attacks of September 11, 2001, the United States invaded Afghanistan and toppled its ruling group, the Taliban, which had been accused of hiding and protecting al-Qaeda operatives. What followed was two decades of aid packages aimed at creating some kind of stability in Afghanistan amid an active war. These efforts had mixed results. Although the United States withdrew in 2021, USAID programs continued working to strengthen civil society, expand economic opportunity, and stabilize conflict zones in the country. The Taliban’s renewed control of the country further destabilized these efforts, raising new challenges.

Containing Communism in Latin America: 1961–68

After leftist revolutions sprang up in Latin American countries such as Cuba, stopping the spread of communism across the Western Hemisphere became an important U.S. goal. In 1961, President John F. Kennedy established the Alliance for Progress, an assistance program intended to relieve poverty and social inequality in the participating Latin American countries. Foreign aid spiked immediately after that. The goal was to apply the logic of the Marshall Plan to Latin America; economic stability would theoretically curtail the threat of revolution. The program was dissolved in 1973, largely due to a failure to improve the social and economic issues it was meant to address.

Fighting a War on Drugs: 1982–2000s

Starting in the 1980s, one of the priorities of U.S. foreign aid in Latin America was to stop the flow of illegal drugs into the United States. At the beginning of his first term, President Ronald Reagan declared a war on drugs both at home and abroad. Much of the United States’ cocaine supply came from Latin America. Any country in the region that the U.S. government determined was “doing its part” in the war on drugs would receive U.S. foreign aid. Colombia in particular received military aid and training in an attempt to reduce the quantity of drugs originating from the country. Although Colombia saw some success in dismantling cartels operating in the region, coca production continued, and has actually increased in recent years.

Fighting AIDS in Africa: 2003–present

Starting in the early 1990s, sub-Saharan Africa became the center of the HIV/AIDS pandemic. In 1999, HIV/AIDS was the leading cause of death across Africa. Even though testing and treatment for HIV/AIDS existed, they were not widely available in many African countries. After years of little global action, the United States established the President’s Emergency Plan for AIDS Relief (PEPFAR) in 2004 in select, mostly sub-Saharan African countries. The program allocated funding to provide medicine, money, and personnel to combat HIV/AIDS in affected countries because President George W. Bush believed extending humanitarian aid around the world was an important show of U.S. values. These values, he believed, would lead to more trust in American leadership. When PEPFAR launched, only fifty thousand people in Africa had access to any lifesaving antiretroviral treatment. PEPFAR quickly became the largest health initiative ever undertaken worldwide. As of December 2023, it has provided that treatment to more than twenty million people around the world and is credited with saving more than twenty-five million lives. 

Establishing A Stronghold in the Middle East: 1976–present

During the Cold War, when the United States and the Soviet Union were competing for global power and influence, the oil-rich Middle East rose in geopolitical importance to both countries. Several Arab states were aligning with the Soviet bloc, and the United States began to see its ally Israel as an important buffer against Soviet influence in the region.
In part to bolster its ally, the United States provided Israel significant military aid during the Cold War. It also helped broker discussions that resulted in the 1979 Egyptian-Israeli peace treaty, after which it increased aid to Egypt. Even after the collapse of the Soviet Union in 1991, the United States saw Egypt and Israel as important promoters of regional stability. It continues to send billions of dollars in aid to both countries today.

Fighting the War on Terror: 2003–present

After al-Qaeda terrorists killed almost three thousand people in an attack on the United States on September 11, 2001, the United States declared a “war on terror” and invaded Afghanistan, which had provided sanctuary to the terrorists. Although the Iraqi government was not involved in the 9/11 attacks, the United States also invaded Iraq in 2003, in part on the incorrect assumption that the Iraqi government was developing weapons of mass destruction. After coalition forces toppled Iraqi leader Saddam Hussein and his government, U.S. troops fought insurgents and worked to support democratic institutions, contributing more than $20 billion in assistance to help reconstruct the country.