FOREIGN AID AND AMERICAN FOREIGN POLICY: A DOCUMENTARY ANALYSIS.

Prof. David A. Baldwin(Government). New York: Frederick A.Praeger, 1966. 261 pp. $6.50.

This is a source book on foreign aid, supplemented by the author's compact and ruthlessly honest commentary. Professor Baldwin, who also serves as assistant director of the Public Affairs Center, prepared the volume while he was a research fellow at the Brookings Institution. For raw materials he took major speeches, official reports, and Congressional testimony. To these he added a few analytical tools, deliberately leaving the reader much of the task of applying tools to materials.

The documents are organized around a handful of continuing policy questions. Should aid be extended as loans or grants? Directly or through international organizations? Which should receive priority: military aid or economic aid? Should Congress or the President have the larger voice in aid programs? (A: Congress, if one prefers less generous programs; otherwise the President). Can tariff cuts or larger private American investments overseas be regarded, in any sense, as alternatives to government loans or grants? (A: Yes, if one can but persuade U. S. politicians to cut tariffs and foreign politicians to maintain attractive investment climates).

A lot of ambiguity and double talk has surrounded discussion of such issues in public forums. Professor Baldwin's analysis is both clear and incisive. As such, it will help not simply the amateur but the semi-pro student. The latter will find especially useful his discussion of a financial hermaphrodite called a "soft loan repayable in inconvertible local currency." He will also appreciate the clear characterization of the different agencies and programs that are born or die in the lush jungle of national and international assistance.

But every reviewer should ultimately come to grips with what his readers would most like, or still better with what they most need, to know. Let me therefore single out a few substantive findings. One is that in relation to gross national product we are now spending on foreign aid less than one-half of what we spent in the immediate postwar years. A second is that our present aid to less developed countries amounts to only one-tenth as much per inhabitant as did our Marshall Plan aid to Europe; perhaps this, and not only the oft lamented weakness of their institutional underpinnings, explains why less developed countries have achieved less spectacular results with our aid. A third is that while Marshall Plan aid took the form primarily of grants, today's assistance to Africa, Asia, and Latin America is increasingly extended in the form of loans repayable in dollars — and at interest rates which tripled between 1961 and 1965!

Finally, since we now require that beneficiaries spend most of their dollars in the United States, aid has become a major prop for selected American exports. In a recent year, for example, from 20 percent to 33 percent of our foreign sales of locomotives, fertilizer, and iron and steel were paid for with dollars made available by aid programs. Charity does not always begin at home, but it sometimes ends there.

Professor of Government