ABSTRACT
This chapter raises questions about the political nature of economic development theories and the place of foreign aid programs in a larger historical context. In the transitional stages, nationalism may be turned in varying proportions to these three objectives: towards the consolidation of the central power of the new state over the old regional interests; towards external adventure, to redress real or believed old humiliations; or towards the economic and social modernization of the domestic society. Whitman Rostow argued that there were stages of development that all modern economies had passed through, and that it would be possible, through the targeted use of a foreign aid program, to help spur a country to reach more advanced stages. The evolution of aid programs in Brazil demonstrates how local politics affected US spending decisions. In some cases, as with Bolivia, money coming through the Alliance for Progress even helped strengthen anti-communist military governments opposed to reform.
