Thomas C Schelling
The Marshall Plan:
A Model for Eastern Europe?
The Marshall Plan is occasionally invoked in discussion of aid for Eastern Europe. Sometimes the reference is only to the spirit of the Marshall Plan, implying a large-scale focused effort, not unlike a call for a "Marshall Plan" for U.S. inner cities. Sometimes a more literal comparison is intended: what worked for Western Europe in the late 1940s and early 1950s, it is argued, may be what Eastern Europe needs in the early 1990s. This paper is written mainly to clarify what the Marshall Plan was and how it operated.
The Marshall Plan did not inaugurate American foreign aid. Lendlease to Britain and the Soviet Union and a few other countries had amounted to almost $50 billion by the end of the Second World War, at a time when the U.S. annual gross national product (GNP) was about $175 billion; lend-lease constituted about one-sixth of total U.S. war expenditures. (Subtracting "reverse lend-lease" and some repayment, the net cost of the program was $37 billion.) After the war, relief and rehabilitation programs amounted to approximately