POLS 2401 Edition 1Outline of Previous LectureInternational Financial Institutions (IFI) and Multinational CorporationsI.International Financial InstitutionsA. World BankB. International Monetary FundII. World Bank GroupsA. International Bank for Reconstruction and Development (IBRD)B. International Development Association (IDA)C. International Finance Corporation (IFC)D. Multilateral Investment Guarantee Agency (MIGA)E. International Center for Settlement of Investment Disputes (ICSID)III. Critics of IFIIV. World Bank and IMF Structural Adjustment Programs (SAP)V. Criticisms of ConditionalityOutline of Current LectureEconomic Development, Poverty and Foreign AidI. The Global “Problem”: Uneven Levels of Economic Development and ProsperityA. Rich Industrialized CountiesB. Developing Third WorldII. Emergence of foreign AidA. Marshall PlanB. Cold War AlliesC. Global Security III. Mixed Goals of Aid•Economic Development, Poverty and Foreign Aid•The Global “Problem”: Uneven Levels of Economic Development and Prosperity•Rich, industrialized countries–Advanced levels of economic development, technology, standards of living, health and mortality rates, etc.•Developing Third World–Poverty: in 2010, 1.2 billion people lived below the poverty line of $1.25 per day (World Bank)–Health: every year 6.6 million children (under the age of 5) die from malnutrition and preventable diseases–Hunger: close to 842 million people do not have enough to eat–Water and sanitation: about 2.4 billion people do not have basic sanitation, 768 million people use unsafe sources of drinking water•The Emergence of Foreign Aid•The Marshall Plan: aid to Europe and the first large scale US foreign aid program•1950s: Foreign aid to Cold War allies•1960s: Aid to the developing world as part of global security (economic dimension of the Cold War competition with the USSR)–Under president Kennedy–1961: Creation of US Agency for International Development (USAID)–US pushes its allies to set up foreign aid programs, coordinated through the Organization for Economic Cooperation and Development (OECD)•Evolution of Aid Policies•Early years: modernization and state-led economic growth–Large infrastructural projects•1970s: poverty alleviation and a shift to more social-economic development programs (health, etc.)–Variety of projects•1980s – 2000s: Sustainable development, democracy, poverty alleviation, private actors (civilsociety, private business)–Shift away from states to private actors–Stronger pro-democracy and pro-market emphasis•Mixed Goals of Aid•Security Goals (Strategic Aid)–Cold War: Aid as tool against communism, way to gain and support allies–Aid as tool against terrorism•Commercial/Material Goals (Commercial Aid)–Aid to enrich national companies (tied aid)–Food aid: support farmers in industrialized countries•Ideological Goals (Political Aid)–Promote Western values and ideas (democracy, human rights, free