National Interests and US Foreign Aid: The Carter and Reagan Years

Abstract

This study employs sets of measures to compare the relative impact of 'donor interests' and 'human needs' on US foreign aid allocations in the presumably different Presidencies of Jimmy Carter and Ronald Reagan (in his first term). The analysis proceeds in three stages. First, the complementarity of various assistance programs is assessed and the findings for the Carter and Reagan Administrations compared. Second, the donor interest and human needs variables are regressed on total foreign assistance and empirically-discerned aggregations of aid programs. Third, the first and second stages of the analysis are repeated on subsamples of nations that share either the same level of development or US alignment to determine whether the seemingly discrete variables employed in this analysis work in interaction. The results show that political-military considerations predominated in the foreign assistance policy of both Carter and Reagan. US military inducements were the primary determinant of US aid in the Carter years, and country alignment was most important in the Reagan penod. Moreover, the results indicate that economic interests determined assistance allocated to the least-developed countries in both Administrations. Human needs are found to play a secondary role in both Administrations. Finally, this study demonstrates the importance of disaggregating assistance for analysis.