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The Marshall Plan: History's Most Successful Structural Adjustment Program

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  • DeLong, J. Bradford
  • Eichengreen, Barry

Abstract

The post-World War II reconstruction of Western Europe was one of the greatest economic policy and foreign policy successes of this century. "Folk wisdom" assigns a major role in successful reconstruction to the Marshall Plan: the program that transferred some $13 billion to Europe in the years 1948-51. We examine the economic effects of the Marshall Plan, and find that it was not large enough to have significantly accelerated recovery by financing investment, aiding the reconstruction of damaged infrastructure, or easing commodity bottlenecks. We argue, however, that the Marshall Plan did play a major role in setting the stage for post-World War II Western Europe's rapid growth. The conditions attached to Marshall Plan aid pushed European political economy in a direction that left its post World War II "mixed economies" with more "market" and less "controls" in the mix.
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Suggested Citation

  • DeLong, J. Bradford & Eichengreen, Barry, 1991. "The Marshall Plan: History's Most Successful Structural Adjustment Program," Department of Economics, Working Paper Series qt3b1108bj, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    • Handle: RePEc:cdl:econwp:qt3b1108bj
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    More about this item

    Keywords

    Marshall Plan; foreign aid; Eastern Europe; Social and Behavioral Sciences;
    All these keywords.

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration

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