DEFINITION of 'U.S. Agency for International Development - USAID'

The U.S. Agency for International Development is an independent federal agency that provides civilian aid to foreign countries.

BREAKING DOWN 'U.S. Agency for International Development - USAID'

President John F. Kennedy created USAID in 1961 by executive order. The agency is tasked with administering the federal government's foreign civilian aid programs, which include disaster relief, technical assistance, poverty alleviation and economic development. While USAID is independent, it falls under the guidance of the Secretary of State. According to the Committee for a Responsible Federal Budget, foreign aid makes up around 1% of the federal budget, or 0.7% if military aid is excluded.

History of USAID

U.S. civilian assistance to foreign nations began in the 19th century with informal "technical missions," in which experts – often with government assistance – traveled to Asia and Latin America to spread knowledge of industrial techniques, economic policy, sanitation and other fields. In 1919, Congress formed the American Relief Administration to provide humanitarian assistance to post-war Europe. Later interwar government aid efforts focused on Latin America.

Following World War II, the Marshall Plan saw the U.S. spend over $13 billion – $140 billion in 2017 – to rebuild war-ravaged European economies. The Cold War led to competition between the Soviet Union and the U.S. to win the favor of "third-world" countries (that is, outside the first-world West or second-world communist bloc). While much of this effort was focused on military aid, civilian assistance also played a part. It was in this context that Kennedy ordered the State Department to create and independent agency to coordinate civilian foreign aid.

RELATED TERMS
  1. Civilian Labor Force

    Civilian labor force is a term used by the Bureau of Labor Statistics ...
  2. Agency Bond

    An agency bond is a bond issued by a government agency. These ...
  3. Federal Agencies

    Federal agencies are special government organizations set up ...
  4. Disaster Relief Act

    Disaster relief acts are legislative tools the government can ...
  5. Credit Agency

    Credit agencies gather debt information that is used to generate ...
  6. Virtual Assistant

    A virtual assistant is an independent contractor who provides ...
Related Articles
  1. Personal Finance

    What That Financial Aid Offer Letter Really Says (And How to Get More)

    Yes, you got a college financial-aid offer, but how good is it really? How to understand the fine print.
  2. Financial Advisor

    Helping Clients Weigh College Financial Aid Offers

    Now's the time for reviewing financial aid offers, which can often be confusing. Here are a few tips to help clients make sense of them.
  3. Personal Finance

    How Financial Aid for College Tuition Has Changed

    Financial aid for college tuition has gone high-tech and currently favors higher-income applicants.
  4. Insights

    Trump's Executive Orders (So Far)

    Trump has been fulfilling campaign promises by issuing executive orders.
  5. Investing

    Financial Planning Tips And Resources For Veterans

    Veterans or all kinds have special needs when it comes to financial planning. Here are some tips as well as a comprehensive list of online resources.
  6. Insights

    Financial Regulators: Who They Are and What They Do

    Find out how these financial regulators govern the financial markets.
  7. Personal Finance

    A Brief History Of Credit Rating Agencies

    Credit rating agencies have a long history in the U.S. Learn about what they do and how were they developed.
  8. Investing

    Investing Beyond Your Borders

    Investing abroad poses risks, but can also help you diversify. Discover ways to invest in foreign stocks.
  9. Investing

    Rite Aid's 5 Key Strategies for Long-Term Success (RAD)

    Drugstore-chain Rite Aid (NYSE: RAD) has turned itself around impressively, having spent a huge amount of time and effort in returning to profitability. The company has used a combination of ...
  10. Investing

    The Biggest Risks of Investing in Rite Aid Stock (RAD,WBA)

    Read about some of the risks facing investors who buy into Rite Aid stock after a potential acquisition by Walgreens was announced.
RELATED FAQS
  1. What are the advantages of foreign portfolio investment?

    Learn the advantages that businesses can derive from foreign portfolio investment in an increasingly globalized business ... Read Answer >>
Trading Center