The Marshall Plan (officially the European Recovery Program, ERP) was an American initiative to aid Western Europe, in which the United States gave over $13 billion[1] (nearly $110 billion in 2016 US dollars)[2] in economic assistance to help rebuild Western European economies after the end of World War II. The plan was in operation for four years beginning on April 3, 1948.[3] The goals of the United States were to rebuild war-torn regions, remove trade barriers, modernize industry, improve European prosperity, and prevent the spread of Communism.[4] The Marshall Plan required a lessening of interstate barriers, a dropping of many regulations, and encouraged an increase in productivity, trade union membership, as well as the adoption of modern business procedures.[5]
The Marshall Plan aid was divided amongst the participant states roughly on a per capita basis. A larger amount was given to the major industrial powers, as the prevailing opinion was that their resuscitation was essential for general European revival. Somewhat more aid per capita was also directed towards the Allied nations, with less for those that had been part of the Axis or remained neutral. The largest recipient of Marshall Plan money was the United Kingdom (receiving about 26% of the total), followed by France (18%) and West Germany (11%). Some eighteen European countries received Plan benefits.[6] Although offered participation, the Soviet Union refused Plan benefits, and also blocked benefits to Eastern Bloc countries, such as Hungary and Poland.[7] The United States provided similar aid programs in Asia, but they were not part of the Marshall Plan.[8]
However, its role in the rapid recovery has been debated. Most reject the idea that it only miraculously revived Europe, since the evidence shows that a general recovery was already under way. The Marshall Plan's accounting reflects that aid accounted for less than 3% of the combined national income of the recipient countries between 1948 and 1951,[9] which means an increase in GDP growth of only 0.3%.[10][11]
Bradford DeLong and Barry Eichengreen conclude it was "History's Most Successful Structural Adjustment Program." They state:
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.
