The Wages of Containment

Foreign Aid, American Grand Strategy, and the Origins of the Developmental State


My dissertation advances a geopolitical explanation for the origins of the “developmental state,” a model of state-led capitalism that studies in Comparative Politics have credited with producing the postwar economic miracles of Japan, South Korea, and Taiwan. My research contributes to this literature by focusing on the international context for the creation of the developmental state. In contrast to the conventional wisdom that the United States sponsored market capitalism in its foreign economic policy, I demonstrate that the United States supported economic planning in order to facilitate rapid industrialization among its allies in Northeast Asia. I argue that the United States’ unorthodox policies can be attributed to the strategic imperative of containing Communist China and North Korea. I provide support for this thesis using historical case studies based on archival research.

In addition to contributing to the literature in Comparative Politics, my dissertation contributes to the literature in International Relations on the geopolitics of foreign aid. The United States’ support for economic planning in Northeast Asia reflected its strategic interest in allocating its foreign aid efficiently in order to promote economic development. This finding presents a significant contrast with the existing literature. Previous studies have argued that in providing foreign aid to its allies, the United States sought to reward recipients for their political support instead of promoting their economic development. I argue that the precise opposite is the case. Because economic development enhances a country’s military power, the United States used aid to support development among its allies in order to defend them against security threats from the international Communist movement. In contrast, the United States used aid to purchase political support among non-allies whose geopolitical alignment was uncertain. In another chapter from my dissertation, I verify this claim using statistical analysis of an original measure of geopolitical alignment. This analysis yields the highly counterintuitive finding that the United States attached more conditions in its aid to allies than in its aid to non-allies.

My dissertation uses a mixed-methods approach that relies heavily on primary sources. My statistical analysis is based on diplomatic papers found in the Foreign Relations of the United States (FRUS) series, which is produced by the Office of the Historian of the Department of State. FRUS is a valuable resource for historians of American foreign relations, and my dissertation is one of the first studies in Political Science to analyze FRUS using statistical methods. My historical case studies draw on a wide range of archival collections from the United States and East Asia, including the U.S. National Archives, the John F. Kennedy Library, the Lyndon B. Johnson Library, the Hoover Institution Archives, the Academia Historica in Taiwan, and the Syngman Rhee Presidential Papers in the Institute for Modern Korea Studies at Yonsei University. This breadth of inquiry allows me to adopt a global perspective on the political economy of American grand strategy during the Cold War.