NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

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

J. Bradford De Long, Barry Eichengreen

NBER Working Paper No. 3899
Issued in November 1991
NBER Program(s):   ITI   IFM

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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Document Object Identifier (DOI): 10.3386/w3899

Published: in Rudiger Dornbusch, et. al. (eds.) Post-World Warr II Economic Reconstru-ction and its Lessons for Eastern Europe Today, Cambridge: MIT Press, 1993

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