Two major themes on the purpose of foreign aid are expressed throughout the literature. One is highly pragmatic, realistic, and, in the view of some, even contemptible. The other is idealistic. The first is that foreign aid is (and should be) one instrument of foreign policy used to advance the goals of the donor in the world arena. The second theme is that foreign aid should be given generously to promote economic development in poor countries. Because the first theme can easily encompass the second, they are not necessarily inconsistent. However, it is important to separate these themes, because they suggest the use of different criteria for the purpose of evaluating the effectiveness of a given aid program. The first section of this chapter is given to a discussion of the goals of foreign aid in general, without reference to Vietnam aid.

Next we attempt to define the goals of the massive U.S. economic aid program to South Vietnam. A year after the fall of Saigon, the Agency for International Development (AID) completed a major review of its twenty years of aid to Vietnam (AID 1976). Unfortunately, that report contains no coherent discussion of the criteria by which the effectiveness of the various programs was to be judged. Thus, a necessary first step in our analysis of aid is to identify the principal objectives of U.S. economic aid to South Vietnam, and that is undertaken in Section 2.2.