Harold James on Reconstructing Ukraine: Lessons from the Marshall Plan

On Thursday, September 29 Harold James joined Marcus Academy for a lecture. Harold James, the Claude and Lore Kelly Professor in European Studies at Princeton University, is Professor of History and International Affairs at the School of Public and International Affairs, and an associate at the Bendheim Center for Finance.

Watch the full presentation below. You can watch all Markus’ Academy webinars on the Markus’ Academy YouTube channel.

Executive Summary

• [0:00] Introductory Remarks: Ukrainian GDP dropped by 30% or more, in addition to all the human suffering. The Marshall plan and reconstruction efforts in Iraq and Afghanistan may provide guidance on how to design a reconstruction program for Ukraine. International institutions may be necessary, but there are still questions about how to coordinate aid, how much oversight to have, the scale of the help, and the planned duration.
• [6:07] Key elements of the Marshall Plan. The Marshall Plan had several myths surrounding it, both positive and negative. While some people viewed it as a unique act of generosity, others saw it as a tool for U.S. imperialism. Secretary Marshall said at the time that the initiative for the Marshall Plan had to come from Europe, though the facilitation of democracy was very important to the U.S. At the time, there was a need for specific imports, particularly of foodstuffs, machine tools, and engineering equipment. The U.S. also worked to spread anti-communist messaging, with the Cold War a key factor in much of the decisionmaking, as well as in obtaining assent in Congress.
• [13:47] Implementation of aid. The amount of aid given by the U.S. decreased over time, but the total amount was just over 13 billion dollars (equivalent to 175 billion dollars today). By giving grants instead of loans, the plan avoided a situation like the one following WWI, and the government could intervene strategically. However, when the country is giving, there should not be extensive or intrusive oversight; for the governance of the country receiving aid, it is important that they develop their own processes to deal with corruption and challenges of that nature on their own.
• [40:14] Key takeaways. While funding is important, it need not come exclusively from the U.S. Identifying bottlenecks will be helpful in addressing the most pressing issues. Debt relief can be a useful tool, if handled properly and delicately. There must be flexibility in the handling of the situation, but giving these countries the room to self-govern and monitor funding themselves is important. Any plan cannot simply be a device to advance the agenda of an outside influence.
  [46:50] Important differences and considerations. While some international bodies may be helpful in this process, it cannot be effectively entrusted to groups like the IMF when Russia or China could block the restoration of democracy and sovereignty in Ukraine. Ukraine’s unique situation with the EU and other organizations means that their cross-border ties need to continue to develop for them to be successful following the war. Ukraine still has the capacity to lead in fields of democracy, while contributing to the international community through their exports but also the development of advanced high tech industries.