The new science of modernization arrived in Washington's hour of need. Following Stalin's death in 1953, Soviet leaders eagerly pursued diplomatic overtures toward uncommitted nations. Premier Nikita Khrushchev theorized a division of the world between a "zone of war," comprising the industrialized states, and a "zone of peace," the principle arena of Cold War competition. In December 1955 he captured the international spotlight with a bold tour of Afghanistan, India, and Burma, the first visit by a Soviet leader outside of the communist bloc. In Calcutta the Soviets were greeted by a throng of more than two million. Along the way he offered trade and aid, and India accepted Soviet assistance in the construction of the Bhilai steel works, its flagship development project. The Soviet move stunned the Eisenhower administration, which concluded that Soviet aid would create bandwagon effects that would draw the rest of Eurasia into the communist orbit. Having made "neutralism" a dirty word, John Foster Dulles was chagrined at the resistance in Congress to any American-aid counteroffensive directed at nonaligned nations. To its growing alarm, the administration found itself faced with a new danger against which it was powerless to act.
The deadlock was broken in 1958 with the appearance of The Ugly American, a book that has been described as the Uncle Tom's Cabin of the Cold War. It was the work of William Lederer, a publicist working for the U.S. Navy and the CIA, and Eugene Burdick, a University of California political scientist. At Lederer's home in Honolulu in 1957, the two men decided that a novel was the best device for warning the American people that the Soviets were gaining an upper hand in the poor countries of Asia. The narrative is a collection of vignettes set in a fictional Southeast Asian nation where communist economic and political offensives are winning the allegiance of a disgruntled peasantry. Sophisticated Americans, diplomats with Boston accents and courtly manners, are pouring U.S. aid into dams, roads, and colossal engineering projects that alienate the local populace. Meanwhile, the ugly American, Homer Atkins, an agricultural adviser and the hero of the story, is making a genuine connection. The simple presence of Homer and his wife, two mobile psyches, in an Asian village creates a productive stir. Women come to marvel at the tidy home kept by Mrs. Atkins, and men watch as Homer applies his instrumental view of nature to ancient problems. Homer soon finds a counterpart, Jeepo, an empathetic, mechanically minded native, and the pair harness a bicycle to a pump, creating an irrigation-driven economic takeoff. Atkins offered readers a counterpoint to Pyle, the guileless title character of Graham Greene's The Quiet American, who was "like a dumb leper who has lost his bell, wandering the world, meaning no harm." Lederer and Burdick reassured readers that "average Americans, in their natural state … are the best ambassadors a country can have." The Ugly American bitingly attacked the administration's inaction and import substitution–style development aid, but its real achievement was to enfold Rostovian theory in myths of national identity and innocence.
Defying expectations that it would drop into an ocean of public indifference, The Ugly American remained on the New York Times best-seller list for seventy-eight weeks, sold an astonishing four million copies, and was made into a block-buster movie starring Marlon Brando. The ensuing media frenzy put development on a par with the space race and created a new strand of populist internationalism that Senator John F. Kennedy seized to boost his presidential bid. Kennedy sponsored legislation to increase aid to India and announced the existence of an "economic gap" in Asia that was being filled by Soviet aid. In February 1958, Kennedy first met Rostow, and the modernization theorist moved into Kennedy's inner circle of advisers. Kennedy was drawn to the diagnostic precision of the CENIS model, and he adopted its language in his own critiques of foreign aid. The alliance of Rostovian theory and Kennedy-Johnson foreign policy ushered in the golden age of modernization theory in the 1960s. George Ball, undersecretary of state from 1961 to 1966, recalled in his memoirs the vogue for development economics in 1961 and "the professors swarming into Washington" who "talked tendentiously of 'self-sustaining growth,' 'social development,' the 'search for nationhood,' 'self-help,' and 'nation building.'"
In the first year of his presidency, Kennedy launched the Alliance for Progress, the Peace Corps, Food for Peace, and the Agency for International Development (AID). He declared the 1960s the "Development Decade" and substantially increased the budget for foreign assistance. Modernization theory supplied the design, rationale, and justification for these programs. Stages had called for an expanded foreign aid effort organized exclusively around the development mission. Rostow implied and Kennedy had declared during the campaign that State Department bureaucrats used aid for short-run diplomatic advantage, making the separation of the Agency for International Development from State an essential first step. Likewise, Food for Peace took established agricultural surplus disposal programs and organized them around a develop-mental mission. Rather than dumping the excess produced by federal price supports (or using the surplus to alleviate famine), the program's primary purpose was the generation of "counterpart" funds that could be steered into social overhead investment. At the administration's urging, the United Nations put food assistance on the same basis in its World Food Programme.
The Peace Corps institutionalized a belief (traceable through The Ugly American to Lerner and Redfield) that exposure to modern personalities could induce change. Kennedy announced the Peace Corps during the campaign and asked Rostow and Millikan to draft the proposal. Volunteers were expected to create a catalytic effect by introducing ideas from a higher point on the developmental arc. The Peace Corps sought not specialists but "representative Americans" who could transmit values by example. Theory informed expectations of what volunteers should achieve. Performing their assigned jobs as teachers or agronomists was considered secondary to the task of catalyzing community involvement in a spontaneous project. Many volunteers experienced at first hand the chasm between the theory and reality of development.
The most ambitious of Kennedy's development schemes, the Alliance for Progress, was planned along rigidly Rostovian lines. In anticipation of imminent takeoff in the Latin American countries, the Alliance for Progress called for a Big Push to raise investment rates, foster social capital, and induce thorough reforms in institutions, land tenure, and distribution of income. Once plans and institutions were in place, the alliance would ride a wave of rising expectations into the next stage of growth in which the Americas would be safe from the temptations of the Cuban model. Rostow predicted a transition to self-sustaining growth within the decade, allowing the administration to keep the problem of underdevelopment "off our necks as we try to clean up the spots of bad trouble." The anticipated follow-on effects, however, failed to materialize, and $20 billion in aid disappeared into the continent without leaving a noticeable accumulation of social capital. After the first year, growth rates were far below the ambitious target figures, and the press and Congress grew impatient with the alliance. As Michael Latham points out, Rostovian theory was never held to account for the alliance's failures. Instead, setbacks only reinforced the validity of concepts that provided explanations and remedies for failure. Theorists chalked up the alliance's problems to bureaucratic ineptitude, personnel problems, and stubbornly antimodern Latin leaders who refused to carry forward the reforms. Since the theory was rooted in the historical experience of the industrial core, it could not be invalidated by contradictory experience in periphery nations. Modernization funneled dissent into its own framework, where it could challenge the execution but not the conception of the plan.
Throughout the 1950s and 1960s, academic theorists continued to dispute within the overall consensus a number of issues that affected policy design. The balanced or Big Push approach saddled government with an almost unreachable standard for effective policy and encouraged a revived effort to identify "bottlenecks" that could be removed to stimulate disproportionate returns. Albert O. Hirschman reconfigured this debate with a theory that gained popularity after 1964 as the Johnson administration faced tighter budgets. In The Strategy of Economic Development (1958), Hirschman explained that small inputs, "inducement mechanisms," could push one sector into the lead, forcing others to catch up. Rather than using aid to advance an economy to a new equilibrium, as in classic Rostovian theory, aid programs should try to create disequilibria that, like loose electrons in an atomic pile, would trigger chain reactions. The difference between the two approaches can be seen in the Ford Foundation's efforts to reform agriculture in India. In the 1950s and early 1960s, the foundation sponsored a "package program" to improve conditions in fifteen rural districts on a broad front, including advances in education, health, farm equipment, irrigation, and crop diversification. Disappointed with the results, the foundation shifted in the mid-1960s to a strategy built around development and dissemination of dwarf wheat and rice varieties (the inducement mechanism). Since the new plant strains required chemical fertilizer, irrigation, and modern transport and distribution networks, other sectors would be pulled along by success, stimulating a "green revolution."
Another controversy concerned whether there was a single route to modernity and whether the experiences of Europe and the United States, the "first movers," represented the best model. Alexander Gerschenkron, William Lockwood, Clark Kerr, and others argued that the requirements of "late" developers differed and that cultural proclivities, particularly an authoritarian tradition, might dictate alternative paths. At the height of his influence, Rostow felt he was fighting a rearguard battle against those who esteemed China's Great Leap Forward. But the "developmental state" school, while persistent, lacked policy clout until the 1980s, when the manifest success of Japan, South Korea, and Taiwan (and the clear disparity between their strategies and development orthodoxy) led the World Bank to endorse an alternate "export-led" growth model.
Population was a third contested area. In both classical and Keynesian theory, a growing population accelerates economic development. Adam Smith noted that it was the industrious poor who "generally bring up the most numerous families, and who principally supply the demand for useful labor," and John Maynard Keynes attributed the Great Depression of the 1930s partly to a catastrophic decline in births. This view prevailed among economists through the 1950s in no small part because of the coincidence of the baby boom and high growth rates in the United States. But a dissenting view articulated by John D. Rockefeller III and the Population Council gained influence toward the end of the decade. In 1958 a presidential review of foreign aid led by Theodore Draper concluded that rapid population growth threatened to cancel the effects of any aid infusions. Rostow argued in Stages that population posed a serious but not insurmountable obstacle to takeoff. Kennedy made population control part of the Agency for International Development's mission, and Lyndon Johnson intensified the emphasis, eventually making aid contingent on action to reduce fertility. In the 1970s both theory and policy swung back from that extreme position as a number of studies connected population increases with expansions in consumption and accumulation of social capital. By the 1980s, economic opinion was mixed, and the Reagan administration had repositioned population control as a moral issue.