On 3 November 1961, United States President John F. Kennedy signed the Foreign Assistance Act of 1961, which replaced several older foreign aid agencies with the US Agency for International Development (AID). Kennedy refashioned the aid bureaucracy in part to address criticisms that, although the United States had gone to great effort to rebuild Europe after the Second World War through the Marshall Plan, Americans had done little to address the economic needs of the newly developing countries. Headquartered within the State Department in Washington, AID set up various missions in US embassies around the world to administer development assistance programs involving civic action, public administration, tax reform, population control, literacy, education, housing, agriculture, and banking.
Kennedy administration intellectuals, collectively known as the "whiz kids" conceived of AID as an instrument to promote modernization and "nation-building," or the construction of stable democratic-capitalist societies based on American values. Fearing that the Third World would turn to the Soviet Union or China if not provided with a viable alternative, AID officials designed development assistance programs to win the "hearts and minds" of impoverished peoples in the global struggle against communism.