(Preston, 157) The Bretton Wood Conference then led to establishment of the International Monetary Fund, otherwise known as the IMF, and the World Bank (IBRD). Also established was a body concerned with regulating trade, the G.A.T.T. (General Agreement on Tariffs and Trade) and the Marshall Plan for European Recovery. One of the reasons for their establishment was U.S. self-interest and fear of communism. Economic recovery in Western Europe would, of course, help the American economy. Also from the fear of communism arose the Truman Doctrine, which attempted to "put socialists out or decrease their influence." (Preston, 158) It was the dramatic recovery of Europe's economy that lent credence to the notion that deliberate intervention in an economic system to raise its level of the activity was possible.
The construction of modernization theory is suffused with the political concerns of the U.S. in the 1950s and the early 1960s, the idea that capitalism will produce widespread prosperity, and the logic that industrialism would drive the global system forward. The issues of international bipolarity, containment, and aid-donor competition were also at the core of the construction of modernization. Europe had been through a whole plethora of disaster, war, revolution, and depression. There was a massive shift of power to the United States. The dominance of the U.S. and the Soviet Union led to bipolarity, while containment concerned halting the spread of communism and the future prosperity of the world. Thus, in the 1950s modernization theory was born, to protect the interests of the U.S. and to have functioning liberal market economies, as well as ensure resistance to communism and the future prosperity of the world. This aided the U.S. in becoming the "protector of the free world" and form allies through aid-donor competition. (Preston, 168) .
Behind the logic of modernization theory were intellectual resource theorists such as economists and social scientists.
