U.S. Public Diplomacy: Background and the 9/11 Commission Recommendations [Updated February 4, 2005] [open pdf - 107KB]
From the Summary: "While the 9/11 terrorist attacks rallied unprecedented support abroad for the United States initially, they also heightened the awareness among government officials and terrorism experts that a significant number of people, especially within Muslim populations, harbor enough hatred for America so as to become a pool for terrorists. Over time it became clear that for the global war on terrorism to succeed; sustained cooperation from around the world would be required. In the years prior to September 11th, both Congress and the various administrations downplayed the importance of funding public diplomacy activities, and in 1999 abolished the primary public diplomacy agency -- the U.S. Information Agency (USIA). Public diplomacy often was viewed as less important than political and military functions and, therefore, was seen by some legislators as a pot of money that could be tapped for funding other government activities."
CRS Report for Congress, RL32607