To those who think public diplomacy is something that is simply done outside America's borders or that cultural relations does not have a direct impact on foreign relations, I strongly recommend Mary Dudziak's Cold War Civil Rights: Race and the Image of American Democracy. Dudziak documents the impact of domestic policies in the global ideological struggle to US-domestic interventions by the State Department and USIA to affect domestic policies and practices. For an example of this reality unknown or forgotten by too many, see Dudziak's essay at SCOTUS Blog, a blog on the Supreme Court of the US. An excerpt is below:
In May 1954, Brown v. Board of Education made headlines, not only in American newspapers, but also around the world. "At Last! Whites and Black in the United States on the same school benches," was the headline in Afrique Nouvelle, a newspaper in French West Africa (now Senegal). In India, the Hindustan Times noted that "American democracy stands to gain in strength and prestige from the unanimous ruling" since school segregation "has been a long-standing blot on American life and civilization." For the Sydney Morning Herald in Australia, Brown would "go a long way toward dissipating the validity of the Communist contention that Western concepts of democracy are hypocritical."
The global reaction to Brown was also noted in American news coverage. The decision would "stun and silence America's Communist traducers behind the Iron Curtain," argued the Pittsburgh Courier, an African American newspaper, for it would "effectively impress upon millions of colored people in Asia and Africa the fact that idealism and social morality can and do prevail in the Unites States, regardless of race, creed or color."
... When major Supreme Court cases are covered in the world press, they inform the understanding of peoples of other nations about the nature of American democracy.
... The Cold War balance of power itself seemed to turn on the faith of other nations in the benefits of democracy. Yet in the world's leading democracy, citizens were segregated by race, and African Americans were sometimes brutalized for attempting to exercise basic rights.
The Soviet Union took advantage of this American weakness. ...
We may think that sending our legal ideas overseas helps others, but in this example American justice aided American diplomacy.