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This is a joint posting with Casey Dunning

MCC CEO Daniel Yohannes kicked off yesterday’s public outreach session about the latest MCC board meeting with introductions of new leadership hires, details of his trip to Ghana and Cape Verde, the board’s decision to defer funding to the Philippines, and forthcoming impact evaluations.  He also said the MCC would post a new “open government” plan on the website as part of President Obama’s effort for executive branch agencies to use new technology to share information and solicit public feedback.

The Philippines:

Yohannes praised the government of the Philippines for developing an innovative compact in partnership with the MCC, but explained that the board deferred final consideration of the Philippines’ compact proposal until after national elections in May. The MCC press release echoes these sentiments. Darius Teter, acting vice president for compact development, said the MCC wants to consult with the incoming administration to secure their commitment to MCC principles and compact objectives.  Teter said he doesn’t expect the compact to be altered or augmented and noted that the Arroyo administration has already reached out to discuss the MCC compact and process with opposition members. 

We predicted the Philippines would be a tricky agenda item and while we’re pleased to see the MCC give credit to the current government for a technically sound compact, the decision to defer gets close to some murky political water and could create difficult management issues for the MCC in countries with pending elections. Interestingly, no one mentioned the ongoing concern about the Philippines’ failure on its control of corruption scores which featured prominently in previous board discussions

Impact evaluation:

Honduras and Cape Verde are expected to complete their first compacts this year and will undergo independent third-party impact evaluations that will be shared publicly. Yohannes noted that while results at the end of five years would be telling, real impact would come later.  To this end, the MCC will conduct impact evaluations after five, ten, fifteen and twenty years. This long-term view of monitoring and evaluation is music to our ears and reinforces the MCC’s model of transparent and accountable results.

Policy Priorities:

During the panel discussion, new vice president for policy and international relations Sheila Herrling (and old friend of the Center’s) highlighted four emerging policy priorities:

1.)    Better Communicating Results. The MCC has a wealth of data and anecdotal evidence on the successes of compacts around the globe.  The challenge now is to better communicate them, connecting the dots from policy reforms to outputs and impact.

2.)    Rethink the threshold program.  Deputy vice president for policy and international relations Jim Greene is charged with reviewing the threshold program and will cover issues related to the threshold program selection, incentives, and purpose. Results of the review are expected this summer and will be shared widely with the community. Herrling also noted that Liberia and Timor-Leste’s threshold programs should be finalized by late spring.

3.)    Graduation and selection review.  Herrling and her team are taking a fresh look at the MCC’s current selection process and the increasing phenomenon of country income category graduations.  Forty-two countries have graduated income categories since the MCC’s inception – eight of which were in the process of developing or implementing MCC compacts. And increasingly, more of the well-governed poor countries are in the lower middle income category. MCC will develop a proposal for addressing these challenges in consultation with the development community and Congress.

4.)    Innovation in the private sector.  Herrling rightly noted that the MCC “starts hugely innovative” but that they intend to further leverage private sector and NGO partnerships.  The MCC policy team is also looking at developing innovative financing mechanisms that are viable for the MCC model and not duplicative of other aid efforts.

Senegal:

In response to a question about concerns of corruption in Senegal, Herrling said there are two questions to ask: 1) is Senegal still a good partner from the policy perspective, and 2) were they a good partner in preparing the compact? She said Senegal still performs in the top quartile of the governance indicators, and that, as with any country, there are risks. She said the MCC CEO had communicated his concerns with Senegalese officials and that the MCC has a variety of tools it could use—from warning to suspension to termination—should the board lose confidence. 

Darius Teter followed with a bit of the history on the Senegal compact.  Senegal was rumored to be the first country likely to sign an MCC compact, but after three years, it had no compact.  So the MCC gave them some tough advice and one more bite at the apple, according to Teter.  In response Senegal pulled together a new team, invested large amounts of their own funding into compact development, and created a compact that both the MCC and Senegal are proud of.

The challenge for the MCC going forward in Senegal is twofold: to ensure and communicate that there are adequate accountability measures in place, and to overcome any perception of the MCC operating amidst known corruption. The MCC has likely invested heavily in the first part; the second part is a more difficult task.

MCC role in U.S. development reviews and initiatives:

Herrling also reported that the MCC is integrally involved in the Presidential Study Directive on U.S. Global Development Policy (PSD) and that she expects to see MCC principles reflected in the PSD. She also said the MCC is contributing expertise (and in some cases staff) to the food security initiative and global health initiative.

New team:

While we didn’t get an update about a new civil society board member to replace Ken Hackett whose term expired last fall, MCC CEO Yohannes did proudly introduce the newest members of his leadership team including Herrling; Patrick Fine, vice president of compact implementation; and Charles Cooper, vice president of congressional and public affairs.  It’s great to see the leadership team coming together and expect the other positions will be filled soon.

Disclaimer

CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.