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Thanks to Gene Sperling who, in his Bloomberg column today, argues for greater support for of the MCC and the war on global poverty. Sperling proposes a second tier of funding for MCC countries dedicated to health and education reform. Clearly, these two sectors are critical to poverty reduction and it would be nice to see the MCC more open to investment in these sectors. Where countries can show direct links between investments in these sectors and economic growth and show gaps in current funding, MCC makes sense. Word on the streets in Washington and in MCC countries is that infrastructure, private sector development and property rights projects are being pushed by the MCC, with health and education on the back burner. Particularly in the case of education, where research has shown a link between enhanced education levels and economic growth and where funding is less available than that for health right now, it is a shame that the MCC is not more actively encouraging eligible countries to propose bold investments targeted to growth and poverty reduction results. That said, MCC countries have an obligation to both own and actively push for the programs they believe to be most critical in transforming their economies toward prosperity. There is a balance to maintain between pushing ones own development priorities and country ownership.
Expanding the existing threshold program is sensible, if the budget permits. It should not, however, be exclusively health and education, although those will be sensible in many countries that do not pass the “investing in people” indicators. A separate tier of funding to enhance the efforts of countries that are making strides in education and health but are ineligible for regular MCC funds will prove difficult in a reality of more eligible countries and less budgetary appropriations. It also runs the risk of tilting the balance between setting donor priorities and country ownership.
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.