Reforming Foreign Aid: Where Does the MCA Fit?

December 23, 2005

The Financial Times recently reported on a rumored shake-up in the way US foreign aid is administered. According to the FT and flagged by Stewart Patrick, a Fellow here at CGD, the President may soon propose the centralization of foreign aid, with certain key agencies - principally USAID - placed within State's existing chain of command. According to the anonymous leakers of this revelation, the changes would revitalize foreign aid by bringing development assistance explicitly into a political sphere. In essence, the proposed reorganization attempts to make aid more effective by integrating it into the calculus of national interest, alongside traditional national security pillars such as defense and diplomacy. While much of the ensuing talk has been focused on the repercussions that this might have for USAID, an already marginalized agency in the eyes of many, the proposal could also bear heavily on the fate of the MCC.The FT briefly mentioned the MCC in its December 14th article, Making Aid Effective, noting:

President George W. Bush has twice launched big foreign aid programmes: the Millennium Challenge Account and the HIV/Aids Initiative. Reality has not always matched rhetoric: the administration failed to secure Congressional funding for the MCA.
While the article made a good argument against incorporating USAID into State, it neglected to localize the MCC within the overall debate over the direction and design of a consolidated foreign aid system. In my opinion, the proposal could impact the MCC in two distinct ways:1. The MCC could be incorporated into the newly streamlined organizational chart, with some oversight role for the Aid Czar at State over the Corporation's operations. This could ineluctably lead to the politicization of the MCC, which is anethema to the original objectives and organizing philosophy of the Corporation.2. In the second scenario, the MCC doesn't get incorporated which, oddly enough, could be just as detrimental. If the MCC is left behind, mere flotsam in the wake of a wholesale reorganization of the aid community, it risks becoming marginalized as the center of gravity in the US aid community shifts over to the new organization. This marginalization could be exacerbated by the short attention span of the MCC's political overseers, who will be more likely to fight for the new body at budget time.Whether or not this foreign aid talk is all hot air, as this discussion moves forward the MCA will surely be in the hot seat to prove its commitment to its organizing principle of depoliticized aid.


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.