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This blog post originally appeared on CGD's Views from the Center blog.
I am pleased to announce that CGD has expanded its work in monitoring U.S. foreign assistance. Sheila Herrling, whom many of you know from her wonderful stewardship of our MCA Monitor, has been named Director, Monitoring Foreign Assistance Program and will be managing our Rethinking U.S. Foreign Assistance Program, a one-stop shop for information, dialogue and analysis on the progress and challenges in modernizing U.S. foreign assistance.
This analysis from CGD's MCA Monitor describes two new indicators of governance and policy performance that determine a country’s eligibility for Millennium Challenge Account (MCA) finance: Natural Resources Management Index and Land Rights & Access. The authors analyze the process that led to their selection and assess the suitability of the indicators for the MCC's use.
The MCA Monitor team presents its predictions for the MCC's selection of countries eligible to apply for funding in 2009. Steve Radelet and Amy Crone take a hard look at the tough choice the MCC has to make, and they offer suggestions to help the MCC to weather a tight budget and political transition, to increase transparency, and clarify criteria for Threshold Program elegibility.
The board of the Millennium Challenge Corporation will soon decide how to incorporate two new natural resources indicators—a Natural Resource Management Index (NRMI) and a Land Rights and Access indicator—into the FY2008 country selection process. In a new paper by CGD’s MCA Monitor team, Sarah Rose, Sheila Herrling, and Steve Radelet explore how to integrate these new indicators into the MCA's three eligibility criteria categories: Ruling Justly, Investing in People, and Economic Freedom. They recommend adding the Land Rights indicator to the Economic Freedom category, and the NRMI to Investing in People. They also urge the MCC to offer incentives for a third party to create an educational quality indicator, thereby bringing the total number of investing in people indicators to six, equal to the number of indicators in the other two categories.
When the MCA was first introduced, many assumed it would deliver some of its funding through general budget support. But so far it has continued funding via traditional project finance. In this paper, Herrling and Radelet review trends in development assistance toward general budget support and propose an option for the MCC to phase in the disbursement of compact funds through increasing levels of budget support to select countries that prove their capacity to manage and monitor them.
In this companion note to "Round Three of the MCA: Which Countries are most likely to Qualify in FY 2006" Sheila Herrling and Steve Radelet offer advice to the MCC Board on how to balance the increase in qualifying countries, the desire for larger compacts, and limited funding.