The MCC Between a Rock and a Hard Place: More Countries, Less Money and the Transformational Challenge

July 25, 2007

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. Key recommendations include:

  • Redouble efforts to secure funding closer to the original $5 billion per year. The Bush administration and MCC supporters should fight hard for its $3 billion FY 2006 request and work diligently to document MCC success both in compact countries and as an innovative foreign assistance provider to support a request for the full (originally projected) $5 billion for FY 2007. To make that happen, however, Congress needs to be convinced that substantial additional funds are essential for the MCC to achieve its goals.
  • Fund larger compacts in fewer countries. If the MCC does not receive substantially larger funding, a decision by the MCC to prioritize larger, bolder investments may mean investing in fewer countries. If funding ultimately levels off at $2-2.5 billion, the MCC will not be able to fund transformational programs in more than 15-20 countries.
  • Fund smaller compacts in more countries. Should the MCC move in this direction, it would need to cede its mission to be transformational.
  • Set clear deadlines. The MCC could provide more certainty and remove some of the tension around having more eligible countries with less funding by setting some clear deadlines for the proposal process.

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