Last week I predicted that the MCC board of directors would not select any new countries for compact eligibility, and that they would re-select all seven countries currently in the compact development stage. I was wrong on three counts.
CGD Policy Blogs
MCC’s board of directors will meet on December 10 to decide which countries will be eligible for compact and/or threshold program assistance for FY2014. CGD’s Rethink offers a preview of the issues the board will grapple with, as well as a prediction of which countries they will select.
On Tuesday, the Senate Foreign Relations Committee held a hearing on the nomination of Dana Hyde to be the new CEO of MCC, as well as Mark Lopes to be the US executive director of the Inter-American Development Bank. The short hearing (attended by Senators Markey and Barrasso, chair and ranking of the International Development Subcommittee) was largely positive toward both MCC and Hyde.
Yesterday, Foreign Policy’s The Cable came out with an article warning that—with the upcoming board meeting to determine which countries will be eligible for MCC funding for FY14—MCC is essentially on the verge of pouring money into the hands of corrupt regimes.
MCC is expected to publish its annual country eligibility scorecards next week. I always love this time of year. While MCC’s annual selection process isn’t exactly new anymore, each year raises new issues and questions. The perennial question--a fundamental question--is which countries are going to pass the indicator criteria? Not all the data are publicly available yet, but some key indicators are. As a preview, we ran the numbers on how countries stack up on the corruption and democracy “hard hurdle” indicators. Based on this ini
PEPFAR deserves to be commended for its efforts to define key measurable outcomes for its orphans and vulnerable children (OVC) portfolio. Approximately 17 million children worldwide have lost one or both parents due to HIV/AIDS. In response, PEPFAR has earmarked 10% of its annual program funds to help mitigate the psychological and developmental effects this loss can have on children.
MCC has entered a new era for its threshold program. Honduras is set to become the first country to implement a new model of the program which is expected to help a country become compact eligible by allowing it to demonstrate its willingness to tackle tough reforms addressing policy constraints to growth in partnership with MCC. There is potential for valuable insight from this approach, but it has some limitations: the threshold program experience may not translate directly to a future compact experience, and any insight gained will only be relevant for countries that have a shot at compact eligibility based on other criteria.
USAID has made sweeping new commitments to two important elements of foreign assistance reform: improving learning and increasing transparency. A commitment to publish datasets associated with USAID-funded evaluations would be a further win for both.
“Conditionality” in foreign aid often gets a bad rap, but are there circumstances in which it works? The Millennium Challenge Corporation (MCC) provides large-scale development assistance to selected poor but well-governed countries, chosen primarily based on their performance on a set of publicly available policy indicators (a type of ex ante conditionality). MCC’s selection system is touted as an incentive for countries to pursue policy reform in order to gain MCC eligibility, a phenomenon nicknamed: the “MCC Effect”. However, there is limited