millenium-challenge1

MCC

The Millennium Challenge Corporation (MCC) embodies a results-oriented, country-led approach to development. The agency was founded on the idea that sustainable development solutions can be achieved by partnering with developing countries committed to good governance, economic freedom, and investment in their citizens.

In their response, the agency outlines their approach to implementing the principles in the Presidential Policy Directive on Global Development (PPD): continue MCC’s model that has served as the building block for the PPD; strengthen the agency’s model based on lessons learned and further advance the vision of the policy; and respond actively to the PPD’s call for a more targeted and purposeful coordination across the U.S. government. The categories below respond to three pillars of MFAN’s foreign assistance reform agenda.

Maximize Efficiencies

  • Since its inception, the MCC has partnered with USAID and the State Department for planning and implementation of country compacts. Regarding the Partnership for Growth (PFG), MCC guided the interagency discussion on evidence-based decisions in terms of country selection and engagement. In fact, MCC’s eligibility criteria served as the starting point for selecting the PFG countries, while MCC’s constraints analysis tool was used as a basis for identifying areas of priority for engagement within individual PFG countries.
  • The agency’s approach to measuring results influenced Feed the Future’s results framework and MCC continues to support the initiative. For example, MCC coordinates with USAID to ensure that the construction of irrigation systems to support agriculture in Mali—done as part of MCC’s compact with the country—is consistent with sustainability measures laid out in the FTF multi-year strategy.
  • Principles into Practice, the MCC’s working paper series, considers how to operationalize principles in the PPD and at the heart of the agency’s model. These findings inform the interagency process with the aim of improving overall efficiency.

Prioritize Accountability

  • As part of the “continuum of results,” MCC “tracks, measures and publicly communicates results along the entire lifecycle of each country-determined program.” To ensure accountability, some of these impact evaluations are done independently.
  • With a mandate for transparency, the agency publishes “five-year budgets, cost-benefit analysis, projected outcomes, financial and program monitoring data, and results” of all compact programs. MFAN Partner Publish What You Fund recognized this approach in their 2011 Transparency Index, in which the MCC ranked first among the U.S. agencies and seventh overall. The MCC was also the first agency to publish obligation and expenditure data on the Foreign Assistance Dashboard.

Driven by Local Priorities

  • Country ownership is seen as a pillar of the MCC model. MCC partner governments work in close consultation with civil society and the private sector to set priorities for investments, are responsible for implementing MCC-funded compacts, undertake policy reforms, and are accountable to citizens.
  • To encourage countries to become eligible for MCC compacts, the agency redesigned its Threshold Program to better target constraints to economic growth. Through the new program, the MCC was able to support Tunisia following the Arab Spring as it managed an influx of global assistance.
  • Working with the private sector—including corporate, philanthropic, and non-governmental partners—remains a core principle of MCC. In Namibia, for example, the MCC compact provides for grants to communities who invest in tourism in partnership with a private-sector developer. More recently, the agency has engaged in co-investment activities, providing credit facilities and training and technical assistance. In Cape Verde, the agency specifically structured investments in water to incentivize reforms in order to attract private investment.

Click here to read the full response letter.