House Appropriators Compare MCC to Other U.S. Aid Programs

What does the MCC do differently from USAID? Why did the MCC finish its road project in Honduras while the Inter-American Development Bank and World Bank are lagging? Why does MCC seem to be more successful? That House appropriators pushed MCC CEO Daniel Yohannes to compare the MCC model to other aid agencies in congressional testimony this morning was not a surprise; I didn’t anticipate the members would conclude MCC is doing a better job.Chairwoman Kay Granger (R-TX) kicked off the House Appropriations Subcommittee on Foreign Operations hearing this morning, calling the MCC a “unique agency” that she supports because “the model is focused on generating income in developing countries, which…will have a lasting impact.” She said “MCC is in a position to prove how foreign assistance can be effective” and praised it for building local government capacity with partner countries, measuring results and steering funds away from what doesn’t work.Rep. Tom Cole (R-OK) spread the MCC love even further. Cole said he is a fan of the MCC because of its bipartisan origins, rigorous accountability and he argued it’s easier to track MCC aid dollars. “I like this a lot better!” he said. He contrasted this with USAID and apologized for putting Yohannes in an unfair position, but asked, “What do you do differently from USAID?” and, “Why shouldn’t we apply MCC principles to USAID?”Yohannes took the high road and didn’t bite at the chance to put down other aid programs. He said MCC is different because Congress created it based on fifty years of best development practices, gave the organization a clear vision, and the MCC has a country-ownership and business model that allows it to focus on results. When pressed one more time to say why USAID is not doing these things, Yohannes deferred to the Obama administration’s new global development policy that “combines many principles practiced by the MCC” and encourages other agencies to adopt them. Cole teased Yohannes for being “very diplomatic” and said “I’m sure your USAID colleagues appreciate it!”Granger also asked Yohannes to explain the difference between MCC’s successful road project in Honduras, while the Inter-American Development Bank and World Bank’s road projects in the same region reportedly lagged behind. Rep. Diaz-Balart (R-FL) also praised MCC’s program in Honduras for its projected 88 percent increase in farmer incomes. Yohannes chalked up the difference to the country ownership model, the road maintenance fee, and links between farmers and road to increase market access, but again refused to critique other donors.Ranking member Nita Lowey (D-NY) picked up on the comparative development analysis, but noted that MCC and USAID have different jobs to do and that USAID Administrator Rajiv Shah brings new leadership and accountability to USAID. Lowey instead pressed for better coordination between U.S. development agencies in countries that often operate in “stovepipes of excellence.” This contrasted with Granger who implied that there shouldn’t be multiple funding streams in MCC compact countries and critiqued the $1.2 billion in other U.S. development and economic assistance in FY2010 in MCC compact countries.While the praise is music to MCC’s ears, the answer isn’t for the MCC to do everything. The MCC shouldn’t be working in conflict countries, for example, or poorly-governed countries. And while it might not make sense for an MCC compact country to be denied USAID disaster assistance if necessary, multiple U.S. development initiatives operating in the same place, at the same time, with different goals, structures and procedures isn’t the right approach either. President Obama’s global development policy directive takes a first step toward making sense of all U.S. development actors and policies and Congress is wisely asking how all the pieces should fit together. I would be thrilled to see the administration take the opportunity to work with Congress on crafting sensible and lasting answers to these questions. The budget pressure could force some real reform.In the meantime, Yohannes and the MCC will need to further explain the role of second MCC compacts, slippage in corruption indicators, efforts to attract private sector investment and how it will share forthcoming independent evaluations.And we can expect more of the USAID versus MCC show to continue tomorrow when Shah and Yohannes appear together in front of the full House foreign affairs authorizing committee. Perhaps we’ll hear a bit more from USAID about its broader mandate and constraints on how and where it operates (many of which come from Congress). Today’s hearing gave me new hope for smart, informed development policy conversations between the executive and legislative branches. Et tu, HFAC?