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MCC’s board of directors will meet on December 10 to decide which countries will be eligible for compact and threshold program assistance for FY2014.  CGD’s Rethinking US Development Policy offers a preview of the issues the board will grapple with, as well as a prediction of which countries they will select.

MCC’s choices aren’t easy this year, but there are a few considerations that will likely influence their decisions:

  • Competition for scarce resources.  MCC is facing another tight budget this year, combined with a very large pipeline of countries already developing compacts.  There isn’t a lot of room to add new countries into the fold.
  • Selectivity for second compacts. A number of countries that could be considered for second compact eligibility this year have a mixed track record of implementation on their first compact.  While first compact implementation is one of the factors MCC considers when deciding to award second compact eligibility, to date, MCC appears to have been pretty liberal in its interpretation of what is good enough.   It may draw a firmer line this year.
  • Understanding data limitations.  A record number of countries that will be considered for re-selection this year do not meet MCC’s criteria for performance on the eligibility indicators.   However, these indicators are imperfect proxies of a country’s policy performance, so the board must decide if the countries that fail the indicator criteria do so because of a real policy performance decline or whether the change is largely data noise.  It would be imprudent for MCC to cut off a good-faith relationship with a country based on the latter.

We’ll discuss all of this—as well as our predictions—in further detail on Thursday; hope to see everyone there.