This is a joint post with Casey Dunning.Congress is calling for an explicit comparison of development results from the Millennium Challenge Corporation (MCC) and traditional U.S. development assistance programs. The House Budget Committee’s FY2012 budget resolution seeks to eliminate duplication in U.S. development programs and asks all agencies funded by the foreign operations or 150 account “to step back and ask what results are being achieved.” The MCC gets a special shout-out:
Eliminate Duplication in Development Efforts. President Bush and Congress created the Millennium Challenge Corporation [MCC] in January 2004 as part of a new approach to development assistance. Its aim was to focus on promoting partnerships with countries committed to good governance, economic freedom, and investing in their citizens. Since then, the U.S. Government has provided more than $10 billion in development assistance through the MCC. Over the same period, the United States’ traditional Development Assistance program has provided more than $13 billion for these same development purposes. Now that the first round of MCC compacts is complete, it is time to evaluate the relative performance of these programs and to focus U.S. resources on the programs that produce the best results.
Some MCC fans interpret the MCC focus as a negative (i.e. assumes the MCC is duplicative), but the language seems pretty objective to us and it’s smart to be asking for a comparison of results across U.S. development programs to inform tough budget decisions ahead. We expected more of these questions in hearings earlier this year with USAID Administrator Raj Shah and MCC CEO Daniel Yohannes. House appropriators asked a few of these questions, but House authorizers got caught up in partisan spats instead.It’s worth noting that the MCC’s $10 billion (just under $10 billion according to our calculations and thanks to the FY2011 budget cut) did not go toward the same projects nor was it disbursed in the same way as the $13 billion from the Development Assistance account. The hope is that the different approach and differing results will come out when the programs are compared.The MCC’s policy reform and outcome data, available now for all completed compacts (Honduras, Cape Verde, Georgia, Vanuatu, and Nicaragua), can start informing Congress. MCC impact evaluations, which will be available one year after a compact ends (and reevaluated in subsequent years), should also feed into these assessments. And USAID’s new evaluation efforts should do the same. The one caution is that Congress should not punish the development agencies that are doing evaluation right and admitting what isn’t working. Policymakers should give credit to agencies showing both successes and failures. The goal should be to reduce duplication but also learn what works to get a bigger bang for the U.S. development buck.In the end, the budget resolution extends a challenge to the MCC to prove its model and results. Our guess as to the MCC’s response to this challenge: Bring it on!
