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Teenage years are often described as difficult. Does that hold true for organizations too?
A dozen years since it was set up with a remit to reduce global poverty through economic growth, the US government’s Millennium Challenge Corporation recently revealed a new Strategic Plan. Deputy CEO Nancy Lee joined me on the CGD Podcast to discuss how the new plan responds to a very different development landscape: fewer poor countries but large numbers of poor people within countries, especially fragile and conflict-afflicted states; greater urbanization; the development challenges of climate change; the growing role for the private sector; and increased reliance on developing countries’ own resources, to list a few.
“How can we create greater leverage, use these very scarce grant resources to catalyze more private finance?” Lee ponders in the podcast. One question MCC is also asking more now, she says, is “How can we really strengthen reform incentives?”
Joining Lee in the studio is CGD Senior Policy Analyst and MCC expert Sarah Rose, who highlights the strategy’s greater emphasis on policy reform and on paying for outcomes rather than inputs, in line with CGD’s work on cash on delivery (COD) aid. These aspects of the strategy aren’t entirely new, but, Rose says, they mark a clear “refocus of MCC.”
This week, Congress passed the African Growth and Opportunity Act and Millennium Challenge Act Modernization Act (H.R. 3445). Once signed, it will give MCC the long-awaited authority needed to pursue regional programming more effectively.
One of the biggest questions donors grapple with is how to balance implementing specific projects with building local capacity to execute similar programming in the future. Indeed, this question is central to the conversation—now active at USAID—about how donors can “work themselves out of a job.” One good example of how this can look comes from the Millennium Challenge Corporation’s (MCC) 2005-2010 partnership with Honduras. In this story, a key part of MCC’s legacy is not about what the agency funded but how it funded it.