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The Millennium Challenge Account (MCA) is a bilateral US development assistance program announced by President Bush in March 2002. This page provides an overview of the MCA including how the MCA is different from—but must coordinate with—other donors, and a summary of MCA funding levels.
The MCA is intended to be different than other US aid programs in six key ways:
Focus: The objective of the MCA is to help support economic growth and poverty reduction in the poorest countries in the world. The program is not designed for humanitarian assistance, to help in post-conflict situations, to further security interests, or to reward political allies.
Administration: The MCA is administered by the Millennium Challenge Corporation (MCC) which is independent of all other agencies that administer US aid. The MCC is governed by a CEO and a board of directors consisting of the Secretaries of State and Treasury, the Administrator of USAID, the US Trade Representative, the CEO of the MCC, and four nongovernmental representatives.
Country selection: The MCA provides assistance to only a select group of countries that are implementing policies consistent with a strong commitment to economic growth and development—ruling justly, investing in their people, and encouraging economic freedom. Learn more about MCA country selection.
Country ownership: Because the MCA selects countries with relatively good governance, it can offer them more flexibility over how funds are used. The MCC works a bit like a foundation, asking eligible countries to submit proposals based on national development priorities. When these proposals are approved, the country government enters into a “ compact” with the MCC that includes program details and clear benchmarks for success. Learn more about compacts on the country pages.
Size: The MCA was intended to provide very large resources to countries that qualify. The originally proposed $5 billion annual budget would represent a near doubling of the subset of the foreign assistance budget that focuses on development objectives (rather than security, post-conflict or humanitarian goals). The MCA has yet to reach its intended scale because of lower than expected Presidential requests and Congressional allocations. Learn more about the Congress and the MCA. For more detail on the magnitude of MCA assistance, this chart shows the size of each compact relative to the country's GDP and population, as well as a ranking of the size of the MCA grant compared to other aid commitments/disbursements in compact countries.
Focus on results: The MCC places great emphasis on accountability and measurable results and thus requires countries to outline clear benchmarks for success in their compacts. These benchmarks, combined with reliable baseline data on planned outcomes, allow for effective monitoring and evaluation. Learn more about monitoring and evaluation.
MCA Coordination with Other Donors
The MCA is just one tool in the US development assistance toolkit. The US administers aid through the US Agency for International Development (USAID) and a variety of other agencies. To be most effective, the MCA must coordinate its activities with these other US agencies, as well as with other bilateral and multilateral donors. Aid, in turn, is just one policy tool to support development in poor countries. According to CGD’s Commitment to Development Index (CDI), the United States ranks 17th among the 22 richest nations in terms of the development friendliness of its aid, trade, security, investment, technology, migration and environmental policies.
The MCA was initially intended to reach, by FY2006, an annual allocation of $5 billion over and above existing US development assistance. Thus far, funding levels have fallen short of this goal. To learn more about MCA funding, visit the Congress and the MCA page of CGD’s MCA Monitor website.