While the MCC has been fairly bold and risk-tolerant in terms of its big investments (especially infrastructure), it tends to be rather risk-averse when it comes to program implementation. This translates into overzealous oversight of country programs by Washington MCC staff, and ultimately, to slower progress toward program goals. This is very much at play in Honduras, but the country is far from alone in this regard.
Excessive Washington oversight in the procurement approvals process has come up in all three of the implementing countries covered by MCA Monitor (Madagascar, Nicaragua and Honduras). The MCC has been working with a seven-step approvals matrix for procurements that requires approval from at least three different Washington-based MCC staff in each of the seven steps. This means that every procurement takes months. Not only does this cause delays, it undermines ownership among MCAH staff and the authority of the MCC resident country director (RCD). One MCAH official exclaimed, "They play a role in everything. It feels like they are working with us here in the office!" And in the words of one private sector respondent, it is a "shameful waste of resources to have an MCC RCD in Honduras and not empower him to approve anything!"
Thankfully, the MCC is well-aware that the cumbersome approvals process has delayed program progress and disbursements in MCA countries across the globe. The MCC is on the verge of implementing a new approvals matrix which will hopefully strike a better balance between risk management and program efficiency. Ideally it will delegate more authority and discretion to the MCC officials in the field on lower-risk steps in the procurement process (such as initial expressions of interest) while keeping MCC oversight where necessary to avoid major errors (such as technical reviews).
While procurement is on track to be more efficient, the MCC retains approval rights on program design, hiring decisions and other operational details. This kind of meticulous oversight has led MCA staff in several countries to say that Washington-based MCC staff tend to lose sight of the forest for the trees. This is partly because so many individuals (sectoral, monitoring and evaluation, financial management, etc.) are focused on oversight and accountability for their particular aspects of the compact, and there is insufficient emphasis on keeping the big-picture vision in mind. One astute MCC official made the comment that, "The problem prevents the problem from being solved." This is because so many decisions are made by consensus, or at least require approval from a wide variety of MCC staff, and naturally no one votes to relinquish their own power of approval. Therefore even the decision to streamline decision-making is impossible to make.
Next Section: Conclusion