From Innovation to Impact: Next Steps for the Millennium Challenge Corporation

January 16, 2009

As the Obama administration takes office this month, it will be looking for ways to elevate development as a third pillar of U.S. foreign policy—alongside diplomacy and defense—and to modernize, consolidate, and revitalize the foreign assistance network. Strengthening the MCC, one of the United States’ most promising tools for smart foreign policy, will be part and parcel of this effort.

With the initial five-year startup phase of the MCC nearing completion, the organization is now transitioning into a pivotal second phase of its existence. The overarching goal for the MCC in this next phase should be to show demonstrable progress in its mission to reduce poverty through the promotion of sustainable economic growth in partner countries. Fundamentally, success will be contingent upon the MCC model proving not only innovative and feasible but also effective in achieving robust development outcomes on the ground.

This paper highlights a specific set of reforms that the MCC can implement moving forward to fulfill its core mandate. The proposed reforms are aimed at enabling the MCC to accelerate and bolster the effectiveness of compacts, while at the same time paving the way for sustained results well into the future. Successfully implementing these reforms is paramount not only to realizing the potential of the MCC but also to its viability as an adequately resourced program moving forward.

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