As the first country to sign a compact with the Millennium Challenge Corporation, Madagascar has been the global guinea pig for the MCA approach. Its early experience offers important lessons for countries following in its path - both about the real challenges of program administration, and the real potential of the MCA as a source of transformation and innovation.
The aid business has long grappled with the trade-off between showing results and supporting a country's own institution-building. Donors want to be sure that their money makes a difference, and often quickly. But close monitoring raises costs and pushing for quick results leads to projects that bypass or even undermine domestic institutions that are crucial to development. In Payments for Progress: A Hands-Off Approach to Foreign Aid, Owen Barder, now director of Global Development Effectiveness at the United Kingdom Department for International Development, and CGD president Nancy Birdsall propose solving this problem by having donors pay for proven progress towards such agreed goals as additional children completing school and additional kilometers of roads built. How to achieve these goals would be left to the aid recipient government. They suggest this approach may be particularly useful in fragile states. Learn more
This analysis from CGD's MCA Monitor describes two new indicators of governance and policy performance that determine a country’s eligibility for Millennium Challenge Account (MCA) finance: Natural Resources Management Index and Land Rights & Access. The authors analyze the process that led to their selection and assess the suitability of the indicators for the MCC's use.
This note explores the countries most likely to be selected for FY07 eligibility for the Millennium Challenge Account. The authors also discuss key issues the Board will face this year, including deciding eligibility for the four countries with signed compacts that do not pass the indicator test. Most controversially, the authors think it is highly likely that the Board will select both Indonesia and Jordan, but they do not believe that either would be an appropriate choice.
In U.S. Foreign Aid Reform: Will It Fix What Is Broken? CGD research fellow Stewart Patrick says the U.S. foreign aid regime is broken, and it is not clear that the Bush administration's reform plan will fix it. Patrick proposes a total overhaul of the 1961 Foreign Assistance Act and the creation of an independent, cabinet-level department for international development.Learn more
In response to a request from the Millennium Challenge Corporation, CGD convened the Global Health Indicators Working Group to examine potential measures of a government's commitment to health. The group's report recommends eight indicators for consideration by the MCC and other donors as they assess recipient countries' readiness to make effective use of foreign assistance. Learn more
Analysis of the U.S. budget reveals a chasm between Washington rhetoric about the potentially large threats arising from weak and failing states and the paucity of resources devoted to engaging with these troubled countries. The authors argue that the U.S. should think creatively about how and when to engage and should boost the $1.1 billion requested for these countries in the 2007 budget, regarding it as a form of venture capital, with high risks but potentially high rewards. Learn more
Controversies about aid effectiveness go back decades. This new working paper by CGD senior fellow Steven Radelet provides an introduction and overview of the basic concepts, data and key debates about foreign aid. It explores the range of views on the relationship between foreign aid and economic growth and discusses the reform of foreign aid, including selectivity, country ownership, the participatory approach, harmonization and coordination, and results-based management.Learn more
It is sometimes claimed that big surges in aid might cause Dutch Disease--an appreciation of the real exchange rate which can slow the growth of a country's exports--and that aid increases might thereby harm a country's long-term growth prospects. In this new working paper CGD senior program associate Owen Barder argues that it is unlikely that a long-term, sustained and predictable increase in aid would, through the impact on the real exchange rate, do more harm than good. Learn more
Donor countries have pledged to increase aid by 60 percent over the next five years, and larger increases would be needed to meet the Millennium Development Goals. Can developing countries use more aid effectively? In this new working paper, CGD senior program associate Owen Barder argues that the obstacles to effective use of significantly increased aid can be overcome by a small number of practical improvements in how aid is provided and used. Learn More
When aid projects proliferate, donors often seek better oversight through smaller projects. While this may improve administration, it burdens recipient governments with reporting requirements and donor visits. CGD research fellow David Roodman suggests in a new working paper that big projects are best for countries that get more aid, have better governance, or have less revenue. He also shows how donors who care most about their own success tend to divide their aid portfolios into more, smaller projects to draw the recipient's resources away from other donors. This reduces development. Learn more
U.S. "development assistance" refers to the transfer of resources from the United States to developing countries and to some strategic allies. It is delivered in the form of money (via loans or grants), contributions of goods (such as food aid), and technical assistance. Learn more about Rich World, Poor World: A Guide to Global Development
Development refers to improvements in the conditions of people’s lives, such as health, education, and income. It occurs at different rates in different countries. The U.S. underwent its own version of development since the time it became an independent nation in 1776. Learn more about Rich World, Poor World: A Guide to Global Development
HIV/AIDS is one of the largest challenges facing the global community. The disease has reduced life expectancy by more than a decade in the hardest hit countries and slashed productivity, making it even harder for poor countries to escape poverty. Global HIV/AIDS and the Developing World, a CGD Rich World, Poor World brief, provides an overview of the impact of HIV/AIDS in the developing world and the U.S. response. Learn more about Rich World, Poor World: A Guide to Global Development
Given all the other pressing worries, why was education among the issues that G8 leaders discussed at the St. Petersburg Summit? Education and the Developing World, a CGD Rich World/Poor World Brief, explains why investing in education is not just the right thing to do, it's the smart thing to do. Learn more about Rich World, Poor World: A Guide to Global Development
Learning from Development: the Case for an International Council to Catalyze Independent Impact Evaluations of Social Sector Interventions
This brief outlines the problems that inhibit learning in social development programs, describes the characteristics of a collective international solution, and shows how the international community can accelerate progress by learning what works in social policy. It draws heavily on the work of CGD's Evaluation Gap Working Group and a year-long process of consultation with policymakers, social program managers, and evaluation experts around the world.
Each year billions of dollars are spent on thousands of programs to improve health, education and other social sector outcomes in the developing world. But very few programs benefit from studies that could determine whether or not they actually made a difference. This absence of evidence is an urgent problem: it not only wastes money but denies poor people crucial support to improve their lives.
The Commitment to Development Index (CDI), which ranks 21 countries across six policy areas, is widely seen as the most comprehensive and substantive measure of rich country policies towards development. In response to requests from other would-be index builders, CDI architect David Roodman describes the work of the interdisciplinary team that builds and runs the Index. Among the lessons: to work well, policy indexes must combine humility with a clear sense of purpose.