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EspañolMILLENNIUM CHALLENGE ACCOUNT
(Redirected from Millennium Challenge Corporation)
The 'Millennium Challenge Account' (MCA), run by the 'Millennium Challenge Corporation', is a bilateral development fund announced by the Bush administration in 2002 and created in January, 2004.
At the Inter-American Development Bank on March 14, 2002, American President George W. Bush calling for a new compact for development with accountability for both rich and poor countries. he also pledged to increase development assistance by 50% by Fiscal Year 2006.[1] Other development programs like USAID (United States Agency for International Development) have been thought to have suffered from many different and sometimes conflicting goals, which often are a result of political pressures, and for not delivering long term economic improvements.
Countries are selected on a competitive basis through a set of 16 indicators designed to measure a country’s effectiveness at ruling justly, investing in people, and fostering enterprise and entrepreneurship. The focus of the MCA is to promote economic growth in the recipient countries. The program emphasizes good economic policies in recipient countries. The Bush administration has stated their belief that development aid works better in countries with good economic policies, such as free markets and low corruption.
Early evaluations noted that environmental safeguards would be needed to prevent widespread environmental damage that comes with economic growth.[2] Before the creation of the Threshold program, there was also arguments to allow countries that narrowly failed the criteria to be allowed to compete for funding.[3]
All indicators used and the whole process of qualifying are publicly available at the homepage of the MCA. On September 11, 2006, two new criteria were adopted for the Fiscal Year 2008 selection process, both of which relate to the environment. They will measure candidate countries ability to provide "clean drinking water, expand sanitation services, streamline the property registration process, and make land rights accessible and secure for poor and vulnerable populations."[4] The Corporation announced in December 2006 the creation of a gender policy to promote the role of women in the process of forming the compacts and in their impact.[5]
In the first year (2004), 17 countries were made eligible for a MCA loan: Armenia, Benin, Bolivia, Cape Verde, Georgia, Ghana, Honduras, Lesotho, Madagascar, Mali, Mongolia, Morocco, Mozambique, Nicaragua, Senegal, Sri Lanka, and Vanuatu. Madagascar and Honduras were the first countries to receive actual funding from the MCA. As of May 2005, Nicaragua, Cape Verde and Georgia are next in line to receive money. On June 16, 2006, The Gambia was suspended from eligibility, citing the deterioration of in 8 of the 16 criteria categories.[6] Mali was approved in October 2006 for a 461 million dollar program to develop modern irrigation systems and an industrial park.[7] Jordan was granted full compact eligibility, despite objections from Freedom House for its lack of full political and civil rights.[8] The country of Fiji is no longer eligible due to its military coup, which under US law precludes the country from receiving financial aid of this type.[9] Opposition MP's in Ugandan MP's from the opposition party hailed their countries rejection from full compact status, demanding instead a stronger effort in stopping the corruption that disqualified their country.[10] The funding of Tanzanias compact has been pushed foreword from May 2007 to an earlier date to accelerate the process of reform.[11] In June 2007, MCA eligible countries in Africa held a meeting in Accra to discuss their experiences in the program.[12]
Several countries were chosen in 2004 for a new part of the program called Threshold Program Assistance, which are smaller compacts used to assist a country close to meeting account eligibility to become eligible for a full program.[13] Jordan received a Threshold program aimed at democracy and trade totaling 25 million US dollars.[14] Yemen was previously eligible for a threshold agreement, but was suspended after their indicators fell too low to qualify. But having successfully competed a democratic election and various economic reforms, the Millennium Challenge Corporation has once again made Yemen eligible for a threshold agreement.[15]
Namibia submitted their proposal to the MCA in October, 2006 which involved improvements in education, livestock production and marketing, tourism, "Green Scheme" and indigenous natural products.[16] Mongolia has had a long negotiation period for MCA funding due to its inexperience with such large monetary grants as the MCA gives.[17]
Congress has consistently provided less funding for the program than the president has requested. In Fiscal Year 2004, 650 million USD were provided for the program, with an increase up to 1.5 billion the next year.[18] For Fiscal Year 2007, 2 billion dollars were provided, a 14% increase over the previous year but still under the 3 billion target.[19] Again for Fiscal Year 2008, less funding will be provided than was hoped for, and only 1.2 billion is currently budgeted, and the MCA CEO commented that it would undercut the programs efforts. Congress declined to re-authorize the program, which technically was not needed since the program had been authorized already, but also since there was argument over the authorization language.[20]
Studies by groups such as the Heritage Foundation have shown that many developing countries that have received foreign aid have seen their per capita income fall or stagnate over the last 40 years, and the Heritage Foundation has consistently supported the MCA's approach, which has also utilized their trade measure from the Index of Economic Freedom.[21] In April 2005, the United States Government Accountability Office issued a favorable report about the work of the MCA and its work thus far.[22] The Program Assessment Rating Tool, or PART, which reviews the efficiency and results produced by US government programs, will be reviewed in 2007.[23] A study in 2006 looking at the "MCC effect" estimated that potential recipient countries improved 25% more on MCA's criteria than other countries, after controlling for time-trends.[24] The World Policy Council (WPC) of Alpha Phi Alpha Fraternity recognizes the MCA as the most recent and most promising program in its area. The WPC recommended in 2006 that the Bush administration and the Congressional Black Caucus focus on full funding and an accelerated pace of spending.[25] ''Doing Business 2007'' cited the Millennium Challenge Accounts as a catalyst for reforms underway in 13 countries.[26] Also, Freedom House, an organization that monitors the level of freedom in the world, released subcategories for the first time since it was being used as part of the MCC's measurements to allow for finer distinctions in their ratings.[27] Also, the number of days it takes to start a business in both low and low-middle income countries has decreased significantly since 2002, which is one of the factors the accounts measure since rapid business registration is thought to increase economic activity.[28]
Some critics have charged that the program uses indicators by conservative groups such as the Heritage foundation and are therefore biased toward free market economics.[29] The program is thought to have also resulted in countries receiving less funding from other US government development organizations and not more. Some development agencies have also felt frozen out of the process since the MCA compacts are designed primarily by the country involved.[30] Implementation has also been difficult in Armenia, with concern about effectiveness is currently being discussed.[31]
1. The Millennium Challenge Account
2. Greening U.S. Foreign Aid through the Millennium Challenge Account Nigel Purvis
3. Making the Millennium Challenge Account Work for Africa Lael Brainard and Allison Driscoll
4. Millennium Challenge Corporation Adopts Environmental and Land Access Criteria for Selection of Eligible Countries
5. Millennium Challenge Corporation Adopts Gender Policy
6. The Gambia Suspended from Participation in MCC Compact Program
7. Millennium Challenge Corporation approves 1 million for Mali Charles W. Corey
8. Millennium Challenge Corporation Should Hold Countries to Higher Standards of Democratic Governance
9. US suspends m in military aid
10. East Africa: Graft Costs Uganda And Kenya Millions in U.S. Aid Kevin J. Kelley
11. US to speed up funds release to Dar Muhidin Michuzi
12. Meeting of MCA Eligible Countries in Africa
13. Millennium Challenge Corporation Names Seven Countries Eligible for Threshold Program
14. US grants Jordan 25 million dollars to finance reforms
15. Yemen’s Eligibility for Assistance Reinstated by Millennium Challenge Corporation Board
16. Namibia's Millennium Challenge Submitted in Washington
17. 2007 budget focused on human development Onoodor
18. Nuts and Bolts of Bill
19. Millennium Challenge Corporation Statement on Fiscal Year 2007 House Appropriation
20. MCA Reauthorization Bill Killed Sheila Herrling
21. The Millennium Challenge Account: Linking Aid with Economic Freedom Paolo Pasicolan and Sara J. Fitzgerald
22. Progress Made on Key Challenges in First Year
23. Assessing Program Performance Using the Part
24. Can Foreign Aid Create an Incentive for Good Governance? Evidence from the Millennium Challenge Corporation Doug Johnson, Tristan Zajonc
25. The Centenary Report Of The Alpha Phi Alpha World Policy Council
26. Annual Report of International Finance Corporation Highlights Reform Incentives Created by Millennium Challenge Corporation
27. Freedom House Releases Subcategory and Aggregate Scores for Freedom in the World
28. Millennium Challenge Corporation Releases 2007 Country Data Measuring Performance on 16 Benchmark Indicators; MCA Eligibility Creating Incentives for Policy Reform in Countries
29. Calling Bad Business Good Mark Engler
30. A Slouching Millennium Challenge Tim Starks
31. SOLUTION TO PROBLEM OF UNEQUAL DEVELOPMENT OF YEREVAN AND RURAL AREAS MOST IMPORTANT TASK
★ Millennium Challenge Corporation Official Website
★ MCA Monitor: Web site and blog provided by the Center for Global Development
★ Freedom House
★ World Bank Institute
The 'Millennium Challenge Account' (MCA), run by the 'Millennium Challenge Corporation', is a bilateral development fund announced by the Bush administration in 2002 and created in January, 2004.
Participants in the Program; United States as donor is in green, red countries have active compacts, blue countries have active threshold compacts, purple countries are in negotiations for either, and pink countries have negotiated threshold agreements and are negotiating for full compacts
| Contents |
| Origin |
| Criteria for eligibility |
| Criteria |
| Eligible countries |
| Threshold eligible |
| Proposals under consideration |
| Funding |
| Reception and impact |
| References |
| External links |
| See also |
Origin
At the Inter-American Development Bank on March 14, 2002, American President George W. Bush calling for a new compact for development with accountability for both rich and poor countries. he also pledged to increase development assistance by 50% by Fiscal Year 2006.[1] Other development programs like USAID (United States Agency for International Development) have been thought to have suffered from many different and sometimes conflicting goals, which often are a result of political pressures, and for not delivering long term economic improvements.
Countries are selected on a competitive basis through a set of 16 indicators designed to measure a country’s effectiveness at ruling justly, investing in people, and fostering enterprise and entrepreneurship. The focus of the MCA is to promote economic growth in the recipient countries. The program emphasizes good economic policies in recipient countries. The Bush administration has stated their belief that development aid works better in countries with good economic policies, such as free markets and low corruption.
Early evaluations noted that environmental safeguards would be needed to prevent widespread environmental damage that comes with economic growth.[2] Before the creation of the Threshold program, there was also arguments to allow countries that narrowly failed the criteria to be allowed to compete for funding.[3]
Criteria for eligibility
All indicators used and the whole process of qualifying are publicly available at the homepage of the MCA. On September 11, 2006, two new criteria were adopted for the Fiscal Year 2008 selection process, both of which relate to the environment. They will measure candidate countries ability to provide "clean drinking water, expand sanitation services, streamline the property registration process, and make land rights accessible and secure for poor and vulnerable populations."[4] The Corporation announced in December 2006 the creation of a gender policy to promote the role of women in the process of forming the compacts and in their impact.[5]
Criteria
| 'Criteria' | 'Category' | 'Source' |
| Civil Liberties | Ruling Justly | Freedom House |
| Political Rights | Ruling Justly | Freedom House |
| Voice and Accountability | Ruling Justly | World Bank Institute |
| Government Effectiveness | Ruling Justly | World Bank Institute |
| Rule of Law | Ruling Justly | World Bank Institute |
| Control of Corruption | Ruling Justly | World Bank Institute |
| Immunization Rate | Investing in People | World Health Organization |
| Public Expenditure on Health | Investing in People | World Health Organization |
| Girls' Primary Education Completion Rate | Investing in People | UNESCO |
| Public Expenditure on Primary Education | Investing in People | UNESCO and national sources |
| Cost of Starting a Business | Economic Freedom | International Finance Corporation |
| Inflation Rate | Economic Freedom | IMF WEO |
| Days to Start a Business | Economic Freedom | International Finance Corporation |
| Trade Policy | Economic Freedom | Heritage Foundation |
| Regulatory Quality | Economic Freedom | World Bank Institute |
| Fiscal Policy | Economic Freedom | national sources, cross-checked with IMF WEO |
| Natural Resource Management index | Supplemental Information | CIESIN/Yale |
| Land Rights and Access index | Supplemental Information | IFAD / IFC |
Eligible countries
In the first year (2004), 17 countries were made eligible for a MCA loan: Armenia, Benin, Bolivia, Cape Verde, Georgia, Ghana, Honduras, Lesotho, Madagascar, Mali, Mongolia, Morocco, Mozambique, Nicaragua, Senegal, Sri Lanka, and Vanuatu. Madagascar and Honduras were the first countries to receive actual funding from the MCA. As of May 2005, Nicaragua, Cape Verde and Georgia are next in line to receive money. On June 16, 2006, The Gambia was suspended from eligibility, citing the deterioration of in 8 of the 16 criteria categories.[6] Mali was approved in October 2006 for a 461 million dollar program to develop modern irrigation systems and an industrial park.[7] Jordan was granted full compact eligibility, despite objections from Freedom House for its lack of full political and civil rights.[8] The country of Fiji is no longer eligible due to its military coup, which under US law precludes the country from receiving financial aid of this type.[9] Opposition MP's in Ugandan MP's from the opposition party hailed their countries rejection from full compact status, demanding instead a stronger effort in stopping the corruption that disqualified their country.[10] The funding of Tanzanias compact has been pushed foreword from May 2007 to an earlier date to accelerate the process of reform.[11] In June 2007, MCA eligible countries in Africa held a meeting in Accra to discuss their experiences in the program.[12]
Threshold eligible
Several countries were chosen in 2004 for a new part of the program called Threshold Program Assistance, which are smaller compacts used to assist a country close to meeting account eligibility to become eligible for a full program.[13] Jordan received a Threshold program aimed at democracy and trade totaling 25 million US dollars.[14] Yemen was previously eligible for a threshold agreement, but was suspended after their indicators fell too low to qualify. But having successfully competed a democratic election and various economic reforms, the Millennium Challenge Corporation has once again made Yemen eligible for a threshold agreement.[15]
Proposals under consideration
Namibia submitted their proposal to the MCA in October, 2006 which involved improvements in education, livestock production and marketing, tourism, "Green Scheme" and indigenous natural products.[16] Mongolia has had a long negotiation period for MCA funding due to its inexperience with such large monetary grants as the MCA gives.[17]
Funding
Congress has consistently provided less funding for the program than the president has requested. In Fiscal Year 2004, 650 million USD were provided for the program, with an increase up to 1.5 billion the next year.[18] For Fiscal Year 2007, 2 billion dollars were provided, a 14% increase over the previous year but still under the 3 billion target.[19] Again for Fiscal Year 2008, less funding will be provided than was hoped for, and only 1.2 billion is currently budgeted, and the MCA CEO commented that it would undercut the programs efforts. Congress declined to re-authorize the program, which technically was not needed since the program had been authorized already, but also since there was argument over the authorization language.[20]
Reception and impact
Studies by groups such as the Heritage Foundation have shown that many developing countries that have received foreign aid have seen their per capita income fall or stagnate over the last 40 years, and the Heritage Foundation has consistently supported the MCA's approach, which has also utilized their trade measure from the Index of Economic Freedom.[21] In April 2005, the United States Government Accountability Office issued a favorable report about the work of the MCA and its work thus far.[22] The Program Assessment Rating Tool, or PART, which reviews the efficiency and results produced by US government programs, will be reviewed in 2007.[23] A study in 2006 looking at the "MCC effect" estimated that potential recipient countries improved 25% more on MCA's criteria than other countries, after controlling for time-trends.[24] The World Policy Council (WPC) of Alpha Phi Alpha Fraternity recognizes the MCA as the most recent and most promising program in its area. The WPC recommended in 2006 that the Bush administration and the Congressional Black Caucus focus on full funding and an accelerated pace of spending.[25] ''Doing Business 2007'' cited the Millennium Challenge Accounts as a catalyst for reforms underway in 13 countries.[26] Also, Freedom House, an organization that monitors the level of freedom in the world, released subcategories for the first time since it was being used as part of the MCC's measurements to allow for finer distinctions in their ratings.[27] Also, the number of days it takes to start a business in both low and low-middle income countries has decreased significantly since 2002, which is one of the factors the accounts measure since rapid business registration is thought to increase economic activity.[28]
Some critics have charged that the program uses indicators by conservative groups such as the Heritage foundation and are therefore biased toward free market economics.[29] The program is thought to have also resulted in countries receiving less funding from other US government development organizations and not more. Some development agencies have also felt frozen out of the process since the MCA compacts are designed primarily by the country involved.[30] Implementation has also been difficult in Armenia, with concern about effectiveness is currently being discussed.[31]
References
1. The Millennium Challenge Account
2. Greening U.S. Foreign Aid through the Millennium Challenge Account Nigel Purvis
3. Making the Millennium Challenge Account Work for Africa Lael Brainard and Allison Driscoll
4. Millennium Challenge Corporation Adopts Environmental and Land Access Criteria for Selection of Eligible Countries
5. Millennium Challenge Corporation Adopts Gender Policy
6. The Gambia Suspended from Participation in MCC Compact Program
7. Millennium Challenge Corporation approves 1 million for Mali Charles W. Corey
8. Millennium Challenge Corporation Should Hold Countries to Higher Standards of Democratic Governance
9. US suspends m in military aid
10. East Africa: Graft Costs Uganda And Kenya Millions in U.S. Aid Kevin J. Kelley
11. US to speed up funds release to Dar Muhidin Michuzi
12. Meeting of MCA Eligible Countries in Africa
13. Millennium Challenge Corporation Names Seven Countries Eligible for Threshold Program
14. US grants Jordan 25 million dollars to finance reforms
15. Yemen’s Eligibility for Assistance Reinstated by Millennium Challenge Corporation Board
16. Namibia's Millennium Challenge Submitted in Washington
17. 2007 budget focused on human development Onoodor
18. Nuts and Bolts of Bill
19. Millennium Challenge Corporation Statement on Fiscal Year 2007 House Appropriation
20. MCA Reauthorization Bill Killed Sheila Herrling
21. The Millennium Challenge Account: Linking Aid with Economic Freedom Paolo Pasicolan and Sara J. Fitzgerald
22. Progress Made on Key Challenges in First Year
23. Assessing Program Performance Using the Part
24. Can Foreign Aid Create an Incentive for Good Governance? Evidence from the Millennium Challenge Corporation Doug Johnson, Tristan Zajonc
25. The Centenary Report Of The Alpha Phi Alpha World Policy Council
26. Annual Report of International Finance Corporation Highlights Reform Incentives Created by Millennium Challenge Corporation
27. Freedom House Releases Subcategory and Aggregate Scores for Freedom in the World
28. Millennium Challenge Corporation Releases 2007 Country Data Measuring Performance on 16 Benchmark Indicators; MCA Eligibility Creating Incentives for Policy Reform in Countries
29. Calling Bad Business Good Mark Engler
30. A Slouching Millennium Challenge Tim Starks
31. SOLUTION TO PROBLEM OF UNEQUAL DEVELOPMENT OF YEREVAN AND RURAL AREAS MOST IMPORTANT TASK
External links
★ Millennium Challenge Corporation Official Website
★ MCA Monitor: Web site and blog provided by the Center for Global Development
See also
★ Freedom House
★ World Bank Institute
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