When strict guidelines for grant recipients and continual oversight force transparency and proper allocation of funds, assistance dollars can not only alleviate poverty, but also develop more accountable, transparent governments. Millennium Challenge Corporation (MCC), started in 2004, has earned a strong track record for its ability to implement multi-year programs while requiring better governance from the recipient countries. As MCC’s Vice President for Policy and International Relations Sheila Herrling pointed out this week, the agency maintains the core belief that “aid is better spent in well-governed countries.” By maintaining rigorous criteria for selecting countries to receive compacts or threshold agreements, and then enforcing high standards for program implementation and monitoring the countries’ governance and transparency, the MCC has been able to leverage the developing countries to achieve higher standards for governance strengthening their economies for long-term growth. Early outcomes have been promising. The MCC has successfully leveraged dozens of countries toward more democratic, transparent governments and has not had any serious instances of corruptions within its programs. Cape Verde recently became the first country to sign a second compact with the MCC. Ms. Herrling noted that Cape Verde stands out as the single fastest and best reformer in the world, achieving high levels of transparency and good governance. Arguably, were it not for the incentive of the multi-year infrastructure and economic development programs, such rapid success would not have been attained.
Debates continue on the Hill as Congress continues to make difficult decisions about the budget. The International Affairs Budget is facing devastating and disproportionate cuts, but U.S. diplomatic and development efforts are as important as ever and are continue working to modernize. MCC is just a small portion of the International Affairs Budget, it represents the ongoing effort for more effective, efficient programming and other U.S. international development organizations have taken note of its success. USAID recently released its USAID Forward, which aims to improve monitoring and implementation to ensure that assistance dollars are appropriately spent. The Administration also recently launched the Foreign Assistance Dashboard, which allows anyone to track where and how foreign assistance dollars are allocated and spent. These initiatives foster transparency and accountability and hold recipient governments to high standards. They are proving valuable to international stability and U.S. smart power strategy. Innovative programs like the MCC offer lessons learned and instruction on how to alleviate poverty, promote good governance, and advance U.S. interests abroad.