This month, we celebrate the 20th anniversary of the Millennium Challenge Corporation (MCC), which has helped lift more than 300 million people around the world of out poverty by investing $17 billion in projects from roads, ports, and energy to education, health, and technology.
In a world where an unprecedented number of countries are experiencing democratic backsliding, MCC demonstrates that democracies can deliver economic and social benefits to their people. That has included more than $10 billion to 24 African countries, along with other places in the world.
“Greater contributions from developed nations must be linked to greater responsibility from developing nations,” President George W. Bush said when he announced the creation of a new Millennium Challenge Account in 2002, pledging increased development assistance for “projects in nations that govern justly, invest in their people and encourage economic freedom.” Congress established the MCC on Jan. 23, 2004.
Countries overwhelmed by disease or lack of opportunity can become unstable, so MCC’s mission to reduce poverty through economic growth means more countries remain politically sound allies and strong trading partners. This is good for Americans as well as the countries MCC serves.
MCC’s approach has been a bold experiment that represents a significant departure from the way economic development assistance had been delivered before. Its mission is narrow, focusing on reducing poverty through market-oriented economic growth. Its agreements, or compacts, with partner countries are large, five-year grants – committed up front – that range from $110 million to nearly $700 million.
Its model revolves around a competitive selection process that requires low- and lower-middle-income countries to compete with each other based on a set of credible, third-party indicators that measure their performance in three categories: governing justly, investing in the health and education of their people, and fostering economic freedom.
MCC’s emphasis on country ownership means the host government takes the lead in designing and implementing development projects in cooperation with the private sector and civil society, with independent oversight to ensure funds are properly accounted for.
And, from the start, MCC has focused on results, conducting continuous monitoring and evaluation throughout the life of each project and making all of it transparent to the public. Further, if a country backslides in its commitment to the indicators or mismanages its grant, MCC will not hesitate to suspend or even cancel its compact.
There are countless success stories.
A $350 million MCC compact helped Mongolia’s capital, Ulaanbaatar, increase its water supply by 80%. In Morocco, young women are receiving training at MCC-funded centers in fields traditionally dominated by men, empowering them to pursue employment opportunities outside their homes.
MCC funding has helped complete 3,563 kilometers of roads; trained 435,357 farmers; provided educational activities for 483,291 students; and added 220 million liters per day of water production capacity, among many other achievements.
After 20 years of innovative, results-driven economic development assistance, MCC is well positioned to continue its still-much-needed work. Twenty years into this experiment, MCC remains a model for development assistance and a positive example of U.S. global leadership.