MCA Monitor Blog
January 31, 2008
MCC approves $23 million Threshold Program with Niger
Posted by Amy Crone at 09:05 AM
MCC has announced a three-year, $23 million program to focus on corruption and strengthen demand for girls’ education in Niger. It is the 19th approved Threshold Program for the MCC and brings the total committed funding to approximately $419 million. This is also the first Threshold Program to exceed by design the 24 month approximate scope for action to reach Compact eligibility.
Of the four indicators targeted, Niger has consistently failed both Control of Corruption and Girls’ Primary Education Completion Rate -- making the program’s focus on these two areas fitting. The focus of a Threshold Program on the other two core components -- Land Rights and Access and Business Start Up is less clear though as Niger passes the former and already passes the category (economic freedom) which contains both of these indicators.
Niger’s main obstacle to full Compact eligibility is now the Investing in People category, in which, during the year that the Threshold program was negotiated, 2 of the 5 indicators plummeted below the median. As the program is currently constructed it is not likely to help Niger surmount the 3 of 5 indicators needed to pass this category. While there may be compelling reasons to focus on the new Land Rights and Access and Business Start-Up indicators, these aren’t the ones standing in the way of Niger becoming eligible for a Compact. This raises questions of the stated purpose of the Threshold Program overall – an issue we have raised most recently in our Country Selection Round paper; stay tuned for forthcoming Threshold Program analysis from the MCA Monitor team. And in the meantime, press releases from the MCC better explaining why the target areas are selected and how they fulfill the goals of the Threshold Program would be welcome and greatly appreciated.
December 10, 2007
MCC Signs $36m Threshold Program with Peru
Posted by Sheila Herrling at 11:28 AM
On November 30, the MCC signed a $35.6 million Threshold Program with Peru to combat corruption and improve immunization. Peru becomes the 18th country to sign a Threshold Program with the MCC, bringing the total amount committed to the Program to about $400 million.
Interestingly, although Peru failed both the control of corruption and immunization indicators in FY2007, the year it was deemed eligible for the Threshold Program, it now passes both indicators, making it a bit odd to have a program aimed at improving them. Indeed, the indicators now standing in the way of Peru passing the full eligibility performance test are spending on health and education (which are incredibly low) and the recently added Natural Resources Management Indicator (NRMI). And so, as good as I'm sure the program is, the fact that the indicators it targets no longer need improvement to "pass the threshold" bring us back to the broader question of what the Threshold Program's objective is. Is it to provide assistance to get countries over the threshold? Is it technical assistance in key policy areas that are good for development and helpful to countries the MCC doesn't yet want to declare fully eligible? Is it a program to support reformers without an expectation that it will make a substantial difference in the country's ability to pass the indicators at the end of the program? For those interested in our thoughts on what to do with the Threshold Program, read that section iin our recent FY08 MCA Country Selection Round paper.
November 11, 2007
MCC Signs Threshold Program with Sao Tome
Posted by Sheila Herrling at 05:09 PM
On November 9, the MCC signed a $8.6 million Threshold Program with Sao Tome focused on improving its fiscal policy and business start-up indicators. Unlike most Threshold Programs where implementation is overseen by USAID, this one will be overseen by the U.S. Treasury Department.
The MCC has now signed a total of 17 Threshold Programs for a total of $360 million.
September 13, 2007
What Does it Mean to Be on the Threshold? Two New Threshold Programs Approved
Posted by Sarah Rose at 05:34 PM
At the September 12 meeting, the MCC Board approved Threshold programs for Sao Tome and Principe ($8.7 million) and Yemen ($21 million). With the approval of these two Threshold programs, 17 out of 21 currently Threshold eligible countries have funded programs (East Timor plus the three countries that became newly Threshold eligible last November are the four that remain).
Sao Tome and Principe has been Threshold eligible since FY2004. Its program targets the Fiscal Deficit indicator through interventions to help increase tax revenue and the Days and Cost of Starting a Business indicator through new business registration procedures. Because Sao Tome and Principe has shown consistently solid performance on the Ruling Justly and Investing in People categories, improvements to the targeted Economic Freedom indicators could indeed push Sao Tome and Principe over the Threshold to passing. Interestingly, Treasury’s Office of Technical Assistance (OTA) is overseeing the implementation of Sao Tome and Principe’s program, making it the only Threshold program with a lead implementing agency other than USAID (although Treasury and the Department of Justice are involved in cooperation with USAID in a number of other Threshold programs).
Yemen’s program targets five indicators: Rule of Law, Control of Corruption, Political Rights, Fiscal Policy and Government Effectiveness though various electoral, judicial, and investment climate reforms. As you recall, Yemen was suspended (pdf) from Threshold eligibility in November of 2005 due to deteriorating performance on several of the indicators. Since then the Yemeni government has implemented an impressive set of reforms and demonstrated a commitment to continue improvements on its indicators. Yemen should be commended for taking its suspension seriously, actively engaging with the MCC throughout the period of suspension, and initiating important reforms. In that respect, removal of their eligibility suspension was well deserved. But is Yemen ready for a Threshold Program?
When Yemen was reinstated in February, it was still showing below-the-median scores for 13 out of 16 indicators in the most recent data. Current data shows that Yemen will fail the same five of six Ruling Justly indicators again this year, albeit with improvements in Rule of Law, Political Rights and Civil Liberties. We haven’t seen all the new Investing in People or Economic Freedom data yet, but based on partial updates and extrapolating from previous data, my best guess is that they have a shot at passing maybe 6 out of 17 indicators in FY2008. This is still a lower ratio of passed indicators to failed indicators than any other Threshold eligible country, but it is a marked improvement. In a sense Yemen is somewhat of a threshold case for a Threshold program.
We recently raised the question of how MCC is defining and purposing its Threshold program. The program was originally designed to help a handful of countries make targeted reforms to push them over the edge to full eligibility. In the first year of operations, the MCC described selection for the Threshold Program by saying the Board looked for countries that had to improve upon two or fewer indicators in order to meet the full MCA eligibility criteria. In addition, the Board would look for countries that also demonstrated a commitment to undertake policy reforms that would result in improvements in deficient MCC policy indicators. Beginning in FY 2005, however, the MCC applied a less specific selection process, stating only that "Threshold countries are countries that do not qualify for Millennium Challenge Account assistance but have demonstrated a commitment to meeting the eligibility requirements for MCA assistance in the future." This less specific definition has been applied in all subsequent selection rounds, making the Threshold program more of a "risk capital" account to support reformers at critical junctures with the hope (but not an expectation) that the program will help push countries over the hurdle to passing the indicators test. There are benefits to such an approach in terms of creating incentives for tough reforms and in terms of orienting countries to the business model of the MCC as they navigate toward full compact eligibility. But the risk of this more liberal interpretation is that boundaries of inclusion become less clear, making decisions about Threshold eligibility somewhat more arbitrary. With an increasingly tight budget situation, it is probably time for more precision on the mandate of the Threshold Program.
August 21, 2007
A Window of Opportunity in the Kyrgyz Republic?
Posted by Sarah Rose at 09:27 AM
*This is a joint posting by Sarah Rose and Sheila Herrling
Initially opposed to the selection of the Kyrgyz Republic as a Threshold eligible country in FY2006, the timing now appears right for the $16 million Threshold program the Board approved for the Central Asian republic on August 9.
The Kyrgyz Republic, when it was selected as Threshold eligible in FY2006, had failed every Ruling Justly indicator for three years in a row (with passable performance on Investing in People and Economic Freedom). At that rate, designing a targeted Threshold program to actually get the Kyrgyz Republic over the hurdle to eligibility would have been difficult, considering the range of interventions necessary to address all the indicators in question; thus it should never have been selected.
However, it looks like the MCC is taking advantage of a key, two-part window of opportunity in the Kyrgyz Republic. First of all, the new data from Freedom House and the World Bank Institute that will be used for the FY2008 Ruling Justly indicators show that while the Kyrgyz Republic will still fail all six indicators, it will score exactly the median score for three of them (Voice and Accountability, Government Effectiveness and Civil Liberties). Voice and Accountability, in particular, has been on an upward trend since 2003.
Through judicial reform, law enforcement reform, and criminal justice reform assistance, the Kyrgyz Republic’s Threshold Program targets two of the three indicators that it fails more substantially, Rule of Law and Control of Corruption. These two indicators have shown a pretty consistent decline since 2002-2003 (see below).
It is unlikely that Threshold assistance--even if it does help improve the targeted indicators (keeping in mind that the attribution of governance reforms to Threshold Program interventions is always tricky)--will be sufficient to get these two over the passing hurdle. However, the second part of that window of opportunity in the Kyrgyz Republic is that the current government, the opposition and civil society groups are more or less forming a united front in support of governance reform. The government has recently taken on a number of initiatives to make the judiciary more independent, transparent, effective, and decentralized, and the MCC is hoping its assistance can help give those reforms and reformers a boost by providing resources and confirming their importance.
The bigger issue for the MCC is to more clearly define its Threshold Program. Is it going to be a kind of "risk capital" account to support reformers at critical junctures without any expectation that the program will push failing indicators to passing? Or is it explicitly designed to help a small handful of countries truly on the cusp of full eligibility to pass and spend two years getting oriented to doing business with the MCC so it can hit the ground running should it become compact-eligible? Both have credible arguments, but the time for clarity has come.
February 14, 2007
To Yemen With Love On Valentines Day
Posted by Sheila Herrling at 02:55 PM
In somewhat of a surpise move, the Millennium Challenge Corporation Board of Directors reinstated Yemen's eligiblity to apply for Threshold Program finance. Recall that in a bold move in 2005, clearly distinguishing the MCC from other donor agencies, Yemen's eligibility was suspended due to massive slippages in policy performance against the 16 MCA eligibility indicators.
Yemen truly has shown remarkable and demonstrable effort in undertaking many policy reforms and, based on meetings I had with Yemeni officials it is quite apparent they care deeply about regaining the MCC "seal of approval" -- substantially more than The Gambia (whose eligibility was suspended in 2006). And, importantly, they believe (as do I) that the MCC's suspension from eligibility was THE motivating factor in the series of subsequent reform actions. "MCA Effect" in action.
"The proposed reform program designed for the MCA country plan as well as the process that ensued helped pave the way for the current reform momentum."
There is no doubt in my mind that Yemen should be congratulated for its tremendous reform efforts, even rewarded as was done by multiple donors with $4.7 billion in pledges last November at the Consultative Group meeting. Yet the timing of the MCC's decision puzzles me -- Why now? Why not wait until the FY08 indicator run is done where hopefully the reform actions will show up in the data, bringing Yemen closer to its other Threshold colleagues?
This is a situation when the transparency of decisionmaking based on objective performance indicators -- something that distinguishes the MCC from all other donors -- becomes problematic. Based on the FY2007 indicator run (latest publicly available), we see upward trends on political rights, corruption, immunizations, girls primary completion (not a steep trend, but still upward). That said, it also shows downward trends on fiscal policy, voice and accountability, and civil liberties. It fails a total of 13 of the 16 indicators, 4 more than the next lowest ranking eligible Threshold country. We still don't know whether the reforms will move any of those indicators in the next round. Technically, the indicators don't matter in a case of reinstatement; the MCC's Suspension and Termination Policy states only that:
"The Board may reinstate assistance or eligibility for a country that was subject to a suspension or termination upon the recommendation of the CEO, in full consultation with Board Members and agencies, that the country or entity has taken corrective action or has demonstrated a sufficient commitment to correcting each condition for which assistance was suspended or terminated."
But should the indicators matter? Should they play just as much of a role as they do at suspension? What do you think?
December 21, 2006
Moldova Signs $24.7m Threshold Program
Posted by Sarah Rose at 03:52 PM
*This post is co-authored by Sheila Herrling and Sarah Rose.
Last week the MCC and Moldova signed a Threshold Program agreement for $24.7 million aimed at targeting corruption. Moldova began its own anti-corruption reforms at the end of 2004, and MCC money will go toward strengthening independent watchdogs like NGOs and the media as well as the government’s own internal anti-corruption agency in order to address persistent corruption in the judiciary, the health care system, the tax and customs agencies, and the police.
Moldova is technically not on the "threshold" of eligibility at this point since it was one of the three new countries chosen as eligible for compact assistance in the recent FY2007 round, however Ambassador Danilovich has said "it is vital that Moldova commit itself to successful implementation of the anti-corruption initiative under the Threshold Program while it pulls together its proposal for a full-scale development Compact." This situation--where Threshold countries reach compact eligibility status before they finalize a Threshold Program--is an increasing phenomenon and has made us start thinking about the whether the Threshold Program is too targeted on improving the eligibility indicators. With several years' experience under its belt, it might be useful to examine the purpose, impact and potential other uses of the program. Send us your ideas to inform our forthcoming analysis.
More broadly, of the 11 Threshold Programs approved to date, only one--Burkina Faso--does not focus heavily on corruption. From its description, the Threshold Program can help address any policy weaknesses for countries close to eligibility, but is anti-corruption going to be the Threshold Program's main focus? Certainly corruption keeps many countries from eligibility, and aiding anti-corruption reforms, particularly where countries have shown internal commitment to them, can be helpful. We bat around two questions: First, is there any evidence that stand-alone corruption projects make a real, sustained difference in curbing corruption? Second, if the Threshold Program remains narrowly targeted to improving the indicators, might the MCC make more of a difference by Targeted other barriers to selection?
October 30, 2006
MCC Board Approves 2 New Threshold Programs
Posted by Sheila Herrling at 11:48 AM
Last week, the Board of the Millennium Challenge Corporation approved two new Threshold programs. It approved a $55 million grant to Indonesia to improve childhood immunization and curb corruption. It approved a $24.7 million grant to Moldova to fight corruption. Interestingly, Moldova passes the corruption indicator in the FY2007 round.
To date, the MCC has approved 11 Threshold programs for a total of $287 million, all but one targeted at corruption.
September 14, 2006
Jordan gets MCA Threshold Program...Two More on Way
Posted by Sarah Rose at 09:35 AM
On September 12, 2006, MCC approved a $25 million Threshold Program for Jordan. Jordan's Threshold Program aims to improve the country's performance on three of the indicators it failed in FY 2006: Political Rights, Voice and Accountability, and Trade Policy. Specifically, it will involve two components:
- Strengthening Municipal Governance: increasing public participation and awareness, promoting women’s involvement in electoral politics, building local government capacity, and encouraging local government responsiveness
- Modernizing the Customs Administration: streamlining the customs process, training customs officials, and upgrading hardware and software
This may be just the first of phase of MCC's relationship with Jordan, as it is anticipated that Jordan, an LMIC, will be selected for compact eligibility in November's FY 2007 selection. Recall that last year, although Jordan fully passed the indicators, the Board deemed it eligible only for Threshold Program finance.
MCC also announced that they expect to sign Threshold Program agreements with Indonesia and Moldova before the end of the year. We're looking forward to hearing more about these two.
June 20, 2006
2 New Threshold Programs Approved
Posted by Kaysie Brown at 09:45 AM
Two new threshold programs were approved late last week for Ukraine and the Philippines, both of which target corruption.
According to the MCC, the Philippines' $21m, 2 year program will:
reduce corruption by strengthening the Office of the Ombudsman and strengthening enforcement within three areas of the Department of Finance (DOF) -- the Revenue Integrity Protection Service (RIPS), the Bureau of Internal Revenue (BIR), and the Bureau of Customs (BOC).
Likewise, Ukraine's $45m, 2 year program aims to:
reduce corruption in the public sector through strengthening civil society's monitoring and exposure of public corruption, reforming the judiciary, increasing government monitoring and enforcement of ethical and administrative standards, streamlining and enforcing regulations and combating corruption in higher education.
Including these two programs, the MCC has so far approved threshold funding for 8 countries worth a total of approximately $180m. It bears emphasis that in all cases but one (Burkina Faso), the grants have focused on anti-corruption initiatives.
February 09, 2006
MCC Approves 2 New Threshold Programs-One Aha! One Hmmm...
Posted by Kaysie Brown at 06:39 PM
Yesterday the MCC Board approved threshold programs with Albania and Paraguay, both of which seek to tackle corruption. The Albania program raises many of the questions Sheila discussed in her blog on the Tanzania Threshold Program, on whether the programs approved to date stack up to the MCC's stated objective. The Paraguay program, however, appears to get it right.
As the MCC has stated:
The Threshold Program is designed to assist countries that are on the 'threshold' of Millennium Challenge Account (MCA) eligibility for Compacts, meaning that they are committed to undertaking the reforms necessary to improve policy performance and eventually qualify for MCA Compact assistance. Threshold Program assistance is used to help such countries address the specific policy weaknesses indicated by the country’s scores on the 16 policy indicators that are central to the criteria and methodology for MCA Compact eligibility.
Albania's $13.85 million program will attempt to reduce corruption through reforms in tax administration, public procurement and business registration. Now, Albania failed every single ruling justly indicator and most of the economic freedom and investing in people indicators as well. In fact, Albania only managed to pass 4 of the 16 indicators. Admittedly, it seems as though Albania failed on a number of these only by a small margin, after turning in an average performance. That's a lot of cusps to be on and it's questionable whether this program will bring them over any of them.
Paraguay's $34.65 million program is another story --a real standout, targeting all the right areas based on its indicator performance, and it looks quite comprehensive and interesting to boot. Adopting an innovative approach, the MCC targeted Paraguay's surging informal economy and the length and cost of the business registration process by allocating funds for 10 specific initiatives.
The Paraguayan program is a good example of what the Threshold Program should be about: targeted projects that really attempt to improve a select number of indicators that can help the country "graduate" to the next level. One of the key advantages of the MCC's objective approach to development has always been the potential to quickly recognize obstacles to participation in the program. In that sense, the Threshold Program has the potential to serve as more than a finishing school for those who don't meet the MCC's standards; it can also provide a road map to becoming a good performer. With luck, the Paraguayan program can serve as a model for future Threshold Programs.
February 02, 2006
Foreign Aid to Tanzania to Fight Corruption: MCC Threshold Program Approved
Posted by Sheila Herrling at 11:39 AM
Yesterday, the Millennium Challenge Corporation approved an $11 million Threshold Program for Tanzania to fight corruption, including in the government procurement system. Tanzania is the third country to receive Threshold Program finance, preceded by Burkina Faso and Malawi.
The Threshold Program is, according to the MCC, used to:
"help selected countries address the specific policy weaknesses indicated by their scores on the MCC policy indicators. The Board of Directors selects countries as eligible for Threshold Program assistance based on their demonstrated commitment to meet the eligibility criteria for MCA Compact funding, including improvement of their scores on sixteen policy indicators."
Interestingly, Tanzania passed all six governance ("ruly justly" indicators. It's problem areas were health and girls' primary education expenditures, cost of starting a business, and trade policy.
November 16, 2005
MCC Willing to Say No (Or At Least, No More)
Posted by Sheila Herrling at 10:45 AM
Less publicized than the November MCC Board country selections is the important adoption of a policy on suspension and termination of MCC assistance and/or eligibility. The Board approved and then immediately applied its new policy to suspend Yemen from threshold program eligibility (received in 2004). Adoption and actual use of this policysends a strong signal that the MCC will not tolerate substantial policy and performance slippages. But Yemen was, in some ways, an easy decision -- since its selection in 2004, Yemen experienced slippages in 9 indicators, so that by 2006 it had failed almost every single indicator. There will undoubtedly be some more difficult decisions to take in the future when other countries experience slippage -- the carrot vs. the stick dilemna that has plagued development assistance programs forever. Will the MCC's performance-based structure allow it to be any different? It ought to -- MCC resources are supposed to be dedicated to those countries demonstrating, through measurable indicators, serious commitment to development and poverty reduction. Yemen was a good call and we'll be keeping a watchful eye on the consistent use of this important new policy.
November 15, 2005
FY06 Threshold Countries - Some Disturbing Choices
Posted by Steve Radelet at 06:31 PM
The MCC Board’s selection last week of 23 counties eligible to apply for funding for FY 2006 held relatively few surprises, and was very close to what we had anticipated. Although it is unfortunate that the MCC decided to add the lower-middle income countries this year, the Board limited the number of selected countries to two – El Salvador and Namibia.
The choice of 13 threshold countries has received much less attention. In fact, it is still very unclear what criteria the Board is using to choose threshold countries. While many of the countries seem to be reasonable picks, two choices are very difficult to comprehend and raise deep questions about the selection process: Jordan and the Kyrgyz Republic.
Although Jordan passes the indicators tests for the lower-middle income countries, it is not a democracy, and the Board passed over every other non-democracy that passed the tests (except Morocco). One could say, "thank goodness it wasn't chosen as a compact country," but putting it in the threshold program sets the stage for that progression, a decision that could seriously undermine the MCC. More to the point are the questions of the opportunity cost and the development impact of scarce MCC resources. Jordan already receives substantial USG financial support from the State Department and USAID. Jordan received assistance from the US totaling over $1.3 billion dollars in 2003 and 2004 alone, more than any country in the world other than Iraq and Afghanistan. With the MCC budget smaller than expected, the prospect of providing even more funding to Jordan at the expense of other countries makes little sense. Will a threshold program truly support development policy reforms in Jordan and even more critical, would the MCC be able to hold Jordan to the same performance standards to which it holds other MCC countries given its special status as a key ally in the war on terrorism? Don’t get me wrong – I fully support the US providing strong financial assistance to Jordan, a key ally. But these funds should continue to come from the State Department, as they do now, and not from the MCC.
The Kyrgyz Republic just has no business being a threshold country. It passes zero of the governance indicators – none – and scores particularly poorly on all the democracy related indicators. It is a very good example of the kind of country the MCC was designed to NOT provide financial assistance to. There are many other countries that are much more suitable for the threshold country than the Kyrgyz Republic. This choice cries out for explanation.
These two cases are particularly disturbing and deserving of an explanation from the MCC and reinforce our calls for greater transparency of Board decisionmaking.
We will be providing a more complete analysis of the threshold choices in the near future. Stay tuned.
November 08, 2005
MCC Announces FY2006 Countries
Posted by Sheila Herrling at 06:43 PM
Today, the MCC Board of Directors selected 23 countries as eligible to apply for FY 2006 assistance. It also announced 13 countries eligible for threshold program funding.
We just put this press release with Steve Radelet's reaction to the announcements out to the newswires: Hope you find it useful. - Sheila
Washington- November 8, 2005 – Foreign aid expert Steven Radelet welcomed new country selections announced today by the Millennium Challenge Corporation (MCC), the Bush administration’s flagship foreign aid program, but questioned the decision to include for the first time two lower-middle income countries.
Radelet, a senior fellow at the Center for Global Development and a former Deputy Assistant Secretary of the U.S. Treasury who served under both Democratic and Republican administrations, said he was pleased that the MCC had resisted pressure to rapidly expand the number of middle-income countries in the program, and had largely kept the focus on the poorest, so-called low-income countries.
“The rubber is meeting the road this year and the MCC faces some critical choices in terms of its mission, its institutional capacity, and its placement within the broader foreign assistance apparatus,” he said.
Of the 34 countries that passed the performance indicators, the Board chose to add only 6 new countries to its current list of 17 eligible for MCC funding. Two of the six—El Salvador and Namibia—are lower middle income countries, with average incomes much higher than the countries previously covered by the program.
“It’s great news that more countries passed the basic eligibility tests of good governance and strong economic policies. But not all of these countries that passed the tests were selected. Faced with a budget appropriation that will fall well below the requested $3 billion, the Board appears to be sending some clear signals that it will reward a more selective group of countries with larger, higher-impact programs,” he said. “I hope that the Board will clarify to the public why several countries that passed its criteria were not chosen for the program.”
Radelet said he disagrees with the MCC decision to expand from low-income countries to lower middle-income countries this year, or ever. “It makes little sense for the United States to be considering providing grants to countries that are three times richer than the low-income group on average, have access to other sources of financing, and for the most part have already graduated from other aid programs,” he said. “Faced with the budget reality and lack of accumulated experience, expansion was premature. But it could have been worse. The Board deserves credit for only selecting two lower-middle income countries this year,” he said.
Radelet, a leading expert on foreign aid and economic growth, was previously Deputy Assistant Secretary of the U.S. Treasury for Africa, the Middle East, and Asia developing policies on U.S. financial relations with the countries in these regions, including debt rescheduling and programs with the IMF, World Bank, and other international financial institutions. CGD’s MCA Monitor Initiative http://www.cgdev.org/section/initiatives/_active/mcamonitor tracks the progress of the Millennium Challenge Account.
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October 20, 2005
Pushing or Pulling Education and Health Reforms
Posted by Sheila Herrling at 03:00 PM
Thanks to Gene Sperling who, in his Bloomberg column today, argues for greater support for of the MCC and the war on global poverty. Sperling proposes a second tier of funding for MCC countries dedicated to health and education reform. Clearly, these two sectors are critical to poverty reduction and it would be nice to see the MCC more open to investment in these sectors. Where countries can show direct links between investments in these sectors and economic growth and show gaps in current funding, MCC makes sense. Word on the streets in Washington and in MCC countries is that infrastructure, private sector development and property rights projects are being pushed by the MCC, with health and education on the back burner. Particularly in the case of education, where research has shown a link between enhanced education levels and economic growth and where funding is less available than that for health right now, it is a shame that the MCC is not more actively encouraging eligible countries to propose bold investments targeted to growth and poverty reduction results. That said, MCC countries have an obligation to both own and actively push for the programs they believe to be most critical in transforming their economies toward prosperity. There is a balance to maintain between pushing ones own development priorities and country ownership.
Expanding the existing threshold program is sensible, if the budget permits. It should not, however, be exclusively health and education, although those will be sensible in many countries that do not pass the “investing in people” indicators. A separate tier of funding to enhance the efforts of countries that are making strides in education and health but are ineligible for regular MCC funds will prove difficult in a reality of more eligible countries and less budgetary appropriations. It also runs the risk of tilting the balance between setting donor priorities and country ownership.
July 08, 2005
Burkina Faso Gets $12.9 Million Threshold Grant
Posted by at 03:43 PM
Burkina Faso will receive a $12.9 million MCA grant to improve girls' primary education completion rates, the MCC announced today. The grant is the first of its kind for a Threshold country.
Managed through USAID, the Threshold Program provides assistance to countries that demonstrate a significant commitment to meet MCA selection requirements but nevertheless fail to complete the conditions.
Countries eligible for the Threshold Program are invited to submit funding proposals geared towards improving their performance in the indicators they missed in the selection process.