MCA Monitor Blog
January 24, 2008
CEO Danilovich Enters the Blogosphere
Posted by Sheila Herrling at 05:55 PM
Yesterday, the MCC launched its CEO into the blogosphere with a new communications tool -- the CEO Blog. Although not the first of its kind for a U.S. government agency -- EPA, DHS, State Department, and the Library of Congress have blogs populated by staff -- only one other agency, HHS, has a blog whose main blogger is the Agency's head. Unlike Secretary Leavitt's blog, however, CEO Danilovich's does not accept comments. Perhaps this will change over time.
I think this is a tremendous addition to an already stepped-up communications and public outreach effort by the MCC. And I think it could prove to be a valuable tool through which the MCC can publicly share the successes as well as the lessons learned by both the MCC and its partner countries during the compact design and implementation phase. Danilovich, in fact, does exactly this in his first posting. Bravo!
April 20, 2006
Strategic Management or Rearranging Deck Chairs on the Queen Mary?
Posted by Sheila Herrling at 04:59 PM
It appears Rodney Bent has been elevated to the number two position at the MCC, in yet another senior management change (recall the promotion of Steve Groff earlier). No press release yet to explain the addition of yet another layer the organization, just a title change in the senior staff listing. Also unanswered is whether the MCC will recruit a new VP for Development Policy and International Relations. Lots of layers for what was to be a streamlined organization. And unclear to me whether the layers are streamlining decisionmaking and/or providing a good check-and-balance role between operations and development effectiveness.
December 13, 2005
First Insight into Danilovich's Vision for MCC
Posted by Sheila Herrling at 11:14 AM
CEO Danilovich put some meat on the bones of his vision for the MCC (as well as rather strategically preempting many of the special interests and criticisms from the NGOs present) in a speech delivered to Interaction's annual CEO retreat last week. Danilovich sets forward 5 guiding principles:
"First, MCA is performance-based. As you know, eligibility for receiving assistance is predicated on a country's report card of 16 indicators measuring good governance, economic freedom, and investing in people. MCC seeks to target those countries most dedicated to breaking the cycle of poverty and ensuring our aid dollars have a transformative impact."
For the most part, I think the MCC has done well in implementing a complex process of applying a performance-based measurement system to its decisionmaking process. But there is significant room for improvement in making more transparent the use of Board discretion when the data doesn't show a clear picture. Find our analysis on the MCA Monitor website.
"Second, Millennium Challenge is not for everyone. Country selection will be driven by scores and data, and countries that are bastions of corruption, poor governance, and instability are not suited for the kind of assistance Millennium Challenge will provide."
Hmmm...on this one, the MCC needs to put a little more clarity into what defines a "bastion of corruption," and it needs to defend its choices on selecting countries that fail the corruption hurdle. For example, it would seem to me that a country that fails all six good governance indicators would be a likely candidate for corruption, poor governance and instability. Yet, Kyrgyz Republic, failing all six indicators, was deemed eligible for MCC threshold assistance. And Georgia, failing the corruption hurdle all three years, was deemed eligible and already has a signed compact. On a good note, it is refreshing to see that when a country experiences major performance slippages, the MCC is willing to cut them off, a la Yemen.
"Third, MCC is focused on helping the poor primarily through economic growth, market principles, and private-sector instruments...We will, of course, be careful not to exclude programs that remove impediments to growth and development, such as investments in education and health projects."
I admit that I am a little conflicted on the issue of MCC's niche. The MCC cannot and should not be all things to all people. It should, however, decide exactly what it is going to be, say so, and be willing to defend its choices. To do so, however, the MCC needs to set itself more firmly and strategically within the broader umbrella of U.S. foreign aid. If it is going to stay focused on short-term economic growth investments, it needs to make sure its investments complement the work of other agencies and the recipient government in the longer-term education and health investments. And the MCC absolutely has a responsibility to measure and communicate the poverty and social impact of its investments. It is not enought to simply say that growth is good for the poor.
"A fourth guiding principle is that recipient countries, not the donor, should have primary ownership of the Compact, and it is the recipient country that will conceive, develop, and implement its own program – with MCC oversight and monitoring."
I believe this is a key innovation of the MCC and we need to have the patience to allow this process to be real and to work. We need to be able to measure this process as a success (or failure) of the MCC just as we are so quick to say they are not disbursing money quickly enough. That said, I think the MCC could give a little more guidance to countries as to the scope and type of projects it is most likely to fund to save some time in the iterative process.
"[Fifth,] we must focus on a relatively small number of countries and develop large, transformative Compacts that allocate enough resources to actually make a dent on poverty in those countries."
Yes, yes, yes. And, therefore, adding lower middle income countries to the mix this year was not, in my opinion, a good decision. You can see my views on this in my earlier paper.
Sorry for the long posting but I think this speech was very well done (from a communications perspective) and important in terms of having a benchmark from which to measure Danilovich's ability to carry out what he said. As always, I would love to hear some reactions. Best, Sheila
November 16, 2005
Management Changes at the MCC
Posted by Sheila Herrling at 02:37 PM
Today, the MCC announced its new management team and what it is calling a streamlined structure. Some changes make a lot of sense, like merging the threshhold program with the selection criteria and development policy folks under the same department. And the new Department of Accountability(strategically, a great name!) houses the cross cutting issue experts who, by nature of being in a separate department, will hopefully be a hurdle for the country operations teams in terms of demonstrating the poverty reduction and social impact of Compacts as well as improvements in country public expenditure management systems leveraged with MCC assistance.
The sectoral experts are now merged into country programs. It is less clear to me how this enhances the effectiveness of MCC operations unless the MCC is planning on hiring more sectoral experts to be integrally involved in Compact preparation and performance indicator setting. And the absence of a social sector unit alongside the infrastructure, agriculture, and financial and private sector units only adds fuel to rhw fire on allegations that the MCC is discouraging eligible countries from submitting proposals for social sector projects that have low rates of economic return.
In my own view, this is a fine operating structure on paper. But what really matter is the decisionmaking process and the right staff skills mix within the organization. What happens when the accountability and development policy departments' recommendations differ from those of country operations? Are there enough experienced development professionals who can apply lessons learned to both help countries shape programs that will measurably reduce poverty and to help the MCC to not repeat the errors of the past?
I would love to hear other reactions to this announcement! Best, Sheila
November 11, 2005
WSJ on Danilovich
Posted by Sheila Herrling at 01:25 PM
Lots of crossed fingers both within the MCC and in the larger development community that John Danilovich will jumpstart the MCC. Interesting article in Wall Street Journal on Danilovich, copied below. And, as always, check out our MCA Monitor for more analysis on MCA issues.
New Chief of Bush's Foreign-Aid Plan Grapples With Cash Crunch
By MICHAEL M. PHILLIPS
Staff Reporter of THE WALL STREET JOURNAL
November 10, 2005; Page A6
WASHINGTON -- In 2002, President Bush announced that he would revolutionize how the U.S. distributes foreign aid, promising billions of dollars to stimulate economic growth in certain poor countries.
Three years later, that effort is in trouble. Mr. Bush has sought far less funding for his Millennium Challenge Corp. than he initially promised to request from Congress; lawmakers have given even less money than he has requested; the agency has awarded grants to just five countries, and critics say those it has given are too small to alter the fortunes of the recipients.
This means that John Danilovich, the former oil shipping executive and Republican activist who took over the agency this week, figures he has less than nine months to restore its reputation -- and, in the view of its supporters, save it from becoming a footnote in America's efforts to fight poverty overseas.
"I'd like to put the disenchantment that has grown in recent months behind us and move forward," Mr. Danilovich said in an interview. Instead of traveling abroad, he plans to spend his first two months on the job in the U.S. persuading lawmakers and antipoverty activists to give the agency another chance.
It is a new challenge for the 55-year-old Mr. Danilovich, who spent decades in the shipping industry and was a director of the Panama Canal Commission. Formerly a resident of London, he organized get-out-the-vote efforts among Republicans abroad for both presidents Bush, and served as ambassador to Costa Rica and Brazil.
But Mr. Danilovich has little experience addressing the severe poverty in the countries, such as Gambia and Mongolia, that could benefit most from Millennium Challenge grants. A number of the agency's supporters said they had hoped Mr. Bush would pick a more familiar figure to succeed Chief Executive Paul Appelgarth, whose tenure generated complaints on Capitol Hill that the corporation was too slow and provided grants -- called "compacts" -- that were too small.
"We see a program struggling to get off the ground and funding levels for compacts now emerging that lack the boldness necessary to break the cycle of poverty in countries prepared to take that step," Rep. Henry Hyde (R., Ill.), chairman of the House International Relations Committee, said during a hearing in April.
In Mr. Bush's original vision, the Millennium Challenge grants would be big enough to transform the local economy. They would go only to governments that met specific benchmarks for democratic rule, honest administration and free-market policies. Currently 23 countries are eligible to apply, and 18 are being coached through the process of becoming eligible. Madagascar, Honduras, Nicaragua, Georgia and Cape Verde have reached grant agreements with the agency, with three more in the pipeline.
Despite the initial hoopla over the Millennium Challenge Corp., Congress hasn't funded Mr. Bush's $3 billion budget request for the agency for the fiscal year starting Oct. 1. Mr. Bush initially had promised $5 billion; in the end, the House and Senate agreed on $1.77 billion for the year. In all, the agency has committed $1 billion of the $4.25 billion allocated by Congress.
"Left to me, once my country is listed (as eligible) I should be able to go and say, 'Give me the money to help my people,' " Ghana's president, John Kufuor, said in a recent interview.
Steve Radelet, a senior fellow at the Center for Global Development, a Washington think tank, said that if the agency doesn't improve its reputation, it may well find its funding frozen near the current level, instead of on the upward trajectory Mr. Bush envisioned. "This is kind of a make-or-break year for them," Mr. Radelet predicted.
Write to Michael M. Phillips at michael.phillips@wsj.com
November 07, 2005
Management Changes at the MCC
Posted by Sheila Herrling at 07:18 PM
John Danilovich just finished his first day on the job as the MCC's new CEO. And tomorrow he will find himself knee-deep in a muck of difficult issues facing the institution as it evolves out of its start-up phase into a full fledged foreign aid operation. With the return to Treasury of Clay Lowery, VP of Markets and Sector Assessments, MCC watchers already concerned with the low numbers of development experts and the lack of poverty reduction impact assessments of MCC programs, are wondering who in the MCC is the development policy and best practice balance to what appears to be an economic rate of return-focused country operations.
Word on the streets is that Rodney Bent will be appointed to a new position in the MCC, VP of Policy and International Relations. Rodney is an extremely experienced and well-respected budget and accounting professional who played a critical role in the transition of Iraq. Less obvious is the development policy, international organization, and on-the-ground experience that the institution needs in such a critical position and the number of staff he will have to support his efforts. And what happens to the vacated VP for Markets and Sector Assessments post? As the MCC grows, it will be crucial for it to have a team of development and technical/sector experts to make sure the lessons learned from past foreign aid programs are not repeated and that country operations perform the due diligence assessments and civil society consultations necessary to bring poverty reduction with growth. Let me know what you think -- we will be pulling together some thoughts on staffing and institutional structure in the next few weeks.