The Millennium Challenge Account: Transforming US Foreign Assistance Policy

Radelet, Steven

doi:10.22459/ag.11.01.2004.04

Cited by 2 publications

(2 citation statements)

References 7 publications

(9 reference statements)

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“…The criteria applied to arrive at this list have been described by Radelet (2004), which led him to predict a slightly different list of eligible countries. By comparison Benin, Cape Verde, Georgia, Mali, Mozambique and Vanuatu are in, and Bhutan and Vietnam are out.…”

Section: Applying Positive Conditionalitymentioning

confidence: 99%

Applying Conditionality to Development Assistance

Rich¹

2004

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Applying Conditionality to Development AssistanceRoland Rich he announcement on 6 May 2004 by the Millennium Challenge Corporation (MCC) of the 16 countries eligible to receive funding under the Bush Administration's Millennium Challenge Account (MCA) is a key step in the process of determining the direction of development assistance by applying quantitative international comparators to the governance performance of developing countries. It is the latest in a series of conditionality strategies aimed at making aid 'effective'. It is also the most sophisticated in terms of quantification of the eligibility conditions, giving the impression that the direction of aid flows has moved into a scientific direction of applying solid statistical information in a formulaic manner, thus making the system both transparent and reliable. The MCA process has the advantage of learning from previous experience, but whether it will be able to 'solve' the problem remains in doubt.This paper looks at the context for this initiative by tracing some of the key historical episodes shaping development assistance in an attempt to understand the increasing reliance on conditionality. A broad taxonomy of conditionality is proposed. The paper also examines the MCA process to date, looking at the growth of, and reliance on, statistical comparators as the critical decision-making tool. It concludes with some thoughts on the place of conditionality in development assistance and the place of statistics in conditionality.It is not within the aims of this paper to comment on, or attempt a measurement of, the effectiveness of aid. This is one of the big questions in development assistance. Recent work demonstrates the need for far greater care in tackling this issue and, in particular, the need to disaggregate emergency aid, institution-building aid delivering benefits over the longer term, and aid intended to stimulate growth in the shorter term (Clemens, Radelet and Bhavnani, 2004). While the debate on aid effectiveness continues, the working assumption in the development assistance community is that improvements in direction and delivery are necessary. Conditionality continues to be a key part of the formula.

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Section: Applying Positive Conditionalitymentioning

confidence: 99%

Applying Conditionality to Development Assistance

Rich¹

2004

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“…2 2 See Collier and Dollar (2001, 2002); Beynon (2003); Munro (2005) and more recently Amprou, Guillaumont and Guillaumont (2006) and Radelet (2008) on the ‘selectivity’ issue. Isopi and Mavrotas (2009) test the selectivity hypothesis by linking together aid allocation and aid effectiveness in an empirical study using data for all major donors spanning the period 1990–2003. …”

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confidence: 99%

Aid Effectiveness: Looking at the Aid–Social Capital–Growth Nexus

Baliamoune‐Lutz

Mavrotas

2009

Review Development Economics

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The authors examine the impact of institutional quality and social capital on aid effectiveness. They find strong evidence that social capital and institutions enhance aid effectiveness. Moreover, once they account for the role of social capital and institutions, the impact of policies tends to disappear. These findings have important policy implications as they indicate that conditioning aid allocation on "good policies" may not lead to an optimal (or fair) allocation of aid, as countries with high social capital at the macrolevel could actually make good use of aid regardless of the quality of policy. This casts doubt on the conclusions in Burnside and Dollar (2000) and the policy lessons derived from their findings.

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The Millennium Challenge Account: Transforming US Foreign Assistance Policy

Cited by 2 publications

References 7 publications

Applying Conditionality to Development Assistance

Applying Conditionality to Development Assistance

Aid Effectiveness: Looking at the Aid–Social Capital–Growth Nexus

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