MFAN Event Recap: On the Cutting Edge of Aid Effectiveness

On July 28, MFAN  hosted a public dialogue on the foreign assistance reform agenda with Sheila Herrling, the Millennium Challenge Corporation’s (MCC) Vice President for Policy and Evaluation, and Gayle Smith, Senior Director at the National Security Council (NSC). Entitled “On the Cutting Edge of Aid Effectiveness: Best Practices and Lessons Learned from the Millennium Challenge Corporation,” the event was moderated by MFAN Co-Chair the Hon. Jim Kolbe, Senior Transatlantic Fellow at the German Marshall Fund, and brought together a cross-section of development perspectives. The panelists examined how the MCC was working both independently and alongside USAID and other relevant agencies to maximize the effectiveness, accountability, and efficiency of U.S. foreign assistance dollars.

The MCC’s Sheila Herrling spoke about development best practices adopted by the MCC in pursuit of the organization’s “results agenda.” The MCC’s structure, small size, and unique mandate enables flexibility, specifically by establishing objective indicators, remaining independent of Congressional earmarks, choosing which countries will receive Compacts, and permitting  partnerships of longer duration.  Herrling acknowledged that while the MCC has had mixed results overall, several clear achievements stand out, such as farmer training projects in Honduras. She emphasized that the MCC was committed to transparency, and that all data from MCC programs, positive or negative, would be easily accessible.  Additionally, the MCC aims to return more than a dollar for every dollar spent on foreign assistance by growing the per capita income of its beneficiaries.

Herrling also addressed the MCC’s incentive effect, using the example of partner countries changing laws to improve women’s legal rights in advance of MCC Threshold programs or Compacts. Proactive policy, legal, and economic reforms made by partner countries demonstrate that the MCC is changing the dialogue between the U.S. and developing countries seeking to graduate from its foreign assistance.

The NSC’s Gayle Smith spoke about elevating foreign assistance as a foreign policy priority within the White House, and lauded the progress made by the interagency contact group on development in disseminating information on best practices and improving communication and consultation within the numerous agencies that contribute to U.S. foreign assistance. Smith addressed the steps being taken in the MCC and across the government to encourage country ownership. She said that more positive and sustainable development outcomes can be realized when governments are held accountable and allow their citizens to participate.  She also commented on the increased emphasis on selectivity in determining where U.S. foreign assistance dollars are spent, which will effectively end the approach that, “does a little bit of everything, everywhere.”  Selectivity is based on pure development criteria, but with the goal of making informed and tough choices when deciding what not to do and when to allow other donor nations to take the lead.

Smith categorized the Partnership for Growth—an experimental new initiative that promotes and supports broad-based economic growth in a select group of emerging markets—as the essence of President Obama’s Presidential Policy Directive on Global Development.  She said that the Partnership for Growth is employing the MCC criteria as a tool, and that partner countries have embraced it as a strategic economic dialogue with the U.S. Although still in its early stages, the Partnership for Growth is advancing toward its goal of moving more countries, “from development dependence to emerging, emerging markets.”

Stay tuned for a video of the event!


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