MCC: A Pat on the Back, and Then a Push

See below for a guest post from Diana Ohlbaum, Co-Chair of MFAN’s Accountability Working Group

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When in 2013, the Millennium Challenge Corporation was ranked #1 in the world on Publish What You Fund’s Aid Transparency Index, it provoked as much trepidation as pride.  What do you do when there’s nowhere to go but down?

The MCC has spent most of its 10 years blazing a trail to broader country ownership, greater transparency, and a sharper focus on results.  But staying in the lead may prove harder than seizing it.  Sarah Rose and Franck Wiebe’s thoughtful and well-researched analysis of the MCC’s model explains its successes and challenges, and makes detailed suggestions for improvement.  Adopting many of these recommendations could help MCC stay at the forefront of development effectiveness.

To their excellent list, I would add the following ideas, which are admittedly more of a stretch:

  • Threshold Program.  In their focus on policy performance, Rose and Wiebe correctly note the lack of clarity about this program’s rationale and metrics for success.  Instead of either sharpening its current focus or eliminating it entirely, as the authors suggest, how about trying something new: using it to help countries establish a “clean”, well-functioning, transparent, and accountable procurement agency through which their own government, as well as external donors, could channel funds?  Using local systems is a critical element of country ownership, but finding systems that meet even the most rudimentary standards of public financial management can often be difficult.  Even if the MCC did not subsequently sign a compact with a country, creating an entity that was truly accountable to the public would help the government attract aid and investment and responsibly spend its own resources.  And the government’s degree of success or failure in building such an entity, with MCC’s help, would be a good measure of political will for reform.
  • Second Compacts.  If the MCC’s ultimate goal is to help countries “graduate” from assistance (which was the initial concept behind the compacts, as a transitional step from aid to trade), then one thing we ought to expect is that countries complete the program with the capacity to spend resources responsibly.  Every country must deal with problems of corruption, but if a government is unable to build a road without losing half the money to graft or is unable to pay the teachers it hires and make sure they show up at their jobs, then both growth and stability will be at risk.  Given that the pool of candidates for second compacts is growing, what about adding a requirement that second compacts must be spent directly through a country’s own systems – thereby increasing the focus during first compacts on public financial management, and weeding out those countries that have not made sufficient progres
  • Contract Transparency.  MCC was built with transparency “in our DNA”, making not only its budget and results public but also its selection criteria, country scorecards, and compacts.  What would keep MCC in the vanguard and do wonders for accountability would be to publish the texts of all its contracts, and require that partner countries do the same (at least for contracts financed by the MCC).  Knowing the overall amount spent and the nature of the project is essential information for civil society, but knowing who is carrying out each activity, in which locations, to what specifications, under what conditions, according to what timeline, and at what cost, helps even more.  That information is contained in contracts, and American taxpayers as well as intended beneficiaries are entitled to know it.  It also provides a valuable monitoring tool to ensure that contractors are performing as promised in real-time, rather than waiting to find out about problems during an audit or evaluation, when they may be too late to fix
  • After-Action Reviews.  Pioneered by the U.S. Army, this kind of de-brief is designed to provide an honest look at what did (and didn’t) happen during the operation, why, and how to improve next time.  While MCC’s commitment to rigorous impact evaluations is impressive and welcome, these don’t tell the MCC – or more importantly, Congress – whether the compact as a whole was successful.  No doubt, if these reviews are to be fully candid then there would need to be a “sanitized” version for public release, but having a clear view of what we initially hoped to achieve, how and why that changed during the process, and what we would do differently, would earn MCC another gold star as a learning organization.  This is something already under consideration at MCC, but whether they are willing to measure performance against the original standards and targets is yet to be determined.

Changes like these could not only improve the MCC’s own performance and outcomes, but raise the bar for everyone else.  With a forward-looking new CEO at the helm, this is an opportunity for all of us to think big.

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