The Foreign Service Journal, April 2005

44 F O R E I G N S E R V I C E J O U R N A L / A P R I L 2 0 0 5 its “independence.” Finally, if institutional history is any guide, once the U.S. government has sunk major resources into a country, it will be reluctant to admit that that country’s government has not per- formed well, much less used the resources inappropriately or illegally. The United States has a long, unbro- ken history of practicing a policy of the three monkeys — “hear no evil, see no evil, speak no evil” — when its strate- gic allies have failed to use develop- ment and humanitarian assistance monies in a conscientious fashion. As long as they continued to serve the ultimate U.S. strategic interest, what- ever that happened to be at the time, these allies were never called to account. This tolerance for corruption and undemocratic practices led to billions of dollars going down “foreign rat holes,” to use the inimitable Jesse Helms’ terminology, and deprived local people of whatever benefits the development and humanitarian pro- grams might have produced. The more egregious examples, past and present, include Mobutu Sese Seko’s Zaire, General Suharto’s Indonesia, Boris Yeltsin’s Russia and Hosni Mubarak’s Egypt. As with other aspects of U.S. foreign policy, old habits die hard. This historical pattern and institutional practice will remain in place until new incentive structures replace the old. What To Do? Undoubtedly U.S. foreign assis- tance is in real need of reform, espe- cially as greater demands are placed on USAID’s development assistance programs to achieve rapid, visible The Millennium Challenge Act of 2003, 22 U.S.C.A. 7701, 7707(b), the MCC’s enabling legislation, outlines a particular methodology for country identification and selection. Sixteen measures of per- formance across three areas of focus are used: ruling justly, investing in people, and encouraging economic freedom. Among the 16 measures, one serves as the linchpin: the World Bank Institute’s Control of Corruption indicator (an index of surveys that rates countries on such things as frequency of “additional pay- ments to get things done,” and so forth). Just as President Bush’s recent speeches stated his administra- tion’s intent to elevate democracy promotion to the top of the U.S. for- eign policy agenda, fighting corruption will also receive higher priori- ty in the MCC. Inadequate performance against this measure can pre- clude a country’s selection or continued participation in the MCC, even if that country performs consistently well across all other mea- sures. The 16 performance indicators, from the MCC report on the crite- ria for FY 2005, are listed below, with their sources in parentheses: Ruling Justly Voice and Accountability (World Bank Institute) Rule of Law (World Bank Institute) Control of Corruption (World Bank Institute) Civil Liberties (Freedom House) Political Rights (Freedom House) Government Effectiveness (World Bank Institute) Investing in People Public Expenditures on Health as Percent of GDP (National Governments) Public Primary Education Spending as Percent of GDP (National Governments) Girls’ Primary Education Completion Rate (World Bank & UNESCO) Immunization Rates: DPT and Measles (The World Health Organization) Encouraging Economic Freedom Days to Start a Business (World Bank) Regulatory Quality Rating (World Bank Institute) Inflation (Multiple) Country Credit Rating ( Institutional Investor magazine) Fiscal Policy (National Governments and IMF WEO.) Trade Policy (Heritage Foundation) The MCC will hold recipient country governments accountable against these measures through a compact. This agreement will include a business plan for how the money will be used: identifying the sources of funding, designing the proposed activities and tracking the activities’ intended results. The MCC’s enabling legislation states that the compact shall “take into account the national development strategy of the eligible country,” and is to contain the following: (1) the specific objectives that the country and the United States expect to achieve; (2) the responsibilities of the country and the United States in the achievement of such objectives; (3) regular benchmarks to measure, where appropriate, progress toward achieving such objectives; (4) an identification of the intended beneficiaries, disaggregated by income level, gender and age, to the maximum extent practicable; (5) a multiyear financial plan, including the estimated amount of contributions by the MCC and the country, and proposed mecha- nisms to implement the plan and provide oversight that describe how the requirements of the first four paragraphs will be met, including identifying the role of civil society in the achievement of such require- ments; (6) where appropriate, a description of the responsibility of other donors in the achievement of such objectives; and, (7) a plan to ensure appropriate fiscal accountability for the use of assistance provided under section 202. For oversight, the Secretary of State will serve as the chairman for the Board of Directors of the MCC, which will serve as the imple- menting agency of the MCA. Neither the State Department nor USAID will participate directly in managing the MCC’s operations. Instead, a chief executive officer, appointed by the president, will run the new organization, with its staff drawn from a variety of government and nongovernmental agencies and serving limited-term appointments. This staff will be responsible for disbursing MCC monies directly to recipient country governments in the form of non-projectized assis- tance. MCC: Performance Measures and Accountability