Good Public Governance for Whom?
Session title suggests two questions:
What is “Good Public Governance”?
Whom does it benefit and how?
The MCC approach to using development
assistance to improve public governance
The use of technical data by the MCC to
improve the effectiveness of ODA
Millennium Challenge Corporation
 MCC is a new US foreign assistance agency
designed to “reduce poverty through sustainable
economic growth”
 Progress, if defined as the reduction of
poverty, is strongly correlated with rising income
levels in poor countries
“We want to make decisions ourselves. It is our country, and
we have to take on leadership and responsibilities. If you take
a look at the last two issues, our vision and country ownership,
you will realize why the MCA is so important for us. Here we
have a new approach which helps us to implement our vision.”
--Marc Ravalomanana, The President of Madagascar
The Foundations of MCC’s Assistance
1)
2)
3)
4)
Rapid economic growth is essential
for significant poverty alleviation
Governance matters for aid
effectiveness
Country ownership is critical
The objective is to generate results
MCC Use of
Indicators and Statistics
Indicators to Determine Eligibility
Evidence-based Constraints Analysis
Monitoring and Evaluation
Good Governance Practices → Eligibility
 MCA eligibility is a reward to countries with good governance
and an incentive for others to improve policies
 Eligibility is based on scoring above the median on Corruption
and on at least half of 16 indicators in each of the three policy
categories:
Ruling Justly
Investing in People
Encouraging Economic Freedom
Indicators for Eligibility
Ruling Justly:
Investing in People:
 Civil Liberties
(Freedom House)
 Political Rights
(Freedom House)
 Voice and Accountability
(WBI)
 Government Effectiveness
(WBI)
 Rule of Law (WBI)
 Control of Corruption
(WBI)
 Public Expenditure on
Health (National Data)
 Immunization (WHO)
 Primary Education
Spending (WB)
 Girls' Primary Education
Completion (WB)
Economic Freedom:
 Cost of Starting a Business
(WB/IFC)
 Inflation (IMF, WEO, IFS)
 Fiscal Policy (IMF, WEO)
 Days to Start a Business
(WB/IFC)
 Trade Policy (Heritage
Foundation)
 Regulatory Quality Rating
(WBI)
WBI: World Bank Institute
WB/IFC: World Bank/Int’l Finance Corp
IFS: International Financial Statistics
WHO: World Health Organization
WEO: World Economic Outlook
Constraints Analysis
 Eligible countries undertake assessment before
developing program
 Objective is to identify binding constraints to
economic growth
 Analysis must be rigorous – based on evidence
and economic theory
 Program proposal should be directed at relaxing
these constraints
MCC is Results Based
 MCC will fund projects that can be
demonstrated to have an adequate economic
rate of return
 Specific objectives and measures of success
are developed as part of project design
 A monitoring and evaluation plan is an
integral part of each Compact
 Funding is contingent upon performance on
the indicators and meeting mutually agreed
benchmarks for program implementation
Conclusions
Statistics can enhance aid effectiveness and
enhance progress in reducing poverty by:
 Identifying countries where aid is more likely to be
used well to help target resource allocation;
 Identifying the problems that constrain growth to
help countries design appropriate remedies; and by
 Identifying, through rigorous impact evaluation, the
strategies that are most effective at achieving their
fundamental objectives to help inform future
program design
Thank you!
Franck Wiebe
Managing Director, Economic Analysis
Millennium Challenge Corporation
www.mcc.gov
MCA Compact Funding
(in millions of dollars)
Close to $3.0 Billion in Compacts Approved
$460.94
El Salvador
$109.8
Madagascar
$110 Cape Verde
$295.3 Georgia
$461 Mali
$307.3 Benin
$215 Honduras
$175 Nicaragua
$547 Ghana
$235.65
Armenia
$65.69
Vanuatu