The Millennium Challenge Corp.’s board on Tuesday selected Lesotho to begin developing a proposal for the country’s second compact, and decided not to move forward on proposals with Sierra Leone and Benin until they are able to again meet the benchmark indicator for “control of corruption.”
Although Sierra Leone and Benin both cleared that hurdle last year — and MCC found no evidence to suggest their regression in 2013 was the result of any changes to their policy environments — the performance was likely the result of “statistical noise” or variation in measuring the various indicators of corruption that MCC considers.
“We cannot connect it to policy. We are not able to draw a link between something the government did and the score,” Alicia Phillips, MCC managing director for development policy, told Devex. “That leads us to believe that there is more of the statistical noise side.”
Still, the board decided to send a strong message about the importance of the benchmark to encourage Sierra Leone, Benin and other aspiring MCC partner countries to undertake further policy reforms aimed at overcoming corruption as one of the main barriers for international investment.
“The outcome from yesterday makes really clear that this really matters,” Phillips said. “Looking at the evidence on the ground, we can’t find evidence of decline. But essentially the board is warning countries — you need to continue to improve, because a compact depends on that.”
In an upcoming exclusive interview with Devex to be published on Friday, the MCC senior official said that while MCC will work with Sierra Leone and Benin to survey possible policy reforms that could return them to eligibility, it is up to the countries themselves to drive those reforms forward and ensure they are effective.
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