The MCC effect is not a chemical reaction, a new technology, or even some mythological phenomenon. Rather, it’s when the Millennium Challenge Corporation’s method of evaluating countries actually incentivizes reforms, even before the U.S. aid agency commits any money.
MCC only funds well-governed countries and has an annual benchmark for progress, which has spurred countries to take on reforms unilaterally. That’s what has happened in recent years in the Democratic Republic of Congo, where President Felix Tshisekedi adopted the MCC criteria as a blueprint for his country’s reform agenda in the hope it qualifies for funding and boosts its reputation.
That’s the MCC effect: the impact of the agency’s policy criteria beyond its direct investments.
About the author
Adva Saldinger@AdvaSal
Adva Saldinger is a Senior Reporter at Devex where she covers development finance, as well as U.S. foreign aid policy. Adva explores the role the private sector and private capital play in development and authors the weekly Devex Invested newsletter bringing the latest news on the role of business and finance in addressing global challenges. A journalist with more than 10 years of experience, she has worked at several newspapers in the U.S. and lived in both Ghana and South Africa.
