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.