What Makes Effective, Accountable Aid?

Millennium Challenge Corp. CEO Daniel Yohannes. Photo by: MCC

In a time of lingering financial woes and decreasing government budgets, Millennium Challenge Corp. CEO Daniel Yohannes shares how his agency is helping to deliver effective and accountable aid.

MCC, according to Yohannes, focuses on selectivity of partner nations to ensure that only sound projects are funded and nations with robust governance and economic policies are supported.

“The ability to say no is a critical component of effective aid,” the MCC chief said in Jan. 13 speech at the American Enterprise Institute. “That leaves us saying yes to partnering with a smaller set of poor but well-governed countries and investing scarce U.S. development dollars in programs that show an economic return by raising beneficiary incomes – the only way to reduce poverty.”

Sharing the complete outcomes achieved by projects is also key to ensuring effective and accountable aid, Yohannes said.

Explained Yohannes: “Being accountable means telling the whole results story. Most people think of results as what comes at the end of the story―the happy ending. In part, we think about it that way too. But, the result we are most interested in seeing is increased incomes.

MCC is also in partnering with other donors and the private sector to improve the delivery of aid.

“Ultimately, however, it is the countries themselves and the private sector that will drive real economic growth … MCC investments look to remove constraints to growth so that the private sector will invest and flourish,” Yohannes said, noting that his agency is financing more public-private partnerships.

Promoting gender equality is also a crucial component of MCC-backed projects, he said.

“Gender inequality can be a significant constraint to economic growth and poverty reduction,” Yohannes said, noting that MCC has incorporated gender issues in selecting partner nations and evaluating projects.

Yohannes noted: “MCC, like other US government agencies, is operating in a budget-constrained environment. We challenge ourselves to make tough choices as good stewards of American taxpayer dollars. We employ a business-like approach to development investments, evaluating economic rates of return to decide which investments will deliver the greatest poverty reduction impact from every taxpayer dollar.”

About the author

  • Ma. Rizza Leonzon

    As a former staff writer, Rizza focused mainly on business coverage, including key donors such as the Asian Development Bank and AusAID.