Millennium Challenge Corporation: Compact Implementation Structures Are Being Established; Framework for Measuring Results Needs Improvement
GAO-06-805
Published: Jul 28, 2006. Publicly Released: Jul 28, 2006.
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Highlights
In January 2004, Congress established the Millennium Challenge Corporation (MCC) to administer the Millennium Challenge Account. MCC's mission is to reduce poverty by supporting sustainable, transformative economic growth in developing countries that create and maintain sound policy environments. MCC has received more than $4.2 billion in appropriations, and, as of May 2006, it had disbursed $22.4 million to four countries whose signed MCC compacts have entered into force. For the first three countries with compact entry into force--Madagascar, Cape Verde, and Honduras--GAO was requested to examine (1) key aspects that MCC reviewed, and the criteria it used, in its due diligence assessments; and (2) the structures that have been established for implementing the compacts.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Millennium Challenge Corporation | Because of the central role of reliable economic analyses and the importance of partnering with countries in achieving MCC goals and ensuring accountability for MCC programs, the Chief Executive Officer of MCC should ensure that MCC officials, in partnership with country representatives, perform economic analyses that more fully reflect the countries' socioeconomic environment and are better understood by country public and private sector representatives. |
Closed – Implemented
MCC has revised its process of developing economic analyses and increased its up-front engagement with compact countries. MCC now requires eligible countries to prepare an initial analysis that identifies constraints to development and requires wide consultation within the country on this analysis. Following consultation with MCC on the constraints analysis, MCC requires countries to prepare a project concept paper for MCC review. After consultation on the concept paper, countries, often with MCC assistance, then present and analyze the projected benefits of the compact projects.
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| Millennium Challenge Corporation | Because of the central role of reliable economic analyses and the importance of partnering with countries in achieving MCC goals and ensuring accountability for MCC programs, the Chief Executive Officer of MCC should, to the extent practical and cost-effective, improve MCC's monitoring and evaluation capabilities by obtaining more accurate and reliable baseline data needed to permit tracking progress during compact implementation; ensure a clear linkage between MCC's economic analyses and monitoring and evaluation frameworks; develop policies, procedures, and criteria for establishing targets and for adjusting those targets if unforeseen events affect outcomes; and take steps to ensure the timely development of the needed research design for randomized controlled trials, if they are undertaken, prior to project implementation. |
Closed – Implemented
Since we made this recommendation, MCC has taken a number of steps to improve its monitoring and evaluation capabilities. To improve the accuracy and reliability of its baseline data, MCC has expanded the use of the authority given it in section 609(g) of the Millennium Challenge Act to help prepare for compact implementation by undertaking data gathering efforts or refining existing data surveys. MCC has greatly expanded its Guidelines for Economic and Beneficiary Analysis. Further, its most recent guidelines on monitoring and evaluation include a requirement that the compact include key indicators drawn from the variables in the economic analysis at the goal, objective, and outcome level--with their definitions, baseline values, and targets. These guidelines also include guidance on establishing targets and outline a procedure for modifying these targets. Finally, MCC has developed a framework for assessing the opportunities to use randomized controlled trials and has established a procedure whereby the contracted evaluation firms work with project implementers during compact development to ensure that project implementation supports the impact evaluation. MCC has also hired staff familiar with integrating randomized controlled trials into its evaluations.
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Topics
AccountabilityDeveloping countriesEconomic analysisEconomic growthEvaluation criteriaFederal corporationsFinancial managementFiscal policiesPerformance measuresProgram evaluationProgram managementProgram goals or objectivesProgram implementation