May 13, 2014
Fighting Corruption with Better Data
MCC’s Commitment to Fighting Corruption
The Millennium Challenge Corporation is committed to investing only in countries that share its values, from respecting the rule of law to advancing women’s rights. MCC is known for its annual scorecards that use public, independently produced data to evaluate potential partner countries on how committed they are to those values. These scorecards are a key tool in the data-driven decision making process used by MCC’s Board of Directors to determine which poor but well-governed countries deserve an MCC compact, a large, five-year investment designed to reduce poverty through economic growth.
MCC is fundamentally committed to combatting corruption. Corruption is an obstacle to economic growth by increasing costs, lowering productivity, discouraging private sector investment, and reducing confidence in public institutions. American businesses seeking out opportunities abroad want environments that are free from corruption and conducive to job creation.
Because corruption is an unacceptable tax on economic growth, fighting it has always been a cornerstone of MCC’s approach to poverty reduction. In fact, in order to pass MCC’s scorecard, countries must pass the control of corruption indicator, one of 20 indicators on the scorecard. In addition, in order to protect U.S. taxpayer dollars, MCC takes stringent measures—often adopted by partner countries in their own government procurement systems—to prevent, detect and respond to instances of possible corruption in MCC-funded programs.
The Data Challenge … and Opportunity
With solid data, MCC is better positioned to select partners that are standing up to corruption, and to incentivize other countries to improve their anti-corruption efforts.
The challenge lies in measuring countries' efforts to fight corruption. The very nature of corruption—hidden, illegal and unrecorded—makes it extremely difficult to measure. While MCC uses the best data available to measure and track corruption, we are committed to doing even better.
That is why MCC is working to encourage the production of new or improved data that measure a country government’s specific efforts to combat corruption and improve its governance.
In April 2014, MCC took the initiative to partner directly with experts from civil society, the development and philanthropic communities and the private sector to co-lead the establishment of what is being hailed as a first-of-its-kind Governance Data Alliance. Working with Global Integrity, and with support from Omidyar Network and The William and Flora Hewlett Foundation, this budding alliance has attracted interest from dozens of organizations.
The Governance Data Alliance has the potential to fill the gaps for measuring governance, uncovering the best data available for identifying countries that share a real commitment to fighting corruption. This data will be useful not just for MCC, but also for the private sector, civil society, development organizations, other government agencies, lawmakers, and anyone with an interest in fighting corruption. MCC is excited to continue playing a leading role in improving governance, promoting transparency and helping to ensure that U.S. development assistance goes to countries that share its values.