The MCC Effect

Chart courtesy Bradley Parks and Zachary Rice, College of William and Mary

When asked to identify the three most influential external assessments of government performance from a list of 18 options, respondents to an independent survey of development stakeholders repeatedly identified MCC eligibility criteria. See the whole chart.

The MCC Effect refers to the positive impact of MCC’s rigorous policies beyond its direct investments in partner countries. MCC’s selection criteria provide incentives for countries to adopt policy reforms and strengthen institutions in order to become eligible for an MCC grant; many countries view their ability to meet MCC’s eligibility standards as a seal of approval, signaling to the private sector the country is wellgoverned and open for business.

MCC’s competitive selection process is a key contributing factor to the MCC Effect. In the selection process, MCC’s Board of Directors examines a country’s performance on independent and transparent policy indicators. To be considered for eligibility, countries must score well (relative to their income group peers) in the control of corruption and democratic rights policy areas. An eligible country must also pass half of the 20 selection indicators.

The effects of the MCC Effect

A recent independent study of the MCC Effect found evidence to support the idea that the prospect of MCC eligibility has served as an effective incentive for policy reform. About 92 percent of respondents stated that the MCC scorecards had an impact on reform. MORE

The MCC Effect

Read the five-page brief that explains the MCC Effect, what it is not, and how the effect can be tracked across stages of a continuum. READ