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.