The Millennium Challenge Corporation (MCC) is an innovative and independent U.S. foreign aid agency that is helping lead the fight against global poverty.
Created by the U.S. Congress in January 2004 with strong bipartisan support, MCC has changed the conversation on how best to deliver smart U.S. foreign assistance by focusing on good policies, country ownership, and results. MCC provides time-limited grants promoting economic growth, reducing poverty, and strengthening institutions. These investments not only support stability and prosperity in partner countries but also enhance American interests. With cost-effective projects, a lean staff, and an evidence-based approach, MCC is a good investment for the American people.
What is distinctive about MCC?
MCC forms partnerships with some of the world’s poorest countries, but only those committed to good governance, economic freedom, and investing in their citizens. MCC is a prime example of smart U.S. Government assistance in action, benefiting both developing countries and the United States through:
- Competitive selection: Before a country can become eligible to receive assistance, MCC’s Board of Directors examines its performance on independent and transparent policy indicators. Countries’ support for sound economic and social policies and democratic governance plays a significant role in ensuring inclusive economic growth reaches the poorest people in society. By focusing on economic growth in countries with good governance, U.S. development dollars have a bigger impact on poverty reduction.
- Country-led solutions: MCC requires selected countries to identify their priorities for achieving sustainable economic growth and poverty reduction. MCC works in close partnership with partner country governments to help them refine their programs, which are developed in broad consultation with civil society and the private sector and considered alongside long-term national development strategies. Projects that are driven by partner countries and incorporate local perspectives lead to sustainable know-how and self-sufficiency that continue long after MCC’s Investment ends.
- Country-led implementation: Partner countries set up a local Millennium Challenge Account (MCA), an accountable entity responsible for compact implementation overseen by MCC when a compact is awarded. Monitoring of funds is rigorous and transparent, often through independent fiscal agents. Country-led implementation builds the capacity of local staff in partner countries and increases the accountability of government and the MCA to its citizens.
MCC grants complement other U.S. and international development programs that not only help poor countries rise out of poverty but also create a more secure and prosperous home front. There are three primary types of MCC grants:
- Compacts—large, five-year grants for selected countries that meet MCC’s eligibility criteria
- Concurrent Compacts for Regional Investments—grants that promote cross-border economic integration, and increase regional trade and collaboration
- Threshold Programs—smaller grants focused on policy and institutional reform in selected countries that come close to passing MCC’s eligibility criteria and show a firm commitment to improving their policy performance
What is MCC achieving?
MCC projects tackle some of the most pressing challenges people face in developing countries, like supplying electricity so businesses can operate and students can study after dark; providing clean drinking water so women don’t have to walk long distances—sometimes at great personal risk—to get water for their families; and building roads so farmers can get their goods to market and children can get to school. MCC has invested more than $12 billion in compact and threshold programs worldwide that support country-led projects in areas like:
- agriculture and irrigation
- energy and power (generation, distribution, and transmission)
- finance and enterprise development
- land rights and access to land
- transportation infrastructure (roads, bridges, ports)
- water supply and sanitation
Guided by its founding principles, MCC’s investments have successfully delivered projects that are improving the lives of millions of people around the world.
- Create jobs and expand markets
- Build a more stable world
- Promote growth through infrastructure
- Invest in the next generation
- Incentivize policy and institutional reform
- Empower women and girls
- Increase the capacity of partner governments
- Give entrepreneurs tools to succeed
- Lay the groundwork for healthy communities