During the agency’s September 2023 board meeting, MCC’s Board of Directors endorsed two key improvements to the education indicators on MCC’s scorecards for Fiscal Year 2024.
MCC publishes scorecards each year to determine which countries may become eligible for its assistance programs. Those scorecards consolidate countries’ scores for each of the 20 policy indicators MCC uses to help guide its selection process.
MCC regularly reviews the indicators on the MCC scorecard to ensure use of the highest quality data and methodologies available. As new datasets become available and our understanding of the links between governance and poverty reduction evolve, regular reviews of the indicators are essential. MCC focuses on indicators with broad country coverage, regular updates, and publicly available data that are produced by third-party institutions.
The new indicators change how MCC views the success of a country’s investments in education. First, MCC is setting higher standards for girls’ education by replacing the indicator on girls’ enrollment in lower secondary school with one targeting girls’ completion of lower secondary education, measuring whether girls complete a critical component of their schooling. Second, MCC is replacing its indicator measuring government expenditures on primary education with a new indicator that covers expenditures for all levels of education, acknowledging the importance of higher levels of education.
Since Fiscal Year (FY) 2005, MCC has included some measure of girl’s education completion rates on the scorecard. Initially this indicator focused on primary education completion for all countries that received an MCC scorecard. In FY13, MCC raised the standard for countries in the higher income of our two scorecard categories, requiring that countries not only ensure that girls complete primary school, but enroll in secondary school as well. This was due in part to the fact that these countries had made substantial progress on getting girls to complete primary school but had room to grow on making sure they entered middle school. Countries in this income category have continued to make progress in girls’ education over the past decade, so we are now raising the benchmark again by shifting to measuring the share of girls that successfully complete middle school rather than just enroll.
This change will incentivize countries to invest in girls at a key time in their lives when many start puberty and may miss school or drop out entirely. The data show that countries in this income group continue to struggle to help girls complete middle school. While the median country in this category enrolled 98% of girls in middle school, only 83% of those girls graduated from middle school in the median country. Raising the bar directs resources toward steps that can support girls staying in school longer. With this change, MCC is also aligning with targets in Goal 4 of the Sustainable Development Goals that focus on completion instead of enrollment.
While countries in MCC’s higher income scorecard category have made progress enrolling girls in secondary education, countries in MCC’s poorest income group are still working to raise the share of girls completing primary school. The median for this indicator is lower for the poorest countries in MCC’s candidate pool in FY24 than it was in FY11 when this indicator was last updated. Therefore, MCC will continue to meet these countries where they are and incentivize policy improvements that will have the greatest impact for girls in these countries. MCC will continue to measure primary education completion rates for these countries, not out of a lack of ambition for these countries, but to focus resources where they are most needed.
MCC’s new indicator that measures overall education expenditures acknowledges the reality that a country’s education system should not be measured piecemeal within the context of incentivizing educational improvements. The quality of primary education is affected by the quality of the secondary and tertiary education received by teachers because of the outsized impact of teacher quality on educational outcomes. Countries that increase investment in primary education access without an adequate investment in secondary and tertiary education can face teacher shortages and are often forced to hire underqualified teachers to fill the gaps.
MCC changing its indicator to measure the whole education system incentivizes countries to invest in the full educational pipeline, ensuring sufficient numbers of trained teachers to meet the demands at the primary level. It also ensures that governments invest in the secondary and tertiary education required to prepare students for a range of higher skilled professions. This change is also consistent with the broader focus of the Sustainable Development Goals on inclusive education at all levels as a response to criticisms of the Millennium Development Goals that focused only on primary education. By measuring overall education, MCC is incentivizing countries to invest in skills needed for a modern, educated workforce and the teacher pipeline.
Raising the bar on girls’ education supports MCC’s recently published new Inclusion and Gender Strategy. Helping girls complete more schooling supports women’s economic empowerment, providing them with a wider range of employment opportunities. This change contributes to greater equality of educational attainment for women and girls. Increased schooling has other benefits: every additional year of secondary education that a girl receives reduces her chances of being a child bride by 5 percentage points in many countries, and the more education that women receive, the lower the rates of child mortality and violence in a society. This scorecard update demonstrates the importance MCC places on ensuring the inclusion of all communities in broad-based economic growth.
Country Selection and the MCC Effect
Evidence-based selection of partner countries is a cornerstone of MCC’s development model. Only those low- or lower-middle-income countries that meet MCC’s strict eligibility criteria can be selected to receive MCC grants. MCC’s Board of Directors assesses a country’s commitment to good governance using 20 policy indicators, which are compiled on the MCC scorecard. The scorecard draws data from independent, third-party institutions to transparently and objectively measure a country’s commitment to democratic governance, social investment, and economic freedom. These are areas MCC sees as critical to creating an enabling environment for sustained, inclusive economic growth.
The incentivizing aspect of MCC’s selection criteria is often referred to as “the MCC Effect.” Countries use the MCC scorecard as a roadmap for building institutional capacity, often before MCC invests a single program dollar. In doing so, countries make critical reforms to boost policy performance in hopes of qualifying for an MCC program.
MCC compact investments couple significant grant funding for large infrastructure with key policy and institutional reforms that aim to reduce poverty through economic growth. Countries that receive MCC investments are also historically more attractive to private investors because those countries have independently pursued government and business policies vital to sustained economic growth.
With these updates to MCC’s scorecards, MCC is boosting the metrics the agency uses to determine the developing countries that are most committed to good governance, economic freedom and investing in their citizens. As a data-driven agency, MCC will continue to look for opportunities to improve its selection process and ensure its partnerships meet with success.