Phase I: Analysis

The first steps eligible countries must take to develop an MCC compact are to recruit a country Compact Development Team; conduct preliminary analyses of constraints to growth, poverty reduction, and private investment; and commence public consultations.

Form a Compact Development Team: The first step eligible countries should take is to designate a Coordinator to lead the compact development process.  The Coordinator should be empowered to run the compact development process and have access to senior-level officials.  The Coordinator should be supported by full-time staff (Compact Development Team) and have dedicated financial and administrative resources. Initial Compact Development Team members should include an Economist, Private Sector Liaison, and Social Scientist.  The team will grow over time to include sector experts in monitoring and evaluation, environmental and social analysis, sector specialists, project management, financial management, procurement planning, and legal counsel.

Conduct preliminary analyses:

  • Constraints Analysis: Once the Compact Development Team has been formed, its first task is to conduct an analysis of the country’s principal constraints to economic growth based on available empirical data..
  • Investment Opportunity Process: The Investment Opportunity Process is a complement to the Constraints Analysis. The process is intended to help Compact Development Teams identify and develop private investment opportunities in or complementary to a compact program.
  • Social/Gender Inequality Analysis: Compact Development Teams analyze how legal, policy, institutional, economic and socio-cultural inequalities constrain poverty reduction and limit the distributional impacts of growth. This information provides a complement to the Economic Constraints Analysis and the Investment Opportunity Process by identifying obstacles to the economic advancement of women, the poor, and other marginalized groups, and the implications of different investment proposals for mitigating these obstacles.
  • Commence consultations: Once the preliminary analyses above are underway, the Compact Development Team should initiate a participatory consultative process with civil society, non-governmental organizations, the private sector, and government stakeholders to validate the findings of the analyses and identify priority activities to help address constraints to economic growth.

The purpose of the steps above to prepare the analytical framework the Compact Development Team will use to present and justify its initial project proposals to MCC. Once preliminary analyses and public consultations have been completed, the Compact Development Team should review the root causes of the constraints to economic growth and alternative courses of action to address those constraints. This analytical process will lead to an economic theory of change that will underlie the Compact Development Team’s project proposals.