Who We Fund

The Country Selection Process

The MCC Board of Directors selects countries as eligible for MCC assistance. Transparency about the process and criteria that govern selection of country partners – which inform the Board’s eventual decisions – are a hallmark of the MCC model.

For a country to be selected as eligible for an MCC assistance program, it must demonstrate a commitment to just and democratic governance, investments in its people and economic freedom as measured by different policy indicators.

Four-Step Selection Process

  1. Identification of Candidate Countries
  2. Publication of MCC’s Selection Criteria and Methodology Report
  3. Publication of MCC Scorecards
  4. Selection of Countries to Develop Compacts or Threshold Programs

Step 1: Identify Candidate Countries

To be a candidate for MCC program assistance, countries must

  • Not exceed certain per-capita, annual income levels;
  • Not be subject to any number of U.S. or international sanctions.

The World Bank sets the income levels annually in early July. Based on this information, MCC establishes a candidate country report.

Step 2: Publish Country Selection Criteria and Methodology

The country selection criteria and methodology are the rules and measures by which the Board of Directors determines a country’s eligibility.

In determining country eligibility, the Board considers:

  • A country’s performance on the indicators;
  • The opportunity to reduce poverty and generate economic growth within a country;
  • Availability of funds.

In addition, for countries that are candidates for subsequent compact selection, the Board considers each country’s performance implementing its prior compact, including country progress towards achieving that compact’s results, the nature of the country partnership with MCC, and the degree to which the country has implemented the compact in accordance with MCC’s core policies and standards. When considering a country for a subsequent compact, the Board also takes into consideration evidence of improved scorecard policy performance and a commitment to sectoral reform.

The MCC Chief Executive Officer submits to Congress a report that describes these criteria and the methodology. By law, this report must be submitted to the appropriate congressional committees and published in the Federal Register not later than 60 days before the MCC Board selects compact eligible countries.  This report is referred to as the annual Selection Criteria and Methodology Report.

Accept Public Comment

Each year MCC solicits and considers public comment regarding the country selection criteria and methodology. The comment period for FY 2021 selection will close on October 22, 2020. Public comments may be provided through this online form.

Step 3: Issue Country Scorecards and Scorebook

The Country Scorecard consolidates an individual country’s scores for each of the policy indicators MCC uses to determine eligibility for its assistance programs. Each country identified in the Candidate Country Report has a scorecard.

Individual country scorecards are available by fiscal year in the Country Scorecard section and are also published as a Country Scorebook.

Step 4: Select Countries to Develop a Compact or Threshold Program

The Board of Directors selects eligible countries for MCC program assistance, typically in December of each year.

In determining country eligibility, the Board considers three factors:

  • A country’s performance on the indicators;
  • The opportunity to reduce poverty and generate economic growth within a country;
  • Availability of funds.

The Board’s determination of eligible countries is based primarily on the scorecards, although the Board also considers supplemental information as needed.

The selected countries, if they agree to participate, then develop a Compact Proposal with MCC.

Maintaining Compact Eligibility

Selection initiates a multi-year partnership dedicated to pursuing economic growth and poverty reduction through the development and implementation of a compact. MCC monitors the policy performance of compact eligible countries throughout the year. Once a country is selected, MCC expects it to:

  • Continue its reform process;
  • Seek to maintain and improve its overall policy performance on the indicators, as well as its commitment to good governance more broadly.

The Millennium Challenge Act does not require MCC to determine a country with a current compact as eligible annually, but compact-eligible countries that have not yet signed a compact are reselected each fiscal year during the time it takes to develop their compact.

A country remains eligible for MCC funds from the fiscal year in which it was chosen unless:

  • Funds from that fiscal year are exhausted;
  • The Board suspends the country from eligibility.

Not Meeting the Criteria

MCC recognizes that a compact-eligible country can generally maintain and improve policy performance, but not meet the formal eligibility criteria in a given year due to any one or combination of the following factors:

  • Graduation from the one scorecard income group to another due to increased GNI per capita;
  • Introduction of new indicators or new methodologies;
  • Improvements in the availability or quality of data;
  • Rising income-group medians;
  • Slight declines in performance.

None of these factors are likely to be serious enough to warrant a suspension of eligibility. If an eligible country does not meet the criteria in a given year but has not demonstrated a policy reversal or a pattern of actions inconsistent with the eligibility criteria, MCC may ask it to demonstrate efforts toward improvement by developing and implementing a policy improvement plan to address the concern(s) and to demonstrate its commitment to meeting the eligibility criteria.

If a country does demonstrate a significant policy reversal, MCC may issue a warning, suspension or termination of eligibility and/or assistance. Because of data lags and gaps, this pattern of actions need not be captured in the indicators for MCC to take action. For more information see MCC’s Policy on Suspension and Termination.

Suspension from Compact Eligibility

Even after a country has been selected for compact or threshold eligibility, MCC regularly reviews its partner countries’ policy performance throughout the development and implementation of a compact or threshold program. As part of this review, MCC may engage in a policy dialogue with partner countries, coordinating with our U.S. Government colleagues at the State Department, USAID and U.S. embassies regarding the country’s commitment and adherence to the MCC selection criteria.

According to MCC’s statute, a country may have its eligibility or assistance suspended or terminated if the country has:

  • Engaged in activities contrary to the national security interests of the United States;
  • Engaged in a pattern of actions inconsistent with MCA eligibility criteria; or
  • Failed to adhere to its responsibilities under a MCC program agreement.

For additional information, please see MCC’s Policy on Suspension and Termination.