More about conditionality on foreign assistance

My friend Mauro sent me a NYT op-ed which was written by four members of the Board of Directors of the Milennium Challenge Corporation (among them Senator Bill Frist). In it, the Directors argue that the incoming administration should adopt the MCC as a central tool of its development policy. I have written before about the importance of attaching conditionality to U.S. foreign assistance; the Corporation takes a somewhat different approach - called indicator-based competition - by making countries compete for aid on the basis of their performance on a range of relevant criteria:

"Aid works best in countries whose governments are capable and committed. Before directing any American aid to a country, the corporation measures its performance on 17 indicators of democratic government, anti-corruption efforts, investments in health and education (particularly for girls) and economic freedom. Only those countries that perform strongly are allowed to compete for a five-year compact that makes them eligible to receive American aid for programs intended to reduce poverty and stimulate economic growth."

Mauro pointed out that the willingness of countries like China, Korea, Qatar, and Brazil to deliver no-strings-attached assistance (often in return for natural resources or support at the UN) has undercut the efficacy of U.S. conditionality. While the MCC has received mixed reviews in some quarters, it could represent the best way to make sure that U.S. foreign assistance benefits the people it is intended to help.