A New Model for Foreign Aid

How the Millennium Challenge Corporation is changing how America helps the world's poor.

Critics often assert -- now more than ever -- that money spent on international development is money that is wasted. They argue that it's squandered on bad projects, that it bypasses the neediest or is spent in countries with governments that don't serve their people. But not all foreign aid is guaranteed -- and nor should it be. During these tough budget times, citizens across the world rightfully question the effectiveness of government spending, including funds spent on foreign assistance.

At the Millennium Challenge Corporation, an independent U.S. foreign aid agency with a global investment portfolio of more than $9.3 billion, we believe our assistance should be earned. Not only do we expect our investments to yield measurable returns, help the poor, and lead to sustainable private sector growth. We expect them to be matched by progress on a host of good governance benchmarks -- including accountability, protection of civil and political rights, and rule of law.

MCC is an integral part of the administration's comprehensive efforts to modernize U.S. development policies and programs, placing us at the forefront of foreign aid reform. And one of the most effective tools we have to carry out this mission is the ability to say "no."

Take, for example, our partnership with Malawi, a country with gross national income of only $330 per person. Our $350 million agreement in Malawi is expected to generate more than $2.2 billion in economic growth and benefit almost 6 million of the country's 15 million people by expanding access to electricity. The compact is a model for effective foreign assistance: It will incentivize needed policy reform, spur private investment, drive economic growth, benefit the poor, and create goodwill toward the United States.

The compact is also emblematic of effective U.S. foreign assistance in another important way -- it almost didn't happen. MCC suspended the compact in March because the Malawian government was not living up to its commitments to good governance. Only when the government proved through concrete actions and dramatic change that it was upholding the rights of its people did MCC decide to lift the suspension and go ahead with the investment in June.

Because of our demanding development model, we tell many countries "no" -- no to bad investments, no to corruption, no to backsliding on democratic rights, no to partnerships that fail to meet our strict selection standards.

At MCC, the power of no begins during our process of selecting potential partners. We evaluate the world's poorest countries against a set of 20 independent, third-party indicators that measure a country's commitment to ruling justly, investing in their people, and promoting economic freedom. Potential partners also must pass standards assessing corruption and democratic rights. Unfortunately, many of the world's poor countries simply do not pass the scorecard.

Because this process is now internationally accepted, a partnership with MCC can act as a seal of good governance, signaling to the world that a country is open for business and ready for increased private sector investment. Officials from poor countries routinely request that seal of approval -- but if they can't meet our criteria, the answer remains no.

Before we sign an agreement, we appraise potential investments to ensure the outcome will generate sustainable economic growth. Our economists and technical specialists pore over available diagnostic data, and if a proposed project will not produce an acceptable economic rate of return, we say no. If the benefits of an investment bypass the poor, we say no. If the benefits fail to support both women and men, we say no.

Throughout the life of MCC's partnership with a country, we continue to monitor that country's commitment to the principles of democratic governance. Meeting our expectations is not a one-time deal. Our partners that renege on their commitment to good governance, like Malawi did last year, have learned that these expectations are real.

When a military coup overthrew the democratically elected government of Mali in July, for example we terminated our agreement -- just as we did after Madagascar's coup in 2009. Deterioration in democratic rights also led us to place holds on or cancel part of the funding for Armenia, Nicaragua and Honduras.

Our collective experiences prove that commitments to good governance, investments in people, and economic freedom -- which includes the rule of law -- are the very foundation of achieving prosperity and economic growth. World leaders recognize this and will continue the global conversation on this important issue when they meet this month at the United Nations General Assembly, where the rule of law will be the central theme.

Our stance is clear: If your country is not committed to these principles, the Millennium Challenge Corporation will say no.



Is America Ready for a Male Secretary of State?

Running Foggy Bottom is a tough job -- maybe too tough for a man.

Foreign policy has long been one of the last great bastions of sexism. But as glass ceiling after glass ceiling is shattered in Washington, the time has come to ask when one of the last great barriers will be overcome: Is America ready for a male secretary of state?

From a theoretical standpoint, there is no real reason that a man couldn't do the job. But in the salons of Georgetown and the halls of Foggy Bottom, there continues to be a steady undercurrent of chatter that a man just wouldn't be up to it. Right or wrong, here are some of the justifications foreign-policy insiders cite when they make the case that appointing a man as the highest-ranking diplomat in the land would be an overreach.

First and foremost, many wonder whether a man would have the necessary endurance to do the job. Secretary of State Hillary Clinton has visited more than 100 nations during her tenure, flown 897,951 miles, and spent 376 days abroad. By making it to 110 countries in just one term, Clinton broke the previous record for most countries visited by a secretary: 98, held by Madeleine Albright. And although Condoleezza Rice visited fewer countries, she did log more than a million miles in the air. Not many men can point to those kinds of frequent flyer miles.

But beyond just the raw stamina needed to robustly represent the United States at home and abroad, others wonder if a man would simply bring the same skills to the table as does a woman. In numerous studies, women have been ranked as more emotionally intelligent than men while enjoying a greater ability to empathize with their interlocutors. Both men and women consistently rate women as better listeners than men. While some level of stereotyping is likely at work in these findings, there is much to argue that women are more culturally attuned and adept at interpersonal skills than their male counterparts. What skills could be more important for a good diplomat?

The pro-women camp doesn't just hang its hat on the touchy-feely side of diplomacy. Certainly, when thinking about secretaries Clinton, Rice, and Albright, there are many who have questioned their policies and abilities from both the left and the right. That comes with the territory. But one would be hard-pressed to find someone who argued that any of these three secretaries was too soft for the job. I don't mean to be too blunt about it, but are there any men out there right now who would bring the same level of toughness to the position? Because of a desire for political correctness, can we risk appointing a man to this job when we are unsure if he will be tough enough to stand up to tyrants in Iran, North Korea, and Cuba?

It is also important to note that secretaries Albright, Rice, and Clinton have all been able to give total commitment to their jobs, at some level of personal sacrifice. Albright was divorced long before her diplomatic career reached the highest levels. Rice never married or had children. Clinton enjoys the relative freedom of being married to a former president of the United States, who is a very active globe-trotter himself. Putting it delicately, some wonder whether a man with more "traditional" family commitments simply would have the time, energy, and focus required to be fully effective as secretary of state. As many a family-minded man has learned, in the demanding and competitive world of modern diplomacy, you just can't have it all.

And there is the great intangible: star power. Is there any man out there right now who could inspire the "Texts from Hillary" feed that generated 45,000 followers on Tumblr in just a few days? Does anyone recall a senior male diplomat who is a good enough concert pianist that he would be comfortable performing for Queen Elizabeth at Buckingham Palace the way Rice did in 2008? Can we imagine the Smithsonian displaying the accessories of a male diplomat and how they were used to deliver subtle but powerful diplomatic messages the way Albright used her pins and broaches?

Maybe as Mitt Romney struggles to gain traction in the presidential race, he will be tempted to engage in some classic special-interest politics and promise to appoint a man as secretary of state. The move would certainly be welcomed by American men who often feel aggrieved and underappreciated in the workplace. And certainly men remain an important minority when it comes to presidential voting (they constituted 46 percent of voters in the 2008 elections).

We just hope a man would be up to the task.

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