The Millenium Challenge Account: Foreign Aid and International Development Programs of the Bush Administration

The United States presidency is a complex role, encompassing both domestic and foreign policy responsibilities. As a major world power, the United States has a large role in the realm of foreign policy, and it is the duty of the president to assume the role of an international figurehead. Aside from being one of the most politically powerful nations, the United States enjoys its status as one of the wealthiest nations in the international system. However, immense political power and wealth have resulted in the need for the United States to devote a significant amount of its resources toward the assistance and development of those lesser-developed countries throughout the world.

The developing world (also called the Third World) constitutes a significant portion of our planet, with underdeveloped countries existing in almost every region of the world, including the Middle East, North Africa, Sub-Saharan Africa, Asia, Latin America, and the Caribbean. There is not one simple cause for underdevelopment in the Third World, and developing nations suffer from a host of developmental issues, such as poor governance, corruption, war and revolution, insufficient economic systems, and various public health crisis. As an international leader, the United States has traditionally accepted the responsibility to alleviate some of the suffering in the Third World and has allocated resources toward the development of poor nations. Within the United States government, agencies like the United States Agency for International Development (USAID), under the guidance of the U.S. State Department, have been established to develop and implement humanitarian and development projects to those countries most in need.

When examining the plight of nations of the third world, a simplistic approach to solving some of the developmental challenges would be to allocate money and resources to the poorest and most depraved nations; however, development is not this simple, as the challenges are complex and the solutions are not always clear. Building upon the institutions and methodologies of the past, the Bush Administration ushered in a new era of international development and foreign aid policy. Prior to Bush, it was often assumed that money was flowing into developing countries, but was ultimately ending up in the hands of corrupt government leaders who were using it for less-than-honorable purposes. Especially following the September 11^th attacks, the Bush Administration began to focus on international development as a national security issue. As noted by Bush in regards to his development programs, “We also work for prosperity and opportunity because they help defeat terror.”1 According to the administration, without a properly function government and thriving economy, Third World countries would theoretically become more susceptible to becoming havens for terrorists.

Additionally, a major focus of the Bush administration was the notion of accountability. These two elements, security and accountability, played a critical role in the formation of developmental assistance policy under the Bush administration. Ultimately, the key to assessing any policy decision is to examine to what extent the stated goals were achieved in practice. This chapter will examine the formation, details, methodology and goals of the central developmental assistance policy during the George W. Bush presidency – the Millennium Challenge Account. In addition, this chapter will examine how successful the Millennium Challenge Account was in achieving its goals of independence and wealth for the Third World, and security for the United States.

Millenium Challenge Account

In February 2003, President Bush introduced legislation that proposed new methods for the delivery and implementation of developmental assistance for Third World nations. This proposed legislation would establish a new system for the selection, delivery and administration of developmental assistance. The stated goal of the legislation was to dramatically increase the level developmental assistance by $5 billion a year by fiscal year 2006, and to establish an account for developmental aid, the Millennium Challenge Account (MCA), which would be administered by a small government-run corporation known as the Millennium Challenge Corporation (MCC).2 Bush also outlined new criteria and standards for the administration of development assistance. According to the proposal, countries would be eligible for aid from the MCA if they met the new standards set forth by the MCC.

For the distribution of developmental assistance, the Bush Administration believed that there was a direct link between financial accountability and developmental success; therefore, the standards set forth by Bush included a country’s ability to rule justly, to invest in its people, and to encourage economic freedom.3 Only those countries that satisfied those criteria would be eligible for increased aid and assistance from the MCA. Bush noted that the key to ending poverty throughout the world was tying increased assistance to performance and accountability, and that the MCA would promote the need for country ownership, financial oversight, and accountability.4 Rather than subscribing to older methods of distributing developmental aid, the Bush Administration had outlined clear guidelines that they believed would guarantee results in the Third World, ultimately ending, or at least drastically alleviating, the need for further U.S. assistance.

The legislation that followed, Millennium Challenge Act of 2003, largely reflected the goals that President Bush had laid out in his initial proposal. The Millennium Challenge Act and its stated goals and ideals appealed to both Democrats and Republicans in Congress, and the legislation passed by an overwhelming majority of 382 to 42 in the House of Representatives.5 As established in the legislative proposal, the Millennium Challenge Act of 2003 created the Millennium Challenge Corporation, which would be responsible for selecting and administering assistance and programs related to the MCA.

Under the legislation, the Board of Directors would consist of the Secretary of State, the Secretary of the Treasury, the administrator for USAID, the chief executive officer of the MCC, and the U.S. Trade Representative.6 Four other members on the Board would be selected by the President from a pool of individuals nominated by the minority and majority leaders in both houses of Congress.7 The act also outlined many limitations for the uses of developmental assistance. According the to legislation, developmental assistance could not be allocated for military training, anything that may prove to hazardous to the environment, abortions and sterilization, or any project that may result in substantial U.S. job loss.8

Also contained within the Millennium Challenge Act of 2003 is the methodology for the distribution of MCA funds. Under the new plan, developmental aid would not be distributed to eligible countries in the form of a blank check to be utilized the way in which the recipient country sees fit. The Millennium Challenge Act of 2003 established the Millennium Challenge Compact, which were mutual agreements between the United States, specifically the MCC, and the recipient country outlining the stated goals and objectives for various development projects. Section 609 of the Millennium Challenge Act outlines the roles of these compacts:

The Board, acting through the Chief Executive Officer of the Corporation, may provide assistance for an eligible country only if the country enters into an agreement with the United States, to be known as a ``Millennium Challenge Compact'', that establishes a multi-year plan for achieving shared development objectives in furtherance of the purposes of this title.9

The compacts themselves carried a number of requirements. In total, the Millennium Challenge Act outlined eleven requirements that must be met as part of the compacts. For example, the compacts had to contain the specific objectives and responsibilities of both the recipient and the United States, benchmarks to monitor progress, a multi-year financial plan, a plan to ensure accountability, and a plan to demonstrate how the recipient country planned to continue developmental projects once the compact has expired.10 In addition to these requirements, recipient countries had to demonstrate that a national development strategy was in place. According to the legislation, a national development strategy meant,

…any strategy to achieve market-driven economic growth and eliminate extreme poverty that has been developed by the government of the country in consultation with a wide variety of civic participation, including nongovernmental organizations, private and voluntary organizations, academia, women's and student organizations, local trade and labor unions, and the business community.11

Clearly, these Millennium Challenge Compacts were intended to ensure a holistic approach to development in each recipient country. Funding from the MCA was contingent upon each recipient country satisfying these strict requirements. These guidelines for funding fall in line with the Bush administrations desire for accountability. While the United States would maintain a position as a strong partner, the MCC left much of the responsibility to the countries themselves. By requiring recipients to establish plans for the continuation of development following the expiration of MCA compacts, the Bush administration was essentially forcing countries to take the reigns of their own projects and to truly work toward economic growth and independence.

The criteria for the selection of countries that would be eligible for developmental assistance from the MCA was the central and most innovative concept behind Bush’s newly adopted legislation. As established by the Millennium Challenge Act, the Board of Directors of the MCC would be assigned the task of establishing candidate countries and, out of those, selecting those that would be eligible for assistance. A country would be deemed eligible, if in relation to the other candidate countries, it could demonstrate that it possessed the criteria for eligibility, specifically its ability to rule justly, promote economic freedom and activity, and invest in its citizens.12 The primary methodology behind the selection of eligible countries was to compare the candidates to one another using a series of sixteen indicators.13 The indicators used by the Board of Directors corresponded to the three major criteria for selection – ruling justly, promoting economic activity, and investing in people.

In the 2004 Criteria and Methodology report, the Board took into account indicators such as Civil Liberties, Political Rights, Voice and Accountability, Government Effectiveness, Rule of Law and Control of Corruption as they related to the notion of a country’s ability to rule justly.14 Related to a country’s encouragement of economic freedom, the Board used indicators such as the Country Credit Rating, 1-year Consumer Price Inflation, Fiscal Policy, Trade Policy, Regulatory Quality and Days to Start a Business.15 Lastly, with respect to investment in a country’s citizens, the indicators established were Public Expenditures on Health as a Percent of GDP, Immunization Rates, Public Primary Education Spending as a Percent of GDP and Primary Education Completion Rate.16

Clearly, these indicators represent many of the factors that are typically indentified as the major causes for underdevelopment in the Third World. These indicators were intended to provide an objective basis upon which to compare all candidate countries. In order to be selected as eligible, a country had to be “above the median in relation to its peers on at least half of the indicators in each of the three policy categories and above the median on the corruption indicator.”17 However, even with these indicators in place, the Board of Directors still reserved the right to use discretion in interpreting and evaluating the information when making its final decisions.18

In subsequent years, the indicators for eligibility changed slightly as conditions in the Third World changed. For fiscal year 2005, the MCC substituted the indicator for Primary Education Completion rates for a more specific indicator, Girls’ Primary Education Completion Rates.19 The rationale behind the substitution was to not only demonstrate the need for eligible developing countries to closely invest in the education of its people, but to also stress the importance of women and girls and their capabilities as productive members of an economic system.20 As more and more reliable and consistent data became available to the MCC, further adjustments to the indicators were made in following fiscal years.

In FY06, the Cost of Doing Business became a new indicator, replacing Country Credit Rating under the economic activity criterion. According to the MCC, the cost of doing business indicator proved to be stronger than the country credit rating indicator, as the cost of doing business is easily measurable and often results directly from government policy.21 For FY08, the MCC and the administration made several changes to the indicators and incorporated newer, more updated indicators as well. For instance, in order to strengthen the Economic Freedom category, the MCC combined Days to Start a Business and Cost to Start a Business into one indicator entitled Business Start-Up, utilizing data and statistical information from the International Finance Corporation of the World Bank.22

Additionally, the MCC included new factors, specifically related to natural resources and land, in its list of indicators. Falling under the criteria of Economic Freedom was a new indicator assessing Land Rights and Access. This new criterion was intended to assess a candidate government’s ability and willingness to “secure property rights and sound economic policy.”23 Lastly, Natural Resource Management was included under the criteria for Investing in People because, according to the MCC, the new indicator would assess the governments ability to invest in its resources, especially in ways which “will enable poor people, particularly poor women and children, to live health and productive lives.”24

Based on the number of changes made from year-to-year by the MCC in its indicators for selection, the MCC was being proactive in reevaluating itself and its methods. In addition, within each selection and eligibility report, the MCC made predictions for which new indicators may be include in subsequent fiscal years. The MCC and the Board of Directors were constantly searching for reliable and consistent third party data, which would create across-the-board comparisons for each candidate country, attempting the make the process as objective and politically neutral as possible. Year after year, the MCC and the administration were taking progressive steps in not only assessing Third World Countries, but also in assessing itself and its selection criteria.

On paper, the merits and goals of the Millennium Challenge Account appear innovative and bound for success; however, much criticism has arisen regarding whether or not the MCA can truly lead to long lasting development, accountability and national security for the United States. While the MCC constantly worked to reevaluate itself and its eligibility criteria, many felt as though the indicators did not represent the developing world. As previously noted, one of the primary aims of the Bush administration in developing the MCA was to ensure that Third World countries remain economically and political viable in order to diminish the attraction of terrorism. Thus, the Millennium Challenge Account must be evaluated in terms of its ability to achieve the goals of producing long-term development, accountability for developing nations, and increased security for the United States.

Global Poverty and Development

In 2000, the United Nations and its member states adopted the UN Millennium Declaration. This declaration included a list of eight Millennium Development Goals (MDGs) that would make significant progress toward the suppression of global poverty by 2015.25 Amongst these MDGs were goals such as achieving universal primary education, combating HIV/AIDS, malaria and other diseases, ensuring environmental sustainability and developing a global partnership for development.26

The eighth goal, developing a global partnership, called upon wealthy nations and non-governmental organizations (NGOs) to play a role in this developmental partnership. Some of the targets of this partnership were to “develop further an open trading and financial system that includes a commitment to good governance, development, and poverty reduction,” address the debt crisis of developing nations, and to address the special needs of the least developed countries.27 Surely, the Bush administration took the United Nations list of MDGs into consideration when establishing the Millennium Challenge Account. Many of the MDGs in fact mirror those goals set forth by Bush under the Millennium Challenge Act in 2003.

There is no question that the Millennium Challenge Account made an impact in the recipient countries. For example, the West African nation of Burkina Faso made major improvements just to qualify for assistance from the MCA in 2007. Burkina Faso effectively was able to halve the number of days it took to start a business, and also dramatically reduced business registration costs by a third.28 As a result, Burkina Faso received $13 million from the MCA to improve girls’ education through the construction of an in-school day care center, eliminating the need for young girls to remain at home with children rather than attend school.29 In Sub-Saharan Africa alone, the MCC signed eleven compacts between 2005 and 2008, totaling nearly $4.5 billion.30

To date, the MCA has provided approximately $5.5 billion in compact funding and is actively working with 41 countries, either through direct compacts or through threshold programs for those countries that do not directly qualify for an MCA compact, but have shown significant improvements in performance.31 The Millennium Challenge Compacts have funded a number of projects for improvements for water sanitation, infrastructure, agricultural productivity and investment climate, just to name a few.32 Nations that have been fortunate enough to receive Millennium Challenge Compacts have benefited from the program and have implemented numerous development projects that ultimately fulfill the goals of the MCA.

As a tool for overall poverty reduction and development in the Third World, the Bush administration and Millennium Challenge Account fall short in several ways. First and most importantly is that according to the approach put forth by the administration and the MCA, poverty is treated as a merit-based problem, rather than a need-based problem.33 The practice of granting assistance to those countries that meet certain requirements, known as policy-level conditionality, became increasingly attractive to policy makers and donors in the 1980 and 1990s as research showed that monetary aid is more effective in countries with good governments, a strong macroeconomic structure, high levels of investment in health and education, and low levels of corruption.34

Policy-level conditionality allowed governments and donors to essentially limit aid contributions and become increasingly selective of which poor nations received assistance.35 The fundamental problem with the policy-level conditionality approach, and ultimately the Millennium Challenge Account, is that it rewards governments that are well on their way toward independence and wealth regardless of foreign assistance, and ignores those direly poor nations that are most in need. Those in need of the most assistance typically live in countries where the government would not meet the governance standards established by the program. The merit-based approach, however, is politically popular and is rooted in common sense. It is more likely that a dollar of aid will go further in a country with a government committed to reinvesting in its people and eliminating corruption than it would in a country with a dishonest government.36 However, it is difficult to reconcile the problem of rewarding those governments that have demonstrated a commitment to ownership and ignoring those people, who through no fault of their own, live in poverty in a corrupt or even failed state.

In addition, there have been multiple studies that indicate that the link between aid and economic growth is not as clear as is commonly believed, and some evidence has suggested that aid can have a neutral or even negative impact on economic growth.37 Research has suggested that within the greater macroeconomic context, economic aid and developmental assistance have a relatively small impact on the amount of growth a country experiences, and that many other variables help to determine growth.38

Additionally, the policies of recipient countries do not give a complete picture of aid effectiveness, as factors such as the structure of the donor agency and the donor’s requirements also shape the effectiveness.39 If this evidence holds true, than the policies set forth by the Bush administration through the MCA had limited influence on actual development in the Third World. This, coupled with the notion that the MCA recipients were arguably already on the path toward development, demonstrates that the MCA was not the revolutionary program it has often been touted to be.

Despite its achievements, the Millennium Challenge Account under President Bush did not serve as major tool in alleviating poverty in the areas that needed it the most. Those nations that suffer from the worst human and political rights abuses are ignored by the requirements established by the MCC. The MCA is not intended to assist states in improving their governance, and to date, no real program exists to assist in this area.40 It is up to the developing nations themselves to invest the enormous amounts of money and political capital necessary to even be considered for a Millennium Challenge Compact, resources that many of these countries do not posses.

One of the stated purposes of the MCA was to encourage developing nations to improve themselves in order to qualify for assistance from the MCA; however, those least developed nations with the most corrupt and poorly functioning governments will never reach that level of eligibility on their own.41 By selecting those countries that already performed above average, the Bush administration was engaging in a practice of choosing winners and those most likely to succeed regardless of assistance.

The countries selected by the MCC already had strong economic, political, and social foundations, and any infusion of developmental assistance would accelerate the time it would take for those nearly developed nations to become active participants in the global and U.S. economies.42 While the Bush administration and the MCC did work toward development, the MCA did not channel its resources in the areas that were most in need and purposely neglected the countries and developmental problems that were most difficult to address.43 The most vulnerable and destitute nations had to rely on traditional, smaller, and less effective forms of assistance, leaving them on the brink of failure.

Accountability

As discussed, a major policy of the Bush administration, in both domestic and foreign policy, was that of accountability. The selection of countries for the MCA was based primarily on a country’s ability to manage itself in a way that would ensure long-term development, and truly emphasized the importance of country ownership. Arthur A. Goldsmith calls the Millennium Challenge Account the “No Child Left Behind” of foreign policy, stressing the similarities between the two Bush proposals in terms of the emphasis on accountability.44

The No Child Left Behind Act of 2001 required schools to meet certain federally established standards, measured in terms of standardized test performance, in order to maintain certain levels of funding. The emphasis was of course to make schools and teachers accountable for the successes, or failures, of the students. If the students and the school did not achieve the standards set by No Child Left Behind, the school was deemed as a failure. Goldsmith emphasizes that Millennium Challenge Act takes a similar approach as that of No Child Left Behind in that it “stresses quantified common standard and holds countries responsible if their performance is below par.”45

The ownership component of the Millennium Challenge Account is one of the aspects that really distinguished the program from all other development programs that came before it. As discussed with the compacts, recipient countries are expected to both set development priorities and design projects.46 Under the MCA, recipient countries are able to decide for themselves which projects were in need of funding, so long as those projects were developed in an open consultative setting and relate directly to economic growth and development.47 While the MCC encourages and requires ownership, it also must involve itself to some degree with the selection of project in order to ensure that they align with the objectives of the program.48 The stated rationale behind the MCA was that developing nations would take a leading role in the development process and, by doing so, would ultimately be accountable to themselves for assuring this success, or failures, of the project.

While country ownership and independence are central to the MCA, there is also an overwhelming sense of recipient countries being accountable to the United States and the MCC. Certainly, the indicators established by the MCC Board of Directors directly correlate to country accountability; however, a major criticism of the MCA is that it limits the ways in which developing nations can operate. The indicators that have been established by the MCC take on a one-size-fits-all mentality and certainly does not take into account “local conditions, historical legacies and other special factors” that may be present in each eligible country, and therefore potentially inhibits development by “limiting the range of choices available to policy makers.”49 Overall, the MCC allowed for limited flexibility on the path toward development.

Beyond being held accountable for meeting eligibility requirements and implementing development projects, the Bush administration and the MCC held recipient nations accountable for remaining consistent with MCC principles. There are several examples in which MCA compacts were terminated or suspended due to a drop in performance. For example, in 2008, Nicaragua’s grant was suspended due to voting irregularities in the country’s municipal elections.50

Honduras signed a $215 million compact with the MCC in 2005 aimed at reducing the burden of low agricultural productivity and high transportation costs, only to have that compact partially terminated due to what the MCC termed “actions by the government of Honduras that are inconsistent with MCC’s eligibility criteria.”51 While the MCC encouraged independent accountability, it did put a major emphasis on remaining accountable to the goals of the program as well.

National Security

In the post-September 11^th climate, national security was clearly at the forefront of the Bush administration’s agenda. It is a commonly held belief that underdevelopment breeds terrorism, sentiments President Bush echoed in his remarks to the in Inter-American Development Bank in March 2002, shortly after introducing his proposal for the Millennium Challenge Account to Congress:

Poverty doesn't cause terrorism. Being poor doesn't make you a murderer. Most of the plotters of September the 11th were raised in comfort. Yet persistent poverty and oppression can lead to hopelessness and despair. And when governments fail to meet the most basic needs of their people, these failed states can become havens for terror.52

The relationship between poverty and terrorism is more complex than many may believe. Bush cited the example of Afghanistan prior to September 11^th, saying that poverty was a key factor for the Taliban’s rise to power.53 Based on the example of Afghanistan, President Bush was using the MCA and the administration’s new policy toward foreign aid to prevent another Afghanistan.

While the link between poverty and terrorism may prove true in the instance of Afghanistan, this link cannot simply be universally applied to every poor and underdeveloped nation. There are several examples of poverty and underdevelopment linked to terrorism, but there are those who question this link. Many believe that terrorism is rooted in history and transcends economic conditions.54 To assume that all poor nations and its citizens are subject to terrorism is incorrect and overly simplified. Empirical data supports the notion that many revolutionary and terrorist organizations have members who are highly educated and come from wealthier backgrounds, suggesting that terrorism is not merely a response to economic conditions, but is rooted in other aspects of society including political imbalance and frustrations.55

Additionally, Africa, where many of the MCA compacts are held, has the fewest number of terrorist organizations, none of which were designated by the State Department as threatening Foreign Terrorist Organizations in 2003.56 To reconcile the fact that poverty does not necessarily equate to terrorism, the Bush administration and the MCC raised the income level for eligibility to include those wealthier developing nations that may be at risk for terrorist activity. In its first year, the income eligibility requirement was a per-capita income equal to or less than $1415; in the program’s third year, the maximum per-capita income level was raised to $3255, allowing for the consideration of many more countries.57

The evidence suggests that the Bush Administration had misguided aims in developing the MCA as an anti-terrorism tool. Using development to combat terrorism relies on faulty assumptions that do not hold true for all developing nations. As part of the greater context of battling a war on terrorism, the MCA misses the mark. First of all, many of the countries that are most in danger of becoming havens for terrorists are those that would not come close to qualifying for aid from the MCA. President Bush claimed that the MCA would provide hope to failed states to combat terrorism, but many of these states would fail to meet the economic and governance performance standards necessary to qualify for developmental assistance.58

The emphasis that the MCA puts on good performance ignores those failed and weak states that President Bush claimed would present the most significant national security threat.59 If the MCA had been in place prior to September 11^th, Afghanistan would certainly not have met the eligibility requirements for developmental assistance. Other failed states such as Sudan and Somalia, both of which have been famous for harboring terrorist groups, would not have qualified either. Therefore, if Bush’s intention in creating the MCA was to prevent another Afghanistan, he largely failed in that regard. Potential terrorist harboring nations would require more than simple development projects such as sanitation or drinking water improvements. It may be said that the MCA may be the added boost to a country that may have eventually fallen into insurrection and terrorism, but the link is so weak that it can hardly be attributed to the policies of the Bush administration and the MCA.

Conclusion

President Bush’s Millennium Challenge Account was viewed as an innovative approach to address the problems of persistent poverty and underdevelopment in the Third World. This new approach strayed from the mistakes of the past and put a large emphasis on results and accountability. The Bush administration and the MCC were truly working toward independence and wealth of the MCA recipients, and were structured to hold those recipient nations accountable for their own success or failure. Assessing whether or not President Bush’s Millennium Challenge Account program was a success in the Third World requires a multifaceted approach that examines to what extent the stated goals and visions of the program were accomplished.

One of the major drawbacks of the MCA in terms of development was that Congress ultimately decided the amount of money to be allocated to the MCA each year for development projects. At the outset of the program, President Bush set forth a lofty financial goal of increasing aid by $5 billion each year; however, as the economy soured throughout the Bush presidency, funding levels dwindled and did not meet the levels Bush had anticipated, and Bush was ultimately forced to suffer the consequences of his other policy decisions.

As a result, the MCA may not have been as effective in the Third World as it could have been. Because of the funding shortfalls, the MCA faced a major challenge in providing compacts to countries that had worked toward dramatic change in order to qualify for MCA funding.60 In 2007, Congress appropriated only about half of the amount for foreign aid requested by President Bush.61 Had President Bush’s $5 billion per year goal had been achieved, the MCA may have had the potential to serve more countries, enter into more compacts, and maybe even expand to the point that it could offer some assistance to those countries that did not meet threshold or compact requirements.

The accountability aspect of the program can also be viewed as both a blessing and a curse for MCA recipients. On the one hand, holding a nation accountable for its own development instilled the idea of independence. The MCA would provide the funds and limited oversight, but it was ultimately the responsibility of the recipient nation to ensure that the compact projects were achieving the goals set forth by the MCC and the country. It also required recipient nations to collaborate with other civil organizations in the planning and implementation of compact projects. As was the case in Burkina Faso, the requirements set forth by the MCC also led many nations to strive and aspire to become eligible for MCA assistance.

On the other hand, recipient nations were held to an extremely high standard. Violations of terms would result in the suspension or termination of compacts. Compact countries were expected to remain within the well-defined bounds of the MCC, especially since the MCC had millions of American taxpayer dollars invested in the development projects of compact countries. The performance and results of compact countries would be tied to the performance of the MCA, translating into more or less funding appropriated by Congress for development projects through the MCA.

Lastly, the Bush administration truly miscalculated the MCA as an anti-terror tool. From its very inception, the MCA did not resemble a program designed at combating terrorism, despite what President Bush may have believed. The indicators and requirements set forth by the MCC certainly did not apply to those countries that posed a most obvious and immediate threat, so it is debatable to what extent the MCA provided for national security in any sense. In creating the MCA as an anti-terror tool, the Bush administration was operating under false pretences that poverty and terrorism are always linked, an assumption that has proved to be widely untrue.

However, it is not the case that the two – poverty and terrorism – have never and can never be linked. The link between terrorism and poverty is extremely complex, and therefore, cannot serve as a central policy aim. In addition, linking poverty to terrorism could result in a shift of resources away from actual poverty alleviation and toward anti-terror efforts.62 When the focus is put on ensuring security, it is the citizens of poor and developing nations who will ultimately pay the price.

Ultimately, the Bush administration had honorable intentions in establishing and implementing the Millennium Challenge Account. The program did impart some level development on recipient nations, and certainly boost the perception of the United States in the Third World. It gave Third World nations something to strive toward and ushered in a new strategy toward development. In a post-9/11 atmosphere, the Bush administration cannot be faulted for its attempts to ensure its national security, however misguided those attempts may have been.

As the world becomes increasingly globalized and interconnected, it will be up to the United States to continually reevaluate its role as a major donor to international development. The Millennium Challenge Account is still in existence today, and its legacy will be determined by its ability to continually provide for development within the Third World. President Bush’s legacy in terms of the MCA still hangs in the balance. President Bush laid the groundwork for the United States to lead many developing nations toward independence and wealth through assistance from the Millennium Challenge Account. If the Millennium Challenge Account can improve upon itself and continue to offer assistance to the developing world, then it is arguable that President Bush will be regarded as one of the most influential presidents in the foreign aid arena.

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References

Brainard, Lael, Carol Graham, Nigel Purvis, Steven Radelet, and Gayle E. Smith. The Other

War: Global Poverty and the Millennium Challenge Account. Washington, DC: Brookings Institution, 2003.

Brinkerhoff, Jennifer M., Stephen C. Smith and Hildy Teegen, NGOs and the Millennium

Development Goals. New York: Palgrave Macmillan, 2007.

Bush, George W. “Message to the Congress of the United States, February 5, 2003.” White House Archives. http://georgewbush-whitehouse.archives.gov/news/releases/

2003/02/20030205-4.html.

Bush, George W. “Remarks at the Inter-American Development Bank, March 14, 2002,” The

American Presidency Project. University of California Santa Barbara http://www.presidency.ucsb.edu/ws/?pid=64974.

Dugger, Celia W. “U.S. Agency’s Slow Pace Endangers Foreign Aid.” New York Times, December 7, 2007. http://www.nytimes.com/2007/12/07/world/africa/07millennium.html?_r=1&sq=millennium%20challenge%20account&st=cse&scp=2&pagewanted=all.

Englehart, Neil A., “U.S. Aid Should Not Target Nations That Practice Good Governance.” In The Third World, edited by David M. Haugen, 170-178. Detroit: Greenhaven Press, 2006.

Goldsmith, Arthur A. “No Country Left Behind? Performance Standard and Accountability in US Foreign Assistance,” Development Policy Review, 28, no. 1 (2010): 7-26. Academic Search Premier, EBSCOhost.

Millennium Challenge Corporation. “Honduras.” Millennium Challenge Corporation. Office of the Inspector General. http://www.mcc.gov/mcc/countries/honduras/index.shtml.

Millennium Challenge Corporation. “Millennium Challenge Act of 2003, Pub. L. 108-199, Div. D.” Millennium Challenge Corporation. Office of the Inspector General. http://www.mcc.gov/mcc/bm.doc/mca_legislation.pdf.

ONE Campaign. “Issue Brief: The Millennium Challenge Account.” One.org. http://www.one.org/c/us/issuebrief/743/.

Owusu, Francis Y. "Post-9/11 U.S. Foreign Aid, the Millennium Challenge Account, and Africa:

How Many Birds Can One Stone Kill?." Africa Today 54, no. 1 (Fall 2007): 2-26. Academic Search Premier, EBSCOhost.

Radalet, Steven and Ruth Levine, “Can We Build a Better Mousetrap? Three New Institutions Designed to Improve Aid Effectiveness.” In Reinventing Foreign Aid, edited by William Easterly, 431-457. Cambridge: The MIT Press, 2008.

Report on the Criteria and Methodology for Determining the Eligibility of Candidate Countries for Millennium Challenge Account Assistance in FY 2004, http://www.mcc.gov/mcc/bm.doc/fy04_criteria_methodology.pdf.

Report on the Criteria and Methodology for Determining the Eligibility of Candidate Countries

for Millennium Challenge Account Assistance in FY 2005,

http://www.mcc.gov/mcc/bm.doc/fy05_criteria_methodology.pdf.

Report on the Criteria and Methodology for Determining the Eligibility of Candidate Countries for Millennium Challenge Account Assistance in FY 2006, http://www.mcc.gov/mcc/bm.doc/fy06_criteria_methodology.pdf.

Report on the Criteria and Methodology for Determining the Eligibility of Candidate Countries

for Millennium Challenge Account Assistance in FY 2008, http://www.mcc.gov/mcc/bm.doc/mcc-report-fy08-criteria-and-methodology.pdf.

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Endnotes

1.) Lael Brainard and others, The Other War: Global Poverty and the Millennium Challenge Account (Washington, DC: Brookings Institution, 2003), 2.

2.) George W. Bush, “Message to the Congress of the United States, February 5, 2003,” White House Archives, http://georgewbush-whitehouse.archives.gov/news/releases/2003/02/20030205-4.html.

3.) Ibid.

4.) Ibid.

5.) Arthur A. Goldsmith, “No Country Left Behind? Performance Standard and Accountability in US Foreign Assistance,” Development Policy Review, 28, no. 1 (2010): 9, http://0-search.ebscohost.com.ilsprod.lib.neu.edu/login.aspx?direct=true&db=aph&AN=45671109&site=ehost-live.

6.) Millennium Challenge Corporation, “Millennium Challenge Act of 2003, Pub. L. 108-199, Div. D,” Millennium Challenge Corporation, Office of the Inspector General, http://www.mcc.gov/mcc/bm.doc/mca_legislation.pdf.

7.) Ibid.

8.) Ibid.

9.) Millennium Challenge Corporation, “Millennium Challenge Act of 2003, Pub. L. 108-199, Div. D,” Millennium Challenge Corporation, Office of the Inspector General, http://www.mcc.gov/mcc/bm.doc/mca_legislation.pdf.

10.) Ibid., 8.

11.) Ibid., 9.

12.) Report on the Criteria and Methodology for Determining the Eligibility of Candidate Countries for Millennium Challenge Account Assistance in FY 2004, http://www.mcc.gov/mcc/bm.doc/fy04_criteria_methodology.pdf, 1.

13.) Ibid., 1-2.

14.) Ibid., 2.

15.) Ibid., 2.

16.) Ibid., 2.

17.) Ibid., 2.

18.) Ibid., 2.

19.) Report on the Criteria and Methodology for Determining the Eligibility of Candidate Countries for Millennium Challenge Account Assistance in FY 2005, http://www.mcc.gov/mcc/bm.doc/fy05_criteria_methodology.pdf, 3.

20.) Ibid., 3.

21.) Report on the Criteria and Methodology for Determining the Eligibility of Candidate Countries for Millennium Challenge Account Assistance in FY 2006, http://www.mcc.gov/mcc/bm.doc/fy06_criteria_methodology.pdf, 2.

22.) Report on the Criteria and Methodology for Determining the Eligibility of Candidate Countries for Millennium Challenge Account Assistance in FY 2008, http://www.mcc.gov/mcc/bm.doc/mcc-report-fy08-criteria-and-methodology.pdf, 4.

23.) Ibid., 4.

24.) Ibid., 4.

25.) Jennifer M. Brinkerhoff, Stephen C. Smith and Hildy Teegen, NGOs and the Millennium Development Goals (New York: Palgrave Macmillan, 2007), 1.

26.) Ibid., 4.

27.) Ibid., 4.

28.) Celia W. Dugger, “U.S. Agency’s Slow Pace Endangers Foreign Aid,” New York Times, December 7, 2007, http://www.nytimes.com/2007/12/07/world/africa/07millennium.html?_r=1&sq=millennium%20challenge%20account&st=cse&scp=2&pagewanted=all.

29.) Ibid.

30.) ONE Campaign, “Issue Brief: The Millennium Challenge Account,” One.org, http://www.one.org/c/us/issuebrief/743/.

31.) Ibid.

32.) Ibid.

33.) Francis Y. Owusu, “Post-9/11 U.S. Foreign Aid, the Millennium Challenge Account, and Africa: How Many Birds Can One Stone Kill?” Africa Today 54, no. 1 (2007): 11, http://0-web.ebscohost.com.ilsprod.lib.neu.edu/ehost/pdfviewer/pdfviewer?vid=5&hid=6&sid=c8f0b1b2-aec3-4c7f-9c00-35aebf8a2d88%40sessionmgr14.

34.) Ibid., 11.

35.) Ibid., 11.

36.) Brainard and others, The Other War, 30.

37.) Ibid., 30.

38.) Ibid., 30.

39.) Ibid., 31.

40.) Neil A. Englehart, “U.S. Aid Should Not Target Nations That Practice Good Governance,” in The Third World, ed. David M. Haugen (Detroit: Greenhaven Press, 2006), 177.

41.) Ibid., 177.

42.) Ibid., 177-178.

43.) Ibid., 178.

44.) Goldsmith, “No Country Left Behind?,”7.

45.) Ibid., 8.

46.) Steven Radalet and Ruth Levine, “Can We Build a Better Mousetrap? Three New Institutions Designed to Improve Aid Effectiveness,” in Reinventing Foreign Aid, ed. William Easterly (Cambridge: The MIT Press, 2008), 440.

47.) Ibid., 440.

48.) Ibid., 440-441.

49.) Goldsmith, “No Country Left Behind?,” 22.

50.) Ibid., 12.

51.) Millennium Challenge Corporation, “Honduras,” Millennium Challenge Corporation, Office of the Inspector General, http://www.mcc.gov/mcc/countries/honduras/index.shtml.

52.) George W. Bush, “Remarks at the Inter-American Development Bank, March 14, 2002, http://www.presidency.ucsb.edu/ws/?pid=64974.

53.) Owusu, “Post-9/11 U.S. Foreign Aid, the Millennium Challenge Account, and Africa,” 8.

54.) Ibid., 9.

55.) Ibid., 9.

56.) Ibid., 9-10.

57.) Ibid., 7.

58.) Brainard and others, The Other War, 204.

59.) Ibid., 166.

60.) Dugger, “U.S. Agency’s Slow Pace Endangers Foreign Aid.”

61.) Ibid.

62.) Owusu, “Post-9/11 U.S. Foreign Aid, the Millennium Challenge Account, and Africa,” 21.