Innovating U.S. Development Aid

“Helping the world’s poor is morally the right thing to do,” the Chief Executive Officer of the Millennium Challenge Corporation Daniel Yohannes said recently about U.S. development aid. “Some 1.4 billion people still live in extreme poverty — on less than $1.25 per day — trying to exist without adequate food, shelter, clean water, health care, and education. Poverty robs people of their dignity, and we have the compassion to help them make their lives better.”

Innovating U.S. Development Aid

The Millennium Challenge Corporation, a U.S. Government development agency created in 2004, is at the cutting edge of development innovation on how to deliver U.S. assistance to reduce global poverty and promote economic growth.

“Let me tell you how [we] push the frontier of development to make the business of aid more business-like,” Mr. Yohannes said. “The Millennium Challenge Corporation is designed to set a new standard for development effectiveness by testing innovative practices . . . We demand good governance. We insist that our partners work hard to design and implement their own programs. This is how they can become more self-reliant. And, we expect accountability and transparency.”

The Millennium Challenge Corporation’s model of development - evidence-based decision-making, country selection process, and technical expertise, has served as a foundation for the Partnership for Growth, a U.S. Government-wide global development policy. This partnership between the United States and a select group of high-performing developing countries works to accelerate and sustain broad-based economic growth.

The Millennium Challenge Corporation abides by country-led local priorities in its investments, most in response to food security. For example: 21 of the 25 signed compacts include food security-related investments; $4.4 billion, more than half of its investments, are related to improving food security; 20 percent of food security investments fund irrigation projects; and 60 percent of investments support rural infrastructure like roads, ports and storage facilities to help farmers get their produce from farms to markets.

Being a good neighbor to someone in need is the embodiment of American values. “What we do at Millennium Challenge Corporation demonstrates American values to the world,” Mr. Yohannes said. “All these investments share the same goal: to lift people out of poverty through economic growth.”