The Effectiveness of Millennium Challenge Corporation Grants in Accelerating Economic Growth

Abstract

The Millennium Challenge Corporation (MCC) is a United States’ agency, with a novel structure that provides international development assistance. It operates with the stated objective of assisting the grant-recipient countries in their attempts to accelerate economic growth through poverty reduction, particularly by identifying and removing the binding constraints to growth. There is much debate over how the MCC programme is effective in realising its growth-supporting objective. A few studies have been conducted to examine this aspect. The present study, another attempt to shed light on the comparative growth performance in the MCC grant recipient economies, did not enable the inference that the MCC grant has successfully accelerated the growth impetus in recipient nations. This suggestive inference, however, has to be reconfirmed through future research, that could possibly include any other variables which might be considered as influential, and also capture the long-term growth effects which may not have been reflected through macroeconomic data thus far.