The other war: global poverty and the millennium challenge account

Abstract

Lael Brainard, Carol Graham, Nigel Purvis, Steven Radlet, and Gayle E. SmithWashington, DC: Brookings Institution Press, 2003, x, 265pp, US$46.95 cloth (ISBN 0-8157-1114-X), US$18.95 paper (ISBN 0-8157-1115-8)At the March 2002 UN Conference on Finance for Development held in Monterrey, Mexico, US president George W. Bush announced the creation of the Millennium Challenge Account (MCA). The MCA envisages an increase of US$5 billion per year (revamped over three years) in US bilateral development assistance. This book sets out to examine the promise and pitfalls of the MCA, and to make recommendations on how to make it an effective tool in the war: the global war against poverty.If fully implemented, the MCA would represent the largest single-year increase in US bilateral assistance specifically targeted toward development in decades, reversing years of steady decline. This promise, however, is clouded by several potential pitfalls. One lies in the tension between pure developmental objectives (such as poverty reduction) and national security interests. America's national security concerns in its global war against terrorism provided an important rationale for the creation of the MCA. As the authors note, although the MCA is supposed to go to the poorest countries in support of development objectives, there is a real possibility that funds will be diverted to countries considered more strategically important.The authors discuss some important operational issues that shape the ability of the MCA to achieve its goals. These include problems of internal coordination among agencies within the US government and external coordination between the US government and other bilateral and multilateral donors. The track record of internal coordination has been checkered by multiple and conflicting goals, overlapping directives and jurisdictions, and inconsistent implementation of aid programs. In the effort to streamline aid delivery services, the US government announced the establishment of an independent new agency, the Millennium Challenge Corporation, to oversee the account. As the authors note, it remains unclear how this new agency would complement other US government agencies and departments that traditionally had the prime responsibility for development, such as the US Agency for International Development (USAID). In terms of external coordination with other donors, the MCA is supposed to support the UN's Millennium Development Goals (MDGs). These MDGs include specific quantitative targets to halve the world's population living in poverty and achieve specific health, education and environmental improvements by the year 2015. …