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MCC Impact Evaluations: Finding Out What Works and Why
The Millennium Challenge Corporation (MCC) carries out one of the newer U.S. development assistance initiatives, the Millennium Challenge Account. Established with strong bipartisan support in 2004, the MCC works only with developing countries committed to good governance, the rule of law, reducing poverty and hunger, and controlling corruption. The idea is to enable countries to determine development priorities that will promote inclusive growth and then to achieve them with the help of U.S. development assistance compacts -- all with the active participation of affected communities.
Today, MCC is releasing its first set of independent impact evaluations, which are designed to use rigorous statistical methods to measure changes in beneficiary incomes. These first five impact evaluations, for farmer training activities in Armenia, El Salvador, Ghana, Honduras, and Nicaragua, reflect just a small portion of MCC’s investment and evaluation portfolios, less than 13 percent of the total budget of these compacts and only 2 percent of MCC’s global compact portfolio. However, they offer valuable lessons and a first look at how MCC uses evaluations to maintain accountability and improve its work.
Here are a few of the evaluation reports' main points:
- The five countries were very successful in carrying out all their planned compact activities, which were specified in targets for project output and outcomes. The average completion rates are: Ghana, 103 percent; Armenia, 103 percent; Nicaragua, 112 percent; El Salvador, 131 percent; and Honduras, 158 percent.
- Impact evaluations, however, are designed to go a step further — to test how outcome achievements translate into farm income and ultimately household income. In other words, did the training make a difference in the resources available to farm families?
- Three evaluations noted increases in farm income: El Salvador dairy (doubled farm income), Ghana northern region (increased crop income), and Nicaragua (increased farm income by 15-30 percent).
- Increases in household income were not yet detected. This raises interesting questions about how to achieve (and then measure) improvements in household income.
- MCC is using the impact evaluation findings to test traditional assumptions about what works and adapt its programs to be more effective.
Making significant improvements in U.S. foreign assistance really requires a clear understanding of the impact of current development programs. But reality is complicated -- many factors influence a seemingly straightforward figure such as "percentage increase in farm income," and it's often difficult to attribute improvements to a specific program.
The MCC impact evaluation reports offer a closer look at what makes development assistance work than is typically available. We will have more to say as we consider the details of the reports and the implications of their findings.
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