CONTENTS

Economic Perspectives

An Electronic Journal of the U.S. Department of State, Vol. 8, No. 2, March 2003

Focus Commentary Facts and Figures Information Resources

Millennium Challenge Account:
A New Compact for Global Development

FOCUS

PRINCIPLES OF GOOD GOVERNANCE
By Paula Dobriansky, Under Secretary of State for Global Affairs
The Bush administration will employ five key principles of good governance - free and fair elections, independent judiciary and the rule of law, freedom of speech and press, absence of corruption, and government investment in basic social services - to determine countries' eligibility for Millennium Challenge Account assistance. These principles constitute the foundations of modern democracy and create the underpinning to establish capital markets and spur foreign and domestic investment.

THE MCA PROMOTES SOUND ECONOMIC POLICIES
E. Anthony Wayne, Assistant Secretary of State for Economic and Business Affairs
Development cannot occur without economic growth. The MCA seeks to stimulate growth by rewarding nations implementing policies that mobilize domestic assets, encourage entrepreneurship, boost trade and attract foreign investment.

HEALTH AND EDUCATION KEY TO NEW FOREIGN AID PLAN
By Andrew Natsios, Administrator, U.S. Agency for International Development
The Millennium Challenge Account can help countries committed to good primary education and public health go beyond basic goals and build upon their success in these areas to drive up productivity and economic growth.

COMMENTARY

ANTI-CORRUPTION: UNSHACKLING ECONOMIC DEVELOPMENT
By Nancy Zucker Boswell, Managing Director, Transparency International USA, and Peter Richardson, adviser to TI's international secretariat
The MCA eligibility requirement that a country seeking funds show a commitment to limit corruption and promote good governance can be a major step toward changing the incentive system for development assistance.

PROMOTING GROWTH AND PROSPERITY IN THE DEVELOPING WORLD THROUGH ECONOMIC FREEDOM
By Brett D. Schaefer, Jay Kingham Fellow in International Regulatory Affairs,
The Heritage Foundation
The Millennium Challenge Account seeks to achieve a fundamental revolution in development assistance not only by linking aid to policies that have proven complementary and conducive to economic growth, but also by recognizing that reforms must be crafted and enforced by the aid recipients and not the donor countries.

THE SOCIAL ASPECTS OF THE MILLENNIUM CHALLENGE ACCOUNT: RISKS AND PROSPECTS
By Stephen Heyneman, Professor of International Education Policy,
Vanderbilt University
The Millennium Challenge Account offers the prospect of stability and poverty reduction to many of the world's poorest nations. Fundamental reform in conditions placed on countries seeking foreign aid is an essential ingredient to its success.

FACTS AND FIGURES

IMPLEMENTING THE MILLENNIUM CHALLENGE ACCOUNT:
U.S. Government Background Paper

THE MILLENNIUM CHALLENGE ACCOUNT: White House Fact Sheet

MILLENNIUM CHALLENGE ACCOUNT UPDATE: USAID Fact Sheet

INFORMATION RESOURCES

KEY CONTACTS AND INTERNET SITES

BACKGROUND MATERIALS

Editor’s note: The legislative proposal President Bush submitted February 11 to Congress for the Millennium Challenge Act of 2003 now faces a lengthy process of congressional hearings and drafting of legislation before it can become law. The President’s proposal will be considered by separate House and Senate committees with jurisdiction over different elements of the proposed Act. The committees will draft legislation, differences in separate House and Senate bills will be resolved between the two bodies, and a unified bill will be acted on by the full Congress and forwarded to the President for signature if he finds it acceptable. The first stage of congressional consideration began with House and Senate hearings in early March.

An Electronic Journal of the U.S. Department of State

Volume 8, Number 2, March 2003

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