Fully funding the MCC – less than a mere 0.3 percent of the amount being contemplated to bail out the country's financial systems – would demonstrate the pivotal role of the US in addressing a critical systemic weakness in the global economy: the fact that 1.4 billion people live in poverty. As we stand on the precipice of a global financial crisis, the US must reassert leadership in addressing poverty reduction and economic growth in the developing world.
More predictable aid is more effective aid, for the recipient country and for the US taxpayer. Because of this, and the fact that economic growth takes time, the MCC's financing instrument is a multiyear agreement with an eligible country to fund specific projects.
This is not charity; it is wise long-term investment in a safer, healthier, and more prosperous world. And the metric for measuring its success must be in demidecades, not in months or even in years.
The Senate appropriators say they're imposing a temporary pause in the signing of new agreements because they haven't seen tangible results. This logic fails to recognize the difference in time horizons between long-term investments and short-term charity. Perhaps more important, this decision also completely overlooks the "MCC incentive effect" – policy reforms by countries that are either working to meet the criteria to become eligible for MCC assistance or have already been selected and are continuing the reform process.
Anecdotes and early studies on the MCC's effect indicate that transparent and predictable aid, such as the aid provided by MCC, influences reform long before a single dollar of taxpayer money is spent.