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A Changing Model for Foreign Aid
A recent Fortune Magazine article, “Foreign aid, capitalist style”, highlights the success of the Millennium Challenge Corporation (MCC) development model, whose founding principle is that economic growth is the best antidote to poverty.
In MCC’s development model, countries compete for development assistance funds after they pledge to end corruption and embrace democracy. This is in contrast to other foreign-aid programs. When development funds are used as leverage for good governance and economic freedom, an environment is created in the country receiving assistance that will attract the private sector and thus make the development sustainable.
Private sector involvement is one of the five policy solutions that GHI embraces with the objective to meet the agricultural needs of a growing population. A GHI policy paper indicates that the overall developing country investment gap in the agricultural sector approaches $90 billion annually. MCC is helping to close this gap by creating an environment that is attractive for businesses, where markets flourish and attract the needed capital for development.
To read the article online (“Foreign aid, capitalist style”), click here.
Image Credit: Millennium Challenge Corporation