What implications can we draw in regards to the Millennium Challenge Account (MCA)?
The MCA allocation rule is designed to ensure that MCA funds will be allocated to low-income countries with relatively sound policies and institutions. A group of 70 countries that are eligible for concessional IDA lending from the World Bank, and which have per capita incomes less than $1435 in 2005, will potentially be eligible for MCA funds in 2005. According to the MCA eligibility rules, this set of countries will be rated according to 16 performance criteria covering three dimensions of performance: “governing justly” (6 criteria), “investing in people” (4 criteria), and “promoting economic freedom” (6 criteria). Four of the Governance Indicators we have constructed (voice and accountability, government effectiveness, rule of law, and corruption) have been proposed as performance indicators under the MCA’s “governing justly” performance dimension, with the remaining two for this dimension being measures of civil liberties and political rights constructed by Freedom House. In addit
