Date of Graduation

5-2012

Document Type

Thesis

Degree Name

Master of Science in Agricultural Economics (MS)

Degree Level

Graduate

Department

Agricultural Economics and Agribusiness

Advisor/Mentor

Nalley, Lawton L.

Committee Member

Popp, Jennie S.

Second Committee Member

Miller, Wayne

Keywords

Social sciences; Development; Funding; Indicators

Abstract

The Millennium Challenge Corporation (MCC) is a U.S. government agency whose purpose is to promote economic growth and reduce poverty in low and low middle-income countries. It uses indicators to endorse countries eligibilities for international development funding. These indicators are related to economic growth and are developed by independent third parties (e.g., United Nations, World Bank), to evaluate a country's policy performance in three specific areas: (1) Ruling Justly, (2) Investing in People, and (3) Encouraging Economic Freedom (MCC, 2011). The MCC weighs indicators equally regardless of their myopic in-country relevancy to economic development. The goal of this study is to first replicate the MCC funding mechanism then examine the effect of weighting each of the MCC's indicators differently and analyzing the subsequent effects on a countries' funding eligibilities. This study found that many countries were marginally below the median because of one outlier which skewed the mean score. The results signify both the transparency of the calculations and the MCC's funding decisions. Given that by definition low-income countries need economic assistance, and such assistance is often times distributed through indicators like those used by the MCC; this thesis suggests making the index holistic to capture the relative strengths and weaknesses of each country.

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