The Millennium Challenge Corporation (MCC) is a bilateral United States foreign aid agency established by the U.S. Congress in 2004.

[4] Other development programs like USAID have been thought to suffer from many different and sometimes conflicting goals, which often are a result of political pressures, and for not delivering long-term economic improvements.

Its guiding principles are: The first CEO of the Millennium Challenge Corporation was Paul V. Applegarth, a finance manager with experience in emerging markets.

[citation needed] The indicators are:[20] Centre for Law and Democracy Access Now An eligible country must apply for a grant with a specific project in mind.

If the country scores poorly but has a positive, upward trend on the selection criteria, it can still be eligible for a smaller grant, called a threshold program.

MCC requires that each partner government creates a special purpose legal entity that will be accountable for implementing the compact program.

In the first year (2004), 17 countries were made eligible for an MCC grant: Armenia, Benin, Bolivia, Cape Verde, El Salvador, Georgia, Ghana, Honduras, Lesotho, Madagascar, Mali, Mongolia, Morocco, Mozambique, Nicaragua, Senegal, Sri Lanka, and Vanuatu.

But having successfully completed a democratic election and various economic reforms, the MCC made Yemen eligible again for a threshold agreement.

[57] Again for fiscal year 2008, less funding will be provided than was hoped for, and only $1.2 billion was budgeted; the CEO of the MCC commented that it would undercut the program's efforts.

[58] In discussions of the FY 2009 budget, the United States Senate proposed that only half of the money needed for a compact be provided up front, as opposed to full funding for each one provident in advance, which officials at the corporation insist would be a "large step backward" causing too little aid to make an impact on recipient countries.

[59] Senator Richard Lugar, the author of the amendment, responded that more "realistic" funding levels allowed for more compacts, thus spreading the "MCC effect".

[62] Studies by conservative groups such as The Heritage Foundation in the United States have shown that many developing countries that have received foreign aid have seen their per capita income fall or stagnate over the last 40 years.

The Heritage Foundation has consistently supported the MCC's approach, which has used their trade measure from the Index of Economic Freedom.

[66] The World Policy Council, headed by Ambassador Horace Dawson and Senator Edward Brooke, recognizes the MCC as the most recent and most promising program in its area, and recommended that the Bush administration and the Congressional Black Caucus focus on full funding and an accelerated pace of spending.

[68] Also, Freedom House released subcategories for the first time since it was being used as part of the MCC's measurements to allow for more granular distinctions.

[80][79] Some find that these relationships are independent of growth, with lower poverty rates in countries that have passed the MCC scorecard than those that fail it, even holding GDP constant.

[79] Some critics have charged that the program uses indicators by conservative groups, such as The Heritage Foundation, and is therefore biased toward free market economics and reimposing American imperialism on the Global South.

A committee of experts had determined that it contained clauses incompatible with the Constitution of Sri Lanka and was "detrimental" to the country's sovereignty.

[90][91][92] A similar disinformation effort attributed to the Chinese government was attempted against MCC's program in Nepal, but was ultimately unsuccessful and the compact moved forward.