'Challenge' for nations seeking aid

Observers also say the criteria may not be strict enough on governance and human rights. Although some successful countries like Malawi and Albania do pass the required indicators in areas like corruption and political rights, Radelet and others say that their records are hardly stellar, but that the data just aren't good enough. Some politically oppressive countries like China, which would qualify in the second year when the group of eligible countries is expanded, fail on all three of the human rights indicators - political rights, civil liberties, and something called voice and accountability - but still pass because those are grouped in the same category as indicators on government effectiveness, rule of law and corruption, which they do well on.

"I think people are going to look at this and say, 'This doesn't square with our inclinations and will have to take a look again at the methodology,' " says Lael Brainard, a senior fellow at the Brookings Institution who is studying the MCA. "This is where scientific theory meets reality."

The government's plan does, however, take into account some of the anomalies in the numbers. A board of directors, composed of cabinet-level officials, will make recommendations directly to the president. The board will be "empowered to take account of data gaps, lags, trends, or other material information, including leadership, related to economic growth and poverty reduction," according to the MCA proposal.

Andrew Natsios, head of the US Agency for International Development, said the US would still help in situations where people are dying from famine or disease. But "in terms of economic investment in sectors that lead to growth, we have to have evidence of national political leadership that is willing to make reforms already and has made them on their own," Natsios said, according to Reuters. In countries where there is no political commitment to democratic reforms, the US should work with nongovernmental groups, he said.

Most academics agree that the MCA is headed in the right direction. Giving countries a clear set of guidelines by which they will be judged gives them a sense of what areas they need to improve and a sense that aid is being distributed fairly.

Oliver Morrissey, an expert on international aid at the University of Nottingham in Britain, says that it will encourage a Republican Congress, skeptical of foreign aid, to continue to send money overseas.

"I think the motivation is to get a political constituency for aid," says Mr. Morrissey. "Congress doesn't believe in aid and Republicans don't believe in giving aid as such. So the only way the government can convince them to give aid is to say that we're going to give it to countries that are doing well."

Out of 74 countries with per capita incomes under $1,435, only 11 nations would qualify for US aid under the new Bush Millennium Challenge criteria. Each country is judged on 16 criteria that measure whether its government is "ruling justly," "investing in people," and providing "economic freedom." If a country fails the corruption test, but passes the other 15 categories, it will not get US aid.

Qualifies for aid

Albania

Bangladesh

Bolivia

Gambia

Georgia

Honduras

Malawi

Mongolia

Nepal

Senegal

Sri Lanka

Eliminated by corruption

Moldova

Nicaragua

Missed by one indicator

Cambodia

Ivory Coast

India

Mali

Mozambique

Source: Center for Global Development (www.cedev.org)

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