Abstract for 2008 Honors Colloquium

Robert Landicho

Government

"Can Foreign Aid Give an Incentive for Good Governance? The Case of Jordan"

This project examines the new U.S. aid agency, the Millennium Challenge Corporation (MCC), and its ability to promote democracy. The MCC only awards aid to countries that first meet a certain threshold of good governance; this allows the possibility of the MCC incentivizing good governance in countries before aid is sent. The purpose of this thesis is to ascertain if such an MCC incentive effect exists, and whether certain factors can either enhance or undermine the effect. The researcher focuses on the case of Jordan and the MCC, and finds that earlier funds (such as the MCC threshold program) serve as a good litmus test of a country's adherence to donor preferences, and that oversight by the donor country is a critical determinant of an effective incentive effect.