Before the Millennium Challenge Account (MCA) has approved its first project, some in the House of Representatives hope to divert money away from it to fund other programs, including traditional foreign aid, by amending 2005 Foreign Operations Appropriations Bill. Taking even more money from MCA, which Congress is already set to fund below the President's request, would be a mistake.
When President Bush proposed the MCA-a performance-based foreign aid program-he did so out of recognition that traditional foreign assistance had failed to help poor nations to develop. The United States disbursed nearly $259 billion (constant 1995 dollars) in development assistance between 1980 and 2001. Yet the citizens of most recipient countries are no better off today, in terms of per capita gross domestic product (GDP), than they were decades ago; some, in fact, are poorer. Of the 77 countries that received economic assistance between 1980 and 2001 that accounted for at least 1 percent of their 2001 GDP (constant 1995 dollars) and for which per capita GDP data are available:
This failure to elicit economic growth has been a tragedy for the poor citizens of recipient nations.
The MCA is an innovative attempt to address this failure and make foreign aid more effective. Under the MCA, nations would be eligible to receive assistance only if they adopt policies consistent with good governance and economic freedom-policies proven to lead to greater prosperity.
Efforts to cut funding for the MCA should be rejected for several reasons:
It would be a mistake for Congress to divert money away from the Millennium Challenge Account to fund traditional foreign aid programs that have failed to spur development in recipient countries.
Brett D. Schaefer is Research Fellow in International Regulatory Affairs at The Heritage Foundation.
 U.S. Agency for International Development, U.S. Overseas Loans and Grants and Assistance from International Organizations: Obligations and Loan Authorizations, July 1, 1945-September 30, 2001, CONG-R-0105 , at www.dec.org/pdf_docs/PNACR900.pdf (June 28, 2004).
 World Bank, World Development Indicators Online, 2004, at http://www.worldbank.org/data, and U.S. Agency for International Development, U.S. Overseas Loans and Grants and Assistance from International Organizations.