Help out the Millennium Challenge Corporation!

I received the following e-mail from the Millennium Challenge Corporation, a government entity designed to administer the Millennium Challenge Accounts proposed by President Bush during his first term. Here’s the key parts of the e-mail:

[W]e believe that you may be able to help us identify or develop a cross-national indicator or index that measures sustainable natural resource management policies. MCC currently uses a set of sixteen indicators developed by independent third parties to measure governments’ policies in three categories: ruling justly, investing in people and promoting economic freedom. Using these indicators, the MCC’s Board of Directors has already selected seventeen countries as eligible for assistance. MCC’s selection methodology and scores of candidate countries are available at www.mcc.gov. In its authorizing legislation, MCC is also asked to use “…objective and quantifiable indicators of a country’s demonstrated commitment to economic freedom, including a demonstrated commitment to … economic policies that promote … the sustainable management of natural resources.” Thus far, we have not been able to identify an indicator or index that meets MCC criteria in this area. As set out in our FY05 selection methodology and elsewhere, in selecting and evaluating any indicator, MCC favors indicators that:

· are developed by an independent third party; · utilize objective and high-quality data; · are analytically rigorous and publicly available; · have broad country coverage and are comparable across countries; · have a clear theoretical or empirical link to economic growth and poverty reduction; · are policy-linked, i.e. measure factors that governments can influence within a two to three year horizon; and · have broad consistency in results from year to year.

To identify an indicator, MCC announced plans today for a Natural Resources Working Group (NRWG) that will explore existing metrics and discuss new possibilities. On February 28, 2005, MCC Board Member Governor Christine Todd Whitman will chair a public session to explain the NRWG process, our criteria for proposal evaluation, and our timeline. She will also invite comments and proposals…. Throughout this period, we will also be accepting proposals from the academic community, public and private sector practitioners, and researchers at think-tanks and non-governmental organizations for indicators or indices that measure a country’s natural resource management policies…. Finally, we would like to underscore the policy significance of this endeavor. MCC, unlike many other donors, is willing and able to put up large sums of money in exchange for meaningful and verifiable policy reforms. By making the sustainable management of natural resources an MCC policy indicator in its own right, we believe that MCC can raise the profile of environmental issues in developing countries and provide a powerful financial incentive for improving natural resource management institutions. We also hope that this new legislative mandate will stimulate discussion and improve data quality. As many of you know, despite a large qualitative literature on natural resource management in developing countries, unreliable time-series environmental data have hindered the accumulation of knowledge in this field and led to tired and sterile policy discussions. Sadly, as a result, policy makers are many times not able to allocate scarce taxpayer dollars efficiently. Thus, we believe that the MCC’s NRWG represents a unique opportunity to pool our collective knowledge and inform U.S. government decision-making with systematic, objective, and detailed data.

I’m happy to hear useful suggestions on this front. The indicators that I’ve seen on this issue are mostly the macro-historical stuff coming from the world polity paradigm in sociology. I suspect that even the progenitors of these measures would acknowledge that they wouldn’t be of much use for the MCC.