A unique aspect of MCC’s model of delivering U.S. Government assistance is its in-depth economic analysis of its poverty reduction grants, including Economic Rate of Return (ERR) analysis and Beneficiary Analysis. The use of these analyses and their availability to the general public are trademarks of MCC’s commitment to transparency and results-based aid.
The ERR Analysis used by MCC to inform investment decisions provides an estimate of the total increase in incomes attributable to a proposed MCC-funded activity relative to the total costs. Beneficiary Analysis is an extension of ERR analysis that seeks to describe, to the extent possible, precisely which segments of society will realize the increase in incomes.
Beneficiary Analysis is most commonly used to estimate the impact of projects on the poor, but it has broader applicability that allows a determination of impact on populations of particular interest, such as women, the aged, children, and regional or ethnic sub-populations.
More about the Definition of MCC beneficiaries
- MCC considers beneficiaries of projects to be those individuals who realize improved standards of living, primarily through higher incomes, as a result of economic gains generated by the MCC-funded project.
- Many individuals will participate in MCC-funded training, use services improved by MCC funding or otherwise enjoy outputs of MCC-funded projects, such as improved school environments, subsidized irrigation, and access to smoother, faster roads. In general, however, only a portion of these participants, users, and other individuals will realize higher incomes. For example, only some individuals who receive MCC-supported training will be more likely to obtain higher paying jobs than they would have otherwise. Again, MCC considers as beneficiaries those individuals who realize higher income due to the project.
- Consistent with standard poverty measurement practices, MCC considers the household the most practical unit of measurement, which reflects the underlying assumption that when one household member earns additional income, all household members benefit.
Advancing Beneficiary Calculations
MCC’s project assessments to date have incorporated poverty and beneficiary-related considerations. As part of its commitment to transparency and results-based assistance, MCC is currently producing updated guidance on Beneficiary Analysis to ensure that consistent practice is used to describe the beneficiaries of its projects. MCC makes every effort to publish its analysis on its website and meets with public groups and stakeholders who follow the issue of results-based aid and accountability in projects funded by the U.S. Government.