Validate critical assumptions underlying cost-benefit analyses (CBAs) and project logics during compact development. Many critical assumptions underlying the CBA and project logic ultimately did not hold, many of which could have been improved with more onsite ground-truthing and time for MCC and country partners to better understand the institutional context and constraints. For example, a number of discoveries which changed MCC and Millennium Challenge Account understanding of the problems to be addressed came late into implementation, limiting MCC’s ability to adjust the project design accordingly. Specifically, water quality concerns, low baseline rates of property damage due to flooding, and smaller household burdens of water collection were only discovered in the 2016 baseline survey, two years before Compact-closeout. Moreover, several assumptions were unrealistic. Given that these assumptions underpinned much of the project rationale, the project would have been better served to identify these issues much earlier. MCC does not have ongoing staff presence in partner countries when developing its Compacts, which can lead to disconnects in project design. MCC must emphasize in-person visits to gain the necessary technical knowledge and local information for adequate due diligence of proposed investments.
Lesson Learned