Aid Selectivity and Anti-Corruption Policy: a Case Study of the Millenium Challenge Corporation

This paper argues that corruption control is the most fundamental component of the good governance agenda, since it subverts all the other values of good governance. It is both cause and effect of inefficient and unaccountable institutions. In developing countries, were resources are scarcer and need to be used in the most effective manner, corruption is especially harmful. In an effort to clarify how this move to a more selective, performance based approach can have an influence in the control of corruption of developing countries and therefore serve as model for other donors to follow, this paper will first discuss the concepts of good governance, development, corruption and review its empirical links to aid effectiveness. It will also show the benefits and limitations of measuring governance and corruption and argue for the development of more broad assessments methods.