Estimate of the Millennium Challenge Corporation’s Urban and Shelter-Based Investments

Resource Library | Author Joseph Lombardo and Kerstin Tebbe | Date 2008

The world is becoming urban, and by most expert accounts the majority of the world’s population now lives in urban areas. This fact has profound implications for development programs designed to spur economic growth and reduce poverty. Some donors, such as the World Bank, have begun to explicitly consider urbanization and urban poverty issues, and to place particular emphasis on the key role of shelter-related programs in addressing urban poverty. The purpose of this study was to examine the degree to which the Millennium Challenge Corporation’s (MCC) investments address issues of urban poverty and the contribution of urbanization to economic growth. The study reviewed the 15 MCC compacts signed as of December 31, 2007; and attempted to categorize investments as urban or rural, and to compare the degree of urban investments to the level of urbanization in the MCC-funded country. The study found that 75 percent of MCC compact funds were projected to be rural investments and 25 percent were projected to be urban investments.